Climate and nature report 2025 (climate and nature report 2025)

Climate and nature report 2025

Legal & General Group Plc

In line with recommendations by the Task Force on Climate-Related Financial Disclosures (TCFD)

Contents

Introduction

‌Addressing climate change and tackling nature loss have long been a part of our strategy. They are material financial issues, and are key to sustainable growth.

Introduction

1. Chief Executive Officer's statement

2. L&G at a glance

3. Sustainability overarching approach

4. Our climate and nature strategy

5. Our key targets and progress

6. Evolving our approach to nature

7. Climate and nature-related risks and opportunities

Execution strategy

11 Asset owner

13 Asset manager

15 Our operations

Engagement strategy

18 Asset owner

19 Asset manager

20 Our operations

Metrics and targets

32 Emissions breakdown

33 Commitments in detail

35 Asset owner

40 Our operations

Scenarios

43 Navigating scenario modelling at L&G

44 Climate pathways

45 Exploration of physical risks

46 Group portfolio scenario impacts

48 Resilience

Additional information

50 Greenhouse gas emission -Basis of Preparation

56 Entity-level disclosures

57 Deloitte assurance opinion

Reporting on our progress

Our Climate and nature report is a supplement to our Annual report and accounts. See our full 2025 reporting suite below, as well as our 2026 Climate and nature transition plan, which sets out our long-term approach to the climate transition (the transition).

Reporting on our progress

Governance and risk management

59 Cautionary statement

Annual report and accounts Social impact report Climate and nature transition plan Climate and nature glossary

22 Board oversight

23 Group Environment Committee

24 Risk management framework

25 Our approach to risk identification

26 Risk management approach

30 Engagement and remuneration

This report has been created in accordance with the 11 recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD). It is a supplement to our Annual report and accounts, which contain our material climate-related disclosures. This report gives us the space we need to discuss in further detail our approach to climate change and wider environmental issues.

Legal & General Group Plc Climate and nature report 2025 1

‌Sustainable growth for a simpler, better-connected L&G

For 190 years, L&G has been bold in its ambitions to help address society's biggest challenges -from supporting people in retirement to investing in the real economy. Our purpose, Investing for the long term. Our futures depend on it, guides our actions today as we confront the twin crises of climate change and nature loss. These are

long-term issues that require urgent commitment, and as a long-term business, we are determined to be part of the solution.

The world is experiencing unprecedented change. The past three years3 have been the warmest on record, and in 2025 renewable energy overtook4 coal as the leading global source of electricity.

While the science shows that limiting warming to 1.5°C remains technically possible, delayed global action has increased both uncertainty and the scale of transformation required across industries and financial systems.

Understanding the importance of protecting nature is also growing rapidly. Our colleagues joined global leaders at COP30 in Belém, on the edge of the Amazon, where discussions centred on elevating nature finance, improving adaptation measures and accelerating delivery against climate commitments. Our early adoption of the Task Force on Nature-related Financial Disclosures (TNFD) framework is shaping our solutions, such as our investment in Pudding Wood, a site that will generate high-quality carbon credits a restoring biodiversity in England.

Climate and nature risks are increasingly material for economies. We have a responsibility to understand these dynamics. Doing so is essential to manage risk and contribute meaningfully to solutions.

Our people continue to build the expertise needed to assess risks and capture opportunities. In 2025 we leveraged this capability through initiatives such as the L&G Nature and Social Outcomes strategy, facilitating high-impact emerging market debt, and the L&G Togo sustainable development loan, which showcases the power of strategic partnerships to mobilise private capital for positive outcomes.

Our purpose, Investing for the long term. Our futures depend on it, guides our actions today as we confront the twin crises of climate change and nature loss.

António Simões

Group CEO

In 2024 we set out our strategy for sustainable growth, sharper focus and enhanced returns.

A successful climate transition underpins all three. We continue to execute against this strategy, engaging constructively with companies and policymakers to move towards net zero.

We have already taken, and will continue to take, significant steps to mitigate climate risks, adapt to anticipated impacts and position our business for long-term success in a low-carbon economy.

As we enter 2026, we are increasingly aware of how global biodiversity loss impacts national security and economic stability. This reinforces our commitment to integrating climate and nature considerations into our growth partnerships and broader strategic decisions. Policymakers and organisations investing in adaptation and transition will shape the resilience of societies and economies in the years ahead.

As I look to the future, I'm passionate in my belief that the depth of our expertise and the dedication of our people must be steered towards meeting and mitigating the challenges of climate change and nature loss - through our investments, our engagement and our operations - we will continue to invest for the long term. Our futures depend on it.

António Simões

Group CEO

2

Chief Executive Officer's statement

190

Years of history

FTSE 100

£1.2tn

Assets under management

10,548

Employees

£1,756m

Adjusted Operating profit1

£108.3bn

Proprietary assets2

1. Adjusted operating profit measures the pre-tax result, excluding the impact of investment volatility, economic assumption changes caused by changes in market conditions or expectations and exceptional items.

2. We define proprietary assets as total investments to which shareholders are directly exposed, minus derivative assets, accounting loans and cash and cash equivalents.

3. 2025 continues series of world's three warmest years - Met Office

4. Renewables overtake coal as world's biggest source of electricity - BBC News

Legal & General Group Plc Climate and nature report 2025

L&G at a glance

Introduction

‌We aim to be leaders in retirement and protection solutions, and a leading global asset manager with public and private markets capabilities.

L&G's assets under management (AUM) split by Asset Manager and Asset Owner activities

ESG ratings and recognition

£4bn

Proprietary assets managed by external asset managers

£104bn

Proprietary assets

managed by our in-house Asset Management business

£1,089bn

1 Assets managed by Asset Management on behalf of our external clients

Discover more

Annual report and accounts

1. Asset Management's AUM also includes £280.0 billion of unit-linked assets, of which £113.9 billion relates to Workplace and Retail savings.

Legal & General Group Plc Climate and nature report 2025 3

Sustainability overarching approach

‌Our approach to Responsible Business stems from our purpose and is defined by our commercial objectives and the economic value we create

Our purpose

Investing for the long term. Our futures depend on it.

Commercial strategy

Sustainable Growth

Sharper Focus

Delivered through our three businesses

Enhanced Returns

Institutional Retirement Asset Management Retail

Sustainability strategy

Long-term financial wellbeing

Better communities in which to live

and work

Game-changing environmental solutions

Engaging customers and employees with our impact

Running our business in a responsible way

Material issues

We have assessed the most significant issues, risks and opportunities for the Group to tackle in its sustainability efforts.

These material issues are at the interface of our purpose, our commercial strategy and our sustainability approach.

For further information about our material issues, please see page 9 and our social impact report page 5

Our climate and nature strategy

Introduction

We continue to deliver against our transition ambitions, promoting a 1.5ºC Paris-aligned transition while investing for the long term.

‌Our purpose

Investing for the long term. Our futures depend on it.

Our execution strategy

Using climate and nature considerations to shape our investing, risk management and operations

Our engagement strategy

Engaging to support long-term value creation and a more resilient economy

Reducing the intensity of our financed emissions:

• Undertake responsible and climate aligned investing to decarbonise our proprietary assets.

  Investing in the transition where it creates long term value:

• Investing in technology, infrastructure solutions and transitioning companies.

• Investing in nature-based solutions.

More information in our 2026 climate and nature transition plan page 10

Adaptation and nature

Contributing to a net zero-aligned transition as an asset manager with £1.2 trillion of AUM.

• Work with industry to develop and enhance our collective approach to climate investing.

• Work with clients to achieve their net zero targets through solutions-led investment products.

  Decarbonising real estate equity

• Deploying our real estate net zero roadmap.

More information in our 2026 climate and nature transition plan page 16

Decarbonising our operations:

• Improve the energy efficiency of our occupied offices and real estate that we actively manage.

• Enhance the efficiency of new homes brought to the market.

• Manage business travel emissions.

• Engage with our employees.

  More information in our 2026 climate and nature transition plan page 18

  Working for outcomes to ensure that our business remains resilient:

  • Stay actively engaged with developments in policy, regulation, frameworks and industry best practice, both directly and via engagement with global associations.

  • Partner with our Asset manager investee engagement activities to encourage our

    investments to transition.

    More information in our 2026 climate and nature transition plan page 22

    Adaptation and nature

    Driving greater action to address financially material climate and nature risk in the real economy consistent with our fiduciary duty.

• Deepen engagements with companies and policymakers to address bottlenecks.

• Engage with underperforming transition companies to unlock potential value

• Expand the universe where companies are held to account through voting under the CIP.

  More information in our 2026 climate and nature transition plan page 23

  Decarbonising our operations:

• Engage with our

  key suppliers on their net zero strategies.

• Engage with occupiers, managing agents and facilities managers across real estate assets.

• Engage with leading industry bodies, to remain abreast of emerging best practices and standards.

  More information in our 2026 climate and nature transition plan page 25

  • Further embed nature into governance, investment, risk and procurement frameworks.

  • Build our understanding of, and strategic approach to, adaptation.

  • Deliver internal training on wider climate and nature-related issues throughout the group.

  • Deepen engagement with nature issues across all stakeholders.

  • Engage to a greater extent with adaptation-related issues across all stakeholders.

    Oversight and governance

    Legal & General Group Plc Climate and nature report 2025 5

    
    
    

    Our key targets and progress

    Here we highlight our progress over 2025.

    Metric	GHG emissions intensity of our investments	Net zero alignment of assets under management	Operational footprint (scope 1 and 2)
    Meaning	This is made up of our ownership share of the emissions related to the assets we invest in within the Group proprietary asset portfolio, as explained on pages 11 and 12. It includes equities, bonds and real estate, but not cash or cash equivalents, derivatives, accounting loans and any assets already covered in our operational footprint. It is measured per unit of investment.	We will work with clients and industry to develop and enhance our approach to climate investing, helping clients achieve their net zero targets through solutions-led investment products. In Private Markets, this also includes our real estate portfolio for which we have established a target to achieve net zero by 2050 (or sooner), supported by our net zero carbon roadmap.	This covers the operations we directly control, such as the energy from our occupied offices and from the management of assets within our Private Markets portfolio. See pages 15 and 16.

    ‌Targets • Net zero asset portfolio, in line with a 'Paris' objective by 2050.

    • By 2030, reduce our portfolio GHG emissions intensity by 50%.

    • More granular SBTs, as detailed on pages 36 and 37.

    • Net zero GHG emissions across all our AUM by 2050.

    • Net zero carbon for all of its real estate equity assets by 2050 or sooner.

    • 55% reduction in downstream leased real estate portfolio GHG emissions per square metre by 2030 from a 2019 base year.

• Net zero operational emissions by 2050.

• We will reduce our absolute scope 1 and 2 GHG emissions by 42% by 2030 from our 2021 baseline1 as validated by the SBTi.

• Further more detailed targets are on pages 33 and 34.

1. In line with SBTi guidance, our scope 1 & 2 target baseline is annually reviewed to reflect business and portfolio changes

2. Emission reductions have been supported by occupier data quality improvements, through the replacement of benchmark with actual data, For more information refer to our Real estate equity: Net-zero carbon roadmap

Evolving our approach to nature

Introduction

‌The global context

The natural environment is fundamental to the long-term health of our social, economic and financial systems. It encompasses vital aspects of all our lives, from the food we eat to the air we breathe. Preventing and reversing nature loss is also essential in attempts to mitigate and adapt to the impacts of climate change.

Global awareness of the urgent need to protect nature has intensified, as is reflected in the Kunming-Montreal Global Biodiversity Framework and its commitment to safeguard 30% of land and sea by 2030. The UK Government has

set legally binding targets to align with this framework, including halting species decline

Our approach

L&G supports global efforts to halt and reverse nature loss by 2030, and we are building on the progress we have made in embedding climate-related considerations across our business model into our approach to nature. As we deepen our understanding of the ways in which nature underpins our activities, we are able to identify our material impacts and dependencies.

To strengthen our approach, we have committed to being an early adopter of the TNFD, a framework that better enables us to integrate nature-related risks and opportunities into decision making while further improving our transparency.

Nature loss presents distinct challenges for our business, but we consider these issues through the same strategic lens as climate change.

We assess our impacts and dependencies as an asset owner, through our operations, and as an asset manager, recognising that climate and nature are fundamentally interconnected. We continue to advance work to quantify how nature-related factors influence our business,

both within our investment portfolio and across our operations. While this remains a complex and evolving area, we are committed to making meaningful progress and work with our industry to develop our understanding.

In 2025, we also published our Nature Framework, setting out why nature is considered a systemic

Metrics

As a supporter of the TNFD, we continue to align with its recommended metrics on a

best-endeavours basis. The metrics outlined on page 35 highlights the exposure of our proprietary investment portfolio to nature-related impacts and dependencies. While access to reliable data remains a significant challenge for further alignment with TNFD guidance, we

will continue to monitor improvements in external data capabilities and use them to build a more accurate understanding of our exposure to nature-related risks. We will maintain active

engagement with these topics and integrate insights into our risk assessment processes as they emerge.

and restoring wildlife-rich habitats. Momentum

continued this year at COP30 in Brazil, where

risk and how we are responding to it, particularly through our engagement programmes. The

1,303

accelerating action to protect against deforestation was a central theme. As with climate change, all businesses have a critical role to play in recognising nature-related risks and supporting opportunities that strengthen a resilient,

nature-positive economy.

Nature underpins our economy. Investing in its resilience supports the long-term prosperity of our shareholders, customers, clients and communities.

Wendy Walford, Group Head of Climate & Nature Risk

Framework is supported by detailed existing and developing policies on deforestation, the circular economy, natural capital management, and water-related matters.

Number of nature-specific engagements made through our Asset Management division in 2025

35- 47%

Proportion of proprietary assets exposed to highly nature-dependent sectors

As with climate risk, our primary exposure to nature-related risks lies in our £108.3 billion of proprietary assets, where we have full control over the investment strategy. Addressing nature risks within this portfolio is essential for protecting and creating long-term value. Our metrics given on page 35 align with TNFD guidance for financial institutions,

and we continue to develop the quantification of the risks, using this to inform us how our capital can be directed towards nature-positive outcomes.

Nature loss is a systemic risk that must be managed to protect value in

our £1.2 trillion of AUM over the long term. These are primarily the assets we manage on behalf of our clients. As an asset manager, we have made nature

a core pillar of our engagement with policymakers and investee companies. We have also developed nature-positive investment products that deliver strong commercial performance while supporting positive nature and social outcomes.

Our operations are our direct interface with nature, and we have reported our environmental performance metrics, such as on waste and water, for several years.

In 2025, we also explored how to optimise the environmental performance of some of the land we own to lessen the environmental impact of our business.

Our initial focus has been on an afforestation and habitat-creation initiative at Pudding Wood, a 155-hectare site in southern England (see page 10).

Legal & General Group Plc Climate and Nature Report 2025 7

Climate and nature-related risks and opportunities

‌In 2025 we began a further assessment of our sustainability impacts, risks and opportunities (IRO), building on the findings of our 2023 review.

The objective was to ensure that the most material topics for L&G continued to be addressed. The findings of this round of review will be used to shape a revised Group sustainability strategy, which is expected to be reviewed and approved by our Group Management Committee in 2026.

We continue to use the taxonomy of issues identified in 2023. It includes 201 sustainability topics grouped into 59 themes and 11 mega-themes. We take 'sustainability topics' to mean themes which originate outside the Group, can be classified as 'ESG concerns, and are interoperable across industries and sectors of the economy.

Assessment steps

Taxonomy definition

In considering their relevance to the Group,

Our results

The table below sets out in more detail what we consider to constitute each theme. See our Social impact report for more detail.

Related to social impact

Accessible and affordable housing

Financial inclusion

Infrastructure and real estate

Health and wellbeing

Corporate culture

Diversity and inclusion

Transparency of reporting

Related to social impact

Climate change mitigation

Biodiversity and ecosystem loss

we considered each topic's ability to affect cash flows, access to finance or cost of capital over the short, medium and long term; the extent to which a given topic is a systemic risk or presents

a reputational risk to the Group; and an evaluation of the Group's ability to impact its unfolding.

We have conducted our annual top-down review of the long-list against the conclusions drawn in 2023 and the Group's sustainability-related strategies. Although certain issues have increased and decreased in priority due to changes in our operating context, our overall approach to the most material issues, risks and opportunities remains appropriate: for example, we are

already reframing our climate and nature strategy to take greater account of the need for adaptation, and we are very aware of the need for our sustainability strategies to reflect the emerging risks and opportunities presented

by artificial intelligence.

Because our assessment and its implications for sustainability strategy remain subject to governance review, we have built our 2025 reporting around our previous IRO findings, responding to changes where appropriate.

Assessment of topic relevance and materiality to the Group

Assessment of the fitness of our strategic approach

Governance reviews

Discover more Social impact report

8

Introduction

Climate and nature-related opportunities and risks continued

‌While the risks from climate change and nature loss are increasingly clear, the transition to net zero, and the reallocation of capital to nature-positive outcomes, also creates opportunities. This page highlights material climate and nature-related opportunities and risks that our businesses have identified.

These are long-term assessments informed by our strategic priorities. They have changed slightly from previous years.

The impacts of these challenges on our businesses differ. This is detailed throughout this report. Impacts are also likely to shift over time, and we have used a heat map approach to illustrate when a specific opportunity or risk is likely to emerge most strongly. The impacts identified do not take account of management actions we will take.

Our opportunities are covered in more detail in the Strategy chapter, and risks in the Governance and risk management chapter.

Short, medium and long term

TCFD recommendation

Describe the climate-related risks and opportunities the organisation has identified over the short, medium and long term.

• Our short-term horizon looks at a three-year period.

• Our medium-term horizon looks forward up to 10 years.

• Our long-term horizon looks at the time horizon up to 2050.

Key

Institutional Retirement Asset Management Retail

High impact Medium impact Low impact

Opportunities Risks

Horizon term Business area(s) Business area(s) Horizon term Strategic pillar Potential opportunities

Directing our investments to support a low-carbon transition while investing

in corporate, infrastructure and real estate climate and nature-based solutions.

Attracting and retaining clients by supporting them to decarbonise their investment portfolios, for example through net zero-aligned investment products and the provision of data and analytical tools.

Managing funds that provide clients with access to financing opportunities in

transition technologies and infrastructure and nature-positive outcomes.

Enhanced returns from investing in homes and commercial properties by enabling them to operate with net zero carbon emissions and helping to protect and restore nature.

Increasing our market differentiation through investment in low-carbon real estate, including reduced embodied carbon.

Protecting our returns by developing real assets with high levels of climate resilience.

most impacted Short Med. Long Strategic pillar Potential opportunities

Investments in sectors or companies which are adversely exposed to a transitioning economy lose value or are downgraded, and investments prove ineffective resulting in loss.

Disruptive technology, including AI, impacting the value of investments.

Increased frequency and severity of extreme weather events or increased nature loss, impacting on the value of physical assets or the value of companies with high exposures to these risks.

Loss of market share if investment solutions are perceived as not meeting evolving client needs.

A breach of evolving legislative or regulatory requirements may expose us to litigation or regulatory sanction and damage our brand.

Reputational risk from not meeting our own commitments, or if activities across the Group are not aligned.

High delivery costs of low-carbon or nature-positive solutions for residential and commercial properties impacting viability.

High delivery costs due to changing climate and nature-related disruptions to our supply chain, leading to increased costs and material shortages.

Property values fall due to increased risk of extreme weather impacts, higher insurance costs or poor energy efficiency.

Not having the right skills for the future, or weakness in processes or systems, leads to customer detriment or reputational damage.

most impacted Short Med. Long

9

Execution strategy

‌Overview

Our execution strategy sets out the actions we are taking to support our business. It focuses on areas where we have more direct control to drive meaningful progress against our climate goals.

As a financial services group, these actions are dependent on external factors such as an enabling policy environment, availability of

assets that meet our investment needs, credible decarbonisation within the companies and sectors we invest in and technological advances.

We are executing L&G's Climate & Nature strategy, delivering real world progress, strengthening

nature- positive outcomes and increasing our climate resilience.

Carl Moxley

Group Climate Director

Key highlights

35%

portfolio GHG emissions intensity reduction

26%

reduction in scope 1 & 2 emissions from our 2021 baseline1

£4.4bn

Investment in transition finance

100%

of directly procured electricity from renewable sources

Pudding Wood

Building on our expertise in developing and managing real assets, we are exploring how we can bring the same approach to nature-based solutions. At the heart of this is Pudding Wood, a 155-hectare site in southern England, where we have designed a project to deliver high-integrity carbon credits while restoring local biodiversity. These credits will support our commitment to achieve net zero for group-wide business travel from 2030.

The site design includes planting 140,000 native trees and creating diverse new habitats, including broadleaved woodland, wildflower meadows and ponds, while enhancing existing ecosystems. We are targeting the establishment of new populations of local priority species such as the nightingale, great crested newt, hazel dormouse and Bechstein's bat.

During 2025, we worked with ecologists and arboriculture specialists

to produce the site design, gathered baseline environmental data, engaged the local community in helping to shape the social benefits, and initiated the first phase of planting.

The project's key milestones include the completion of our first planting season in April 2026, concluding fully in early 2027 following a second winter of planting, with carbon credits being available from the site around four years later.

The site is expected to deliver approximately 25,000 high-integrity carbon credits during its lifecycle - supporting efforts to tackle the twinned crises of climate change and nature loss while increasing public engagement with nature. Crucially, the project is providing us with insights into how investments in nature-based solutions could be scaled up in the UK.

Execution strategy

1. In line with SBTi guidance our scope 1 & 2 target baseline is annually reviewed to reflect business & portfolio changes.

The photograph on this page shows tree planting at our Pudding Wood site. We use plastic tree guards, using a minimum of 50% recycled material, to protect young saplings from wildlife during establishment. They are removed between years two to five, once the trees are able to support themselves, and are recycled at end of use.

Legal & General Group Plc Climate and Nature Report 2025 10

Execution strategy

Execution strategy

‌We have incorporated climate change and nature considerations into how we invest our £108.3 billion of proprietary assets1.

Our proprietary assets

Our proprietary assets1 are the £108.3 billion of assets that L&G own and where we control the investment strategy. Our proprietary assets contain both direct and traded securities across different asset classes.

TCFD recommendation

Describe the impact of climate-related risks and opportunities on the organisation's

Through reducing the intensity of our financed emissions

We are committed to a net zero asset portfolio, in line with a 'Paris' objective, by 2050, for

our £108.3 billion of proprietary assets. Our proprietary asset portfolio is managed under a decarbonisation strategy that combines transitioning to lower-carbon investments through new business flows and phasing out high-carbon legacy holdings. Engagement with investee companies is central to ensuring

2025 Performance progress

• We remain on track against our 2030 decarbonisation target for the GHG emissions intensity of our investments, achieving a 35% reduction2.

• We extended our investments in climate and

  2025 Highlights

• £4.4 billion invested in Transition Finance.

• £0.3 billion invested in Nature-based solutions.

• Continued progress to phasing out investments in coal and oil sands by 2030, with less than 1% portfolio exposure3 remaining.

  businesses, strategy and financial planning.

  alignment with Paris-aligned pathways, supported by exclusions where necessary. Success depends on investee decarbonisation, supportive government policy, and the availability of attractive transition assets.

  	Direct investments4 2025 £m	Traded securities5 2025 £m	Total 2025 £m	Total 2024 £m
  Equities	1,400	672	2,072	2,948
  Bonds3	27,067	60,678	87,745	87,172
  Derivative assets	-	41,625	41,625	49,195
  Property4	6,839	-	6,839	5,955
  Loans	194	1,070	1,264	2,714
  Financial investments	35,500	104,045	139,545	147,984
  Cash and cash equivalents	187	2,714	2,901	3,757
  Other assets	1,040	-	1,040	1,479
  Total investments	36,727	106,759	143,486	153,220
  Retained US portfolio5	2,780	4,108	6,888	-
  Total investments + Retained US portfolio	39,507	110,867	150,374
  Non-retained US portfolio			3,705
  Total proprietary assets1			108,289	97,554

  nature solutions, including debt conversions for nature and clean energy infrastructure.

  • We continue to evolve our understanding of our impacts and dependencies on nature, exploring our investment portfolio's exposure to deforestation, and highly nature-dependent sectors.

    Our strategy

    Our primary climate risk exposure lies in our proprietary assets1. We believe that addressing this systemic risk in our proprietary asset1 portfolio, is key to protecting value over the long term.

• Continued focus on delivering against our more granular SBTi-verified targets (see Metrics and Targets section for more detail).

Our investment approach aims to mitigate risks by reducing the intensity of our financed emissions and maximising our impact by investing in the transition.

Table 1: Total Group assets analysed by investment class

1. We define proprietary assets as total investments to which shareholders are directly exposed, minus derivative assets, accounting loans and cash and cash equivalents.

2. From a 2019 base year.

3. Investments with more than 5% revenue exposure to coal and oil sands.

4. Direct investments, which generally constitute an agreement with another party, represent an exposure to untraded and often less volatile asset classes. Direct investments also include physical assets, bilateral loans and private equity, but exclude hedge funds.

5. Traded securities are defined by exclusion. If an instrument is not a direct investment, then it is classed as a traded security.

6. Bonds include lifetime mortgage loans of £5,756 million (31 December 2024: £5,861 million).

7. Retained US portfolio includes the investment portfolio of the US PRT business that the Group will continue to be exposed to after completion of the sale.

Legal & General Group Plc Climate and Nature Report 2025 11

‌However, the global trajectory currently overshoots the 'Paris' objective, increasing the risk of unmet commitments, while data gaps and inconsistent methodologies continue

to challenge accurate disclosure. We remain ahead of our 2030 decarbonisation target trajectory and have made good progress to date on our overall ambition. In 2025 we have seen decarbonisation within our utility sector holdings, through a combination of trading activity alongside portfolio investee decarbonisation.

We expect short term fluctuations in our result year on year due to both market movements and the relative composition of our asset portfolio which can be both positive or negative. Over the last year, we have seen a 2% reduction in our overall progress arising from foreign exchange rate movements and increasing sovereign exposure, which currently has a higher emission intensity than our non-sovereign portfolio, offsetting our utility sector decarbonisation.

We expect these impacts to reverse in the medium term and remain comfortable that our 50% reduction by 2030 target is on track

Through investing in the transition where it creates long term value

We remain committed to directing our investments to support the transition where this aligns with our risk appetite and regulatory criteria, and we see a significant investment

opportunity in doing so. We invest across a range of asset classes, each with considered strategies to support the transition to net zero and to date, we have invested £4.4 billion in transition finance, including £1.7 billion in renewable energy,

£2.1 billion in green bonds and £0.6 billion in other solutions (such as technology, infrastructure and real estate), which supports the transition and helps build our resilience to climate risk.

We are committed to increasing the financing of climate solutions where it creates long-term shareholder and customer value, while also reporting progress on investments in nature-based solutions.

1. https://sciencebasedtargets.org/reports/sbti-trend-tracker-2025

   Direct investments, which total £39.5 billion, span private credit, real estate and infrastructure with climate and nature considerations integrated into decision-making processes, as described in our 2026 Transition Plan.

   Temperature Alignment target metrics

   We call out our dependencies in the text to the right and these are particularly important in relation to the underlying methodology

   supporting the SBTi temperature rating metrics (as detailed further in the Metrics and Targets section), which rely on investee companies adopting Science based targets. These metrics measure and provide a score for the implied warming potential of a company depending

   on the target ambition of the company.

   The methodology sets a default temperature (3.2 degrees) where there is no target, and this

   has a very significant impact on our overall results given the proportion of companies that have not yet set their own targets. Whilst there continues to be progress, with over 40% of global market capitalisation1 having science based targets, we do not have confidence that this target is achievable in the short term as it would rely

   on a very significant shift and adoption over 2026. We will continue to engage, but we are heavily reliant on the actions of others.

   Nevertheless, we believe that a longer term trajectory target and perspective remains important. As a result, we had identified these targets as "focus areas" last year and have been engaging with the release of the longer term SBTi Financial Institution Net Zero Standard in June 2025, as part of the associated expert advisory group, which has further considered "portfolio climate alignment" target requirements. We are also supporting wider industry developments on this topic. As these discussions and industry best practice evolves, we will review our "portfolio climate alignment" target approach over 2026 and will provide an update on this review within our 2026 Climate and Nature reporting.

   Nature and adaptation

   Image Source: The AfDB

   Togolese Republic supported by African Development Fund

   In 2025, L&G was co-mandated lead arranger on a sustainable development loan totalling

   €200 million to the Togolese Republic, benefitting from a Partial Credit Guarantee from the African Development Fund (ADF), the concessional lending arm of the African Development Bank (AfDB). This is the first time L&G have lent directly to an

   emerging market sovereign.

   The opportunity was identified to support sustainable development opportunities

   in Togo and is the first loan issued under Togo's sustainable finance framework.

   The use of proceeds includes projects related to climate adaption initiatives, biodiversity preservation programmes, sustainable agriculture development, access to clean

   and affordable energy and pollution control measures.

   Togo has limited access to long term, affordable climate financing and faces structural barriers in meeting its sustainable development goals. This financing supports critical environmental and social programmes aligned with national SDG targets, reinforcing strong governance signals about Togo's commitment to sustainable development.

   The transaction establishes a replicable

   model for insurance-backed sovereign financing in emerging markets, enabling access to long term, competitively priced capital for countries that traditionally face prohibitive borrowing costs.

   
   
   

   We have invested £0.3 billion in Nature-based solutions while we are building our understanding of the wider Group proprietary assets' exposure to nature-related risks. We started by focusing on risks that cross the climate and nature

   risk nexus (such as risks from deforestation), while also referring to the TNFD guidance for financial institutions.

   Over 2025, we continued to build our nature investment data capability, focusing on the metrics covering deforestation and sectors with material nature-related dependencies metrics.

   In relation to deforestation, 10% of our holdings, as at end 2025, are with c.400 companies who have been identified on data sources related to tracking potential deforestation risk exposures, suggesting possible risk exposure. To understand more, we continue to deepen our oversight and underwriting where we can to mitigate exposure identified while data provision matures, including continued industry engagement alongside Asset Management.

   Looking wider than deforestation, 35-47% of our holdings are currently exposed to a set of sectors considered to have material nature-related dependencies and impacts, as described in the TNFD financial sector guidance2. A range is provided, noting the data gaps and resultant uncertainties in mapping our exposures to the defined sectors.

   Dependencies

   Our transition will be dependent on investee entities having, and delivering on, their decarbonisation targets; as well as the delivery of government policy, and the availability of attractive assets for investing in the transition. The world is not currently on a pathway that will limit global warming to 1.5°C, which increases the risk of us not meeting our long-term commitments. The lack of reliable, accurate, verifiable, consistent climate and nature-related data continues to make accurate disclosures

   and assessments of both opportunities

2. https://tnfd.global/wp-content/uploads/2024/06/TNFD-Additional-guidance-for-financial-Institutions_v2.0.pdf?v=1728035523

   and risks challenging.

   Execution strategy

   Execution Strategy continued

   ‌Asset Management is committed supporting long term value creation by helping our clients manage the risks and seize the opportunities linked to the challenges of climate change and nature loss aligned with our clients' interests

   Through the products we offer

   Our investment philosophy and processes are focused on creating value for our clients over the long term. To this end, our responsible investing approach incorporates financially relevant sustainability characteristics into investment decisions, where consistent with the achievement of investment objectives, and works alongside our engagement efforts, targeting value creation to support real world outcomes.

   Since we set our net zero aligned AUM by 2050 ambition in 2021, we have worked towards our

   Developing products and solutions

   Within Asset Management, we have developed a range of tools to embed climate and nature considerations into our investment decisions and client solutions, in line with client needs.

   These include proprietary ESG assessments that inform our engagement with companies, as well as our voting and investment decisions.

   Key examples include the L&G ESG Score - used in the development of investment solutions; the Climate Impact Pledge - our flagship engagement programme (see Asset Management engagement section for more detail on page 19); and the Future

   2025 performance progress

   • We achieved 1st place in Global Canopy's Forest 500 annual assessment in the financial institution category for deforestation, reflecting the continued strength of our work in nature.

   • In 2025, we continued to see tangible improvements through our Climate Impact Pledge, with a higher proportion of companies assessed meeting our minimum expectations.

   • We achieved a 49% reduction in the carbon intensity of the scope 3 emissions associated with the energy use of our real estate equity occupiers, from a

   2019 base year

   2025 Highlights

   • We see increasing interest in responsible investment with £496 billion invested in responsible investment strategies, accounting for 42% of our total AUM

   • In 2025 we expanded our product range, with 32% of new products having sustainability considerations, of which 20% are aligned to net zero.

   • We launched the Nature and Social Outcome (NASO) strategy, which is committed to investing $235 million (£183 million) in emerging markets to advance nature conservation and sustainable development.

     interim threshold of managing 70% of eligible net zero aligned AUM by 2030 (excluding

     government securities and derivatives).This includes 100% of L&G's own listed investments, which are already managed to net zero aligned objectives.

     Responsible investing and net zero frameworks

     We are committed to embedding sustainability considerations across asset classes and investment strategies.

     We believe that incorporating financially material sustainability criteria, where relevant to our clients, can create long term value and drive positive change. Our integrated responsible investment framework outlines how we aim

     to drive value through aligning our strategies towards clear, consistent and demonstrable sustainability objectives. ensuring consistency with regulatory expectations. Alongside this, our net zero approach sets out standards for net zero aligned funds and portfolios, guiding product development to meet evolving client needs.

     World Protection List, which excludes companies

     that fail to meet globally accepted business practices on human rights, sustainability, or L&G's minimum requirements on the carbon transition.

     Throughout 2025, we continued extensive dialogue with clients and consultants on climate and nature to better understand their position and priorities. Over the past five years, the discussions have evolved from a focus on portfolio alignment alone to a broader recognition that higher-emitting 'brown' companies require capital, supported by deep engagement to transition successfully.

     Legal & General Group Plc Climate and Nature Report 2025 13

     
     
     

     ‌This is exemplified in our Climate Action strategy, which invests in companies that are 'climate laggards' and engages with them to drive real-world outcomes. We will continue to broaden the accessibility of this fund range in response

     to evolving client needs. In 2025, we built on our commercial momentum in Climate and Nature with the launch of new strategies.The NASO strategy1, launched in 2025, is committed to investing $235 million (£183 million) in emerging markets to advance nature conservation and sustainable development.

     The strategy leverages innovative, credit-enhanced financial structures and deploys capital through projects that aim to deliver strong commercial returns alongside measurable positive outcomes for people and the environment. We will continue to invest in sustainable financing opportunities in emerging markets, aiming to build on L&G's current total commitment of $1.2 billion (£860 million).

     The L&G NTR Clean Power (Europe) Fund, which reached final close in March 2025, supports climate change mitigation, through investment in clean power infrastructure assets across Europe. We are exploring further related strategies with this partnership to enable us to continue to support investments that can accelerate the transition to a low-carbon energy system.

     Outlook and dependencies

     IDB Amazonia Bond

     As part of the L&G Nature and Social Outcomes strategy, L&G participated in the world's first Amazonia Bond, issued by the Inter-American Development Bank (IDB), focused on protecting one of the planet's most vital ecosystems. The

     bond was issued under the IDB's new Sustainable Debt Framework and aligned with the Amazonia Bond Issuance Guidelines developed by IDB and the World Bank, with the proceeds financing projects that aim to help curb deforestation, conserve biodiversity, and strengthen local livelihoods and economic resilience across the Amazon region.

     We assess our approach towards our overall strategic target of total AUM net zero aligned by 2050 on a regular basis. We have made tangible progress towards this overall aim, through our actions and active engagement. Our progress towards meeting our interim target has been

     as expected to date but we foresee increasing challenges with the accelerated adoption of climate investment required over the next few years.

     Therefore, we will review how our interim plans and targets can best reflect achievement of our net zero 2050 objective, taking into account evolving client and industry approaches. Our progress is dependent on a supportive policy environment, increased data quality and availability, and the willingness of investee companies to integrate financially material climate and nature considerations into their strategies.

     Execution strategy

     Execution Strategy continued

     ‌We are changing the way we operate to decarbonise our business.

     These are emissions over which we have more direct control and therefore have the opportunity and a strong commitment to effectively manage and reduce. Our operational footprint also includes the emissions associated with our procurement of £978 million of goods and services from over 2,000 suppliers.

     Our primary aim is to improve the energy efficiency of our occupied offices and the real estate that we actively manage, focusing predominantly on removing gas from buildings we own and control, and by improving the

     Through the management of the real estate we own and manage

     We hold an extensive real estate portfolio, across commercial and residential property, through managed funds and operational assets in our housing and urban regeneration businesses.

     The emissions associated with managing these assets, produced from the fuels and electricity that we purchase and control as a landlord, are the largest contributor (c17.5k tCO2e) to our operational footprint.

     2025 performance progress

     • We remain on track to deliver our SBTi validated scope 1 and 2 emissions reduction target of 42% reduction in location based emissions by 2030 from a 2021 baseline1. To date, we have achieved a 26% reduction in our scope 1 & 2 emissions from our 2021 baseline1.

Our operational strategy

Our objective is simple, to reduce emissions from our operations in line with our SBTi validated target and our wider net zero and nature ambitions. In doing so, not only will we actively drive emissions reductions, but we will also future proof our businesses by minimising our exposure to climate and nature risks and strengthening our overall performance.

2025 highlights

• We have achieved several targets during 2025, namely;

  • 100% of directly procured electricity was from a renewable source.

  • we diverted 100% of waste from landfill.

  • we exceeded our target to reduce core occupied office waste.

    Our operations, whilst smaller in terms of annual carbon emissions than those from our investments, are a key component of our climate transition, impacting both our own carbon footprint and our pathway to achieving net zero.

    Our operational emissions are created by the

    £20 billion of assets we own within our real estate equity and our housing and urban regeneration businesses, alongside the activities of our 10,548 employees working predominantly in the UK but with a wider global presence.

    energy efficiency of our operations.

    To enable us to track our progress and to ensure we align with the latest scientific thinking, we have set a SBT to reduce our scope 1 & 2 emission by 42% by 2030 from a 2021 baseline1. This target is set on location-based emissions, and means that whilst we procure all our electricity from renewable sources, our focus

    is on the delivery of energy efficiencies across our business rather than simply reviewing energy procurement options.

    Through the management of the offices we occupy

    Whilst our core occupied offices only represents 8% of our scope 1 & 2 emissions, it is an area where we have direct control. We have therefore, set a target specifically for our core occupied offices, 'from 2030, our occupied offices2 scope 1 and 2 will operate with net zero emissions'.

    This target informs our office location strategy, shaping how we come together to work and collaborate in our offices. A key milestone towards achieving this target is the planned move to a new Head Office in 2027, which modelling indicates will be twice as efficient as our current head office.

    For our real estate portfolios we have committed to achieve net zero carbon by 2050 (or sooner), and that from 2030, all new homes we deliver will be enabled to operate at net zero

    carbon emissions.

    The primary objective of these commitments is to future-proof our portfolios, as we believe this will protect our own and third-party capital by mitigating risks associated with climate change, and add value to retained assets. The portfolio is also captured by our commitment to achieve

    55% reduction in carbon intensity across scope 3 emissions associated with occupier energy use by 2030.

    Our sustainability data strategy has been strengthened through improved accuracy and robustness of occupier data. We've achieved this by;

• Installing automated meter readers across our assets to collect occupier consumption data

• Embedding digital occupier engagement platform, Vizta, across 512 assets.

• Collecting supplier-specific energy consumption data, minimising the need to collect directly from occupiers.

This significantly increased data coverage, in particular for our housing businesses.

1. In line with SBTi guidance our scope 1 & 2 target baseline is annually reviewed to reflect business & portfolio changes.

2. Applies to offices L&G employees occupy where L&G have direct operational control, as defined by the Global Real Estate strategy.

   Legal & General Group Plc Climate and Nature Report 2025 15

   
   
   

   ‌Our Integrated Energy Solutions (IES) framework also supports progress towards net zero by accelerating the deployment of technologies such as on-site renewable energy generation, electric vehicle (EV) charging, and the potential for microgrid and battery storage projects. This strategic and holistic approach has supported the installation of photo-voltaic panels on 63 assets, EV chargers on 123 assets, with a pipeline of 35 additional projects currently in development.

   Given substantial interactions between assets and nature throughout the real estate value chain, we consider biodiversity an important aspect of responsible property management. We are therefore taking the following actions;

   • Aligning all new developments with Biodiversity Net Gain (BNG) planning requirements supported by internal guidance to facilitate regulatory implementation.

   • Across existing assets, the Industrial Property Investment Fund (IPIF) partnered with Biora to develop a biodiversity strategy. Using satellite technology and AI, initial baselining was conducted for over 40 sites, providing estimates of current biodiversity and identifying improvement opportunities. This analysis will support the Fund in determining the ecological and commercial considerations associated with delivering BNG.

     Working with specialists XDI and Marsh we've conducted granular physical climate risk analysis across all real estate portfolios and have continued to evolve our approach to managing associated risks. More information is available in the Scenarios section.

     Dependencies

     Whilst the success of our transition to net zero will ultimately be defined by the decisions we make, external dependencies also have a role to play in our transition. For example, we are reliant on electricity grids decarbonising at their

     committed pace to enable us to meet our targets.

     Net zero standards continue to evolve, and we may need to adapt our strategy to align with industry best practices and emerging technological advancements.

     Our actions to manage our operational footprint to 2030 may not lead to a linear annual reduction, as we are in a period of business growth. This means that we may see an increase in our absolute carbon footprint before the impact of our carbon reduction and energy efficiency actions result in a more rapid reduction in carbon to achieve our 2030 targets. We plan to scale up these initiatives to 2030, as well as seeking new innovative solutions to support our operations.

     We have, and will continue to, prioritise emissions reductions; however, we recognise that to achieve net zero status, we will require high quality carbon offsets to address residual emissions in the future.

     Given the ongoing challenges with the voluntary carbon offsetting market, we are creating our own nature-based solutions project and nature partnerships to generate robust nature-based carbon credits to meet our future net zero requirements.

     One Piccadilly Gardens

     
     
     

     Across our real estate portfolio, we are implementing measures to remove gas in line with our aim of phasing out all landlord gas by 2030 for landlord-controlled areas. This includes One Piccadilly Gardens, Manchester in the Managed Property Fund, where we fully electrified the building by removing an obsolete gas boiler and replacing it with all-electric technology.

     Removing gas and installing a combination of the air source and water source heat pumps enabled us to deliver significant carbon savings and other sustainability-related improvements, following completion in 2025. This includes:

   • Projected savings of 110 tCO2e annually.

   • Improving the building EPC rating from D to B, whilst maintaining a fully operational building for the existing tenants.

   • Increasing the Managed Property Fund's utilisation of renewable energy sources.

Although the cost was higher for the heat pump than for a like-for-like replacement of the gas boiler, the forecasted carbon savings and appeal in the market for all electric buildings enabled the Managed Property Fund to hit its annual energy reduction target from this project.

Engagement Strategy

Engagement strategy

‌Overview

Our engagement strategy outlines how we advocate for and promote positive climate and nature outcomes. It seeks to work with partners who we are dependent on if we want to see real world impacts from our climate ambitions. It recognises that the changes needed to decarbonise require system wide changes and is targeted to safeguard and drive long-term value for our clients, customers and shareholders.

While outcomes cannot be guaranteed, strategic engagement enables us to amplify our impact, help shape enabling environments, and support the systemic changes required to meet long-term climate and biodiversity goals.

The financial implications of climate change and nature degradation can be mitigated by genuine transition and action in the real economy. Our engagements with companies, policymakers and other key stakeholders are focused not just on disclosures, but on the actions needed to address obstacles to change.

Amelia Tan Head of Responsible Investment and Stewardship, Asset Management

Key highlights

56%

CIP covers total corporate securities by value that we invest in on behalf of our clients

49%1

reduction of carbon intensity of occupier energy use across real estate equity assets

76%2

of suppliers by spend have a science-based target.

80%

Carbon emissions attributable to AUM covered by the Climate Impact Pledge

Fortum

Challenge

In 2022, the Nordic energy company Fortum committed to become carbon-neutral by 2050, and although the company had produced disclosures related to its plan to achieve this, we believed that it needed to go further in developing a resilient strategy that would support sustainable value creation. As a result, we co-led investor engagement with Fortum within the Climate Action 100+ initiative (CA100+).

Impact

In 2023, after a series of collaborative engagements the company expanded its climate change ambitions. Although undeniably ambitious, we continued engagement with Fortum to understand how it would implement its plans.

In 2025, the SBTi approved Fortum's 1.5°C-aligned science-based emission reduction targets. The company also disclosed its transition plan, which included detail on how it would meet its emissions reduction targets. Furthermore, in 2025 the company published its most recent Climate Lobbying Review, taking our feedback into consideration.

We recognise Fortum's progress on its transition approach and we have publicly supported their meaningful improvement. As a result, in 2025 we stepped back from our co-lead position within CA100+, and we have focused our engagement efforts on other companies to bridge the gap between their plans and the benchmarks we hold them to.

1. From a 2019 baseline.

2. We define a target as science based if it is aligned to SBTi criteria i.e. is a mid term reduction target with enough ambition to align with the global net zero trajectory.

Legal & General Group Plc Climate and Nature Report 2025 17

Engagement strategy

Engagement strategy continued

‌As a Group (including Asset Owner activities) we engage mainly to keep abreast of developments in policy, regulation, frameworks and industry best practice, inputting our expertise and knowledge to help shape these so there is certainty and a supportive enabling framework for the sectors in which we operate..

We also advocate for more consistent disclosures to ensure the risks from climate and nature are clearly shown and are comparable as this ensures more robust investment decision making.

Working for outcomes to ensure our business remains resilient:

Climate change and nature loss present interconnected and material risks to the financial system which can only be fully addressed via collective action. We believe that constructive engagement with companies, policymakers and all key stakeholders is the best way to catalyse this collective action and ensure continued progress towards net zero. This in turn helps to ensure a more supportive policy and regulatory framework and assists investees and suppliers to implement changes in their own organisations thus advancing credible, transparent and effective climate and nature action.

2025 Highlights

• We engaged widely across our stakeholder groups on climate and nature topics.

• Recent engagement examples include regular dialogue with the UK Government, active participation at COP30 and London Climate Action Week (LCAW) and responding to regulatory and policy driven consultations from the PRA and Department for Energy Security and Net Zero (DESNZ) respectively.

• Ongoing engagement with the NZAOA and SBTi in relation to financial sector decarbonisation.

  Outlook and dependencies

  As an Asset Owner - we value active engagement across our whole portfolio, executing this through our Asset Management approach to encourage our investments to transition, encourage more consistent disclosure and ensure we are protecting the value of our assets.

  Our portfolio emissions directly relate to the carbon footprint of our investee companies and counterparties. An important aspect of our decarbonisation strategy is through active engagement across the economic landscape,

  and specifically investee companies, to support sector and economy-wide decarbonisation.

  Alongside close monitoring of the political and regulatory landscape, we continue to engage with policymakers, regulators and investee companies in support of climate action. While there are challenges in measuring the impact of our engagement, our strategy is based on active engagement with consequences. This is pursued by our Asset Management division on the group's behalf, with climate and nature identified as a key theme within our Investment Stewardship activities and summarised in our annually updated CIP programme and Nature Framework.

  More information on our engagement approach is given in the Asset Manager activities in the following page.

  We also engage with sovereigns, particularly in relation to policy and regulation considerations, to create the most effective investment environment for scaling long-term investment into the transition.

  Increased dialogue with borrowers pre- and post-investment is being used to improve disclosure and drive more positive outcomes across the portfolio. This includes working with borrowers to incorporate ESG into deal structures, such as the development of sustainability-linked loan structures and the incorporation of ESG reporting covenants. Sustainability-linked loan structures incentivise a borrower to achieve specific sustainability-related targets and have been

  used across several sectors, including to support housing associations with their net zero transition.

  We review our engagement strategy across the Group at least annually, to ensure it is still informed by science and aligned with our key priorities and risk appetite.

  Key 2025 engagements include:

• Clients - signatory to the Sustainability Principles Charter for the Bulk Annuity Process, including contributing to the creation of the Bulk Annuity Sustainability Survey (BASS)1

• SBTi - Financial Institution Net Zero Standard Expert Advisory Group and Corporate Net Zero Standard v2 draft consultation response

• NZAOA - Policy Track Co-Lead, alongside continual engagement with Monitoring, Reporting and Verification (MRV) and Financing the Transition Work tracks

• COP30 - In support of NZAOA policy objectives

• Department for Energy Security and Net Zero (DESNZ) - Consultation response on Transition Plan requirements

• PRA - Consultation response on CP10/25

• Climate Financial Risk Forum (CFRF) - Financial Resilience Working Group, providing case study input into "Quantitative Climate Scenario Analysis in Financial Decisions"2 publication.

• World Economic Forum (WEF) - Contributed to the "Nature Positive: Corporate Assessment Guide for Financial Institutions"3 publication

• Energy Transition Commission (ETC) Commissioners - Four commissioned reports and numerous other briefing notes published in 2025

• Aldersgate Group - Contributed to a number of responses and consultations.

• In addition to the above, we had an active presence at industry events throughout the year, including at London Climate Action Week (LCAW), where we participated in talks highlighting the growing activities in relation to adaptation and nature, as highlighted in the Execution strategy sections.

  1. https://www.accountingforsustainability.org/en/about-us/our-networks/asset-owners-network/bulk-annuity-sustainability-principles-charter.html

  2. https://www.fca.org.uk/publication/corporate/quantitative-climate-scenario-analysis-financial-decisions-case-studies.pdf

  3. https://reports.weforum.org/docs/WEF_Nature_Positive_Corporate_Assessment_Guide_for_Financial_Institutions_2025.pdf

     Legal & General Group Plc Climate and Nature Report 2025 18

     
     
     

     Engagement strategy

     Engagement strategy continued

     ‌We have been committed to active engagement to represent investor rights since L&G's Asset Management business was established in 1970, and our dedicated Investment Stewardship team was formed in 2000.

     Our 'universal ownership' approach to investment stewardship reflects our belief in using corporate engagement and policy dialogue to drive long-term value creation and shape the future by encouraging more sustainable, long-term practices from the companies and assets in which we invest..

     Through our engagement

     Climate Impact Pledge (CIP)

     As a universal owner on behalf of our clients, we seek to address systemic risks that are financially material. We believe climate change is a financially material issue for our clients' portfolios and that recognising risks and opportunities in scaling solutions for a low-carbon transition is key to long-term value creation. Our Climate Impact Pledge (CIP)1 is a two-fold engagement programme that promotes best practice on climate and nature across 20 climate-critical, high-emitting sectors.

     We also maintain active dialogue with our clients, using each engagement as an

     opportunity to confirm our climate and nature goals are aligned with client expectations.

     2025 Highlights

• We conducted 4,130 engagements on financially material environmental issues in 2025, including climate change, deforestation and climate mitigation.

• L&G contributed to the development of the Practice Standards for Debt Conversion Projects for Nature, Resilience and People as members of the Advisory Group.

The quantitative stream assesses over 5,000 companies, and the qualitative stream focuses on direct engagements with 'dial-movers' in climate critical sectors. It covers 56% of the corporate securities we manage and 80% of associated emissions as at

31 December 2025.

In 2025, we continued to see tangible improvements through CIP, with a 46% reduction in companies identified for votes against in our quantitative stream, and a 24% reduction in companies identified for votes against driven by 'dial-mover' engagements versus 2024, reflecting improved company alignment on climate and nature expectations.

One company was reinstated following progress, while escalation remained in place where standards were not met2. Further detail is available in our 2026 Climate and nature transition plan.

Our climate collaborations include3:

• Better Buildings Partnership

• Climate Action 100+

• Finance for Biodiversity Pledge

• Glasgow Financial Alliance for Net Zero

• Institutional Investors Group on Climate Change

• Nature Action 100

• Net Zero Asset Managers initiative

• Principles for Responsible Investment (PRI)

• Science Based Targets initiative

• Sustainable Markets Initiative

• UK Green Building Council.

Engagement on nature

In 2025, we continued to increase our focus on nature through targeted engagement and achieved 1st place in Global Canopy's Forest 500 annual assessment in the financial institution category for deforestation. Our Deforestation Progress report summarises the progress we have made in achieving our deforestation milestones, in line with the Finance Sector Deforestation Action commitment.

Engagement in Private Markets

Within Private Markets4, we tailor engagement to each asset class to focus where we can have an impact. In real estate, this means working with occupiers, and facilities and property managers to support our sustainability initiatives (see page 20).

In private credit, we engage with borrowers to assess ESG risks and identify opportunities for positive outcomes. This includes ESG assessment at pre-investment, incorporating ESG considerations into transaction structures such as sustainability-linked or use-of-proceeds loans, and ongoing post-investment engagement to monitor ESG risks and KPIs.

Collaborations and policy engagement

In 2025, we continued to demonstrate thought leadership and market engagement, maintaining a strong external presence through public convening, industry initiatives and policy engagement, including participation in the annual PRI conference, and collaboration with peers and asset

owners on climate and nature finance issues. L&G also contributed to the development of the Practice Standards for Debt Conversion Projects for Nature, Resilience and People

as members of the Advisory Group. This follows L&G's commitments to multiple debt conversions in developing countries since 2021 across Ecuador, Belize, Gabon and Cote d'Ivoire.

Dependencies

Progress in achieving climate and nature goals is dependent on the willingness of companies to embed sustainability into core strategies, treating it as fundamental to

long-term success. Progress will also rely on strong policy frameworks that drive changes needed, paired with reliable data and transparent reporting, critical for tracking progress and for company accountability.

1. am.landg.com/en-fi/institutional/responsible-investing/climate-impact-pledge/

2. Companies are divested from selected funds with £236 billion in assets in total (as at 31 December 2025), including funds in the Future World Fund range, Asset Management's ESG Fund ranges, and the established standard default investment options in L&G Workplace Pensions and the L&G Mastertrust. Companies are divested up to a pre-specified tracking-error limit. If the tracking-error limit is reached, holdings are reduced rather than fully divested. Asset Management's total AUM was £1,197 billion as at 31 December 2025.

3. For our climate collaborations, we are at all times entirely responsible for our investment and voting decisions, and always act completely independently when determining our own strategies and practices, which we do solely for the benefit of our clients.

4. L&G's private markets platform manages private assets across real estate, infrastructure and private credit across a range of solutions for pension schemes and institutional clients. As a leading investor and owner-operator in private markets, L&G looks to meet the needs of our stakeholders by fostering long-term relationships and delivering positive outcomes.

   Legal & General Group Plc Climate and Nature Report 2025 19

   
   
   

   Engagement strategy

   Engagement strategy continued

   ‌Our ability to achieve our operational near-term targets and overall net zero ambition is dependent on how we engage with a range of stakeholders, from employees, building occupiers, building managers and supply chain partners.

   Details on how we engage with key partners and employees to deliver the operational elements of our strategy are given below.

   • 2025 highlights

     • 76% of suppliers, by spend with a science-based carbon reduction target1

     • Our award-winning Symphony Model, a smart building & optimisation strategy.

     • Alongside our Carbon Disclosure Project (CDP) A list rating for Climate & Supply chain we also completed the Forest and Water questionnaires for the first time in 2025, achieving B in both, strengthening our external engagement on key nature topics.

       Real Estate Assets

       Across our real estate assets we work with our occupiers to improve data coverage through measures including sub-metering, collaboration on net-zero initiatives, and strengthened net-zero clauses in leases, supported by our digital occupier platform, Vizta. Our engagement also includes working closely with our facilities and property managers through annual targets, quarterly engagements and performance monitoring, ensuring alignment between operational teams and strategic

       sustainability objectives.

       Our award-winning Symphony Model, a smart buildings and optimisation strategy, encapsulates this coordinated approach, improving occupier experience and air quality, reducing maintenance costs and generating energy savings.

       Supply chain

       The procurement of £978 million of goods and services, from over 2,000 suppliers, has associated impacts on climate and nature.

       During 2025, to assist our supply chain partners to take steps to meet our target, we commenced a supplier outreach programme, which we will deploy further over the coming years, including holding our first Power in Partnership Supplier Sustainability Summit in early 2026.

       This is a targeted programme, focusing on engaging with our key suppliers on net zero and wider environmental and nature topics, to help encourage action and to share best practice and where appropriate resources and guidance. With the ultimate aim of influencing our supply chain partners to take action to positively reduce the emissions from our supply chain.

       External bodies

       We also engage with a range of external experts and industry bodies which help us stay abreast of emerging best practice and standards. As an example, we are contributing to the UK Net Zero Carbon Building Standard, which is under development and aims to establish a unified methodology for defining and verifying a net zero carbon building in the UK. Our involvement has

       Our Employees

       Our employees are critical to the success of our strategy, we therefore need to ensure they are equipped with the necessary knowledge and tools. To meet this need we deliver training

       on nature and climate at all levels;

   • At board level we focus on raising awareness around climate scenario analysis to ensure our boards and senior leaders understand climate-related risks and opportunities under different future pathways and how inputs to these models impact the credibility of outputs.

   • We have an ESG training academy for our employees, to increase visibility of key climate and nature topics and show how they interact with key L&G roles.

   • We have dedicated climate and nature pages on our internal hub (intranet) which includes information on our targets and performance, as well as information on how employees can make sustainable choices.

   • During 2025 we initiated a Climate & Nature Symposium, drawing together expertise from across our business. The symposium provides a platform for internal experts to connect and share expertise on core and emerging climate and nature related topics across the Group.

   • At Pudding Wood, our woodland creation project near Gatwick, we have been engaging with the community and other local stakeholders, including wildlife organisations and Gatwick Airport, to ensure open dialogue and to inform them of our progress.

We are strengthening our processes, including a new third-party risk management tool,

to enable us to better monitor supply chain partners and to ensure that we align our core procurement decisions with our net zero and nature ambitions and to work with aligned partners in our value chain.

We engage with our key suppliers to encourage their decarbonisation which in turn assists our decarbonisation pathway. Our suppliers are the experts in their fields and we aim to work in collaboration with them to build efficient carbon reduction innovations into our supply chain.

We need our supply chains to reduce their carbon emissions at pace to meet our net zero ambitions. We have a science-based target which focuses on engagement with our key suppliers. Our target is, 'by end of 2026, 80% of our suppliers, by spend, will set a science-based carbon reduction target1.'

been through working groups and pilot studies conducted on eight assets in 2025, which have informed our teams and helped to advance the standard's objectives.

1. We define a target as science based if it is aligned to SBTi criteria i.e. is a mid term reduction target with enough ambition to align with the global net zero trajectory.

Legal & General Group Plc Climate and Nature Report 2025 20

Governance and risk management

Governance and risk management

‌Overview

Environmental management is key to our success, as we are investing for the long term. Accountability is shared across the business and is led by the Group Board, which is supported by the Group Environment Committee (GEC), chaired by our Group Climate Director. Our revised climate governance has been fully embedded to ensure

We continue to evolve our governance and processes to ensure alignment with our business, as well as the latest science. We have refreshed our Climate transition plan in 2026, incorporating nature for the first time, as well as our learnings over the last 3 years. This update sets out our refined approach to navigating a rapidly changing environment.

we continue to meet evolving environmental

demands within our new organisational structure. The risks from climate change and nature loss

continue to be integrated into our risk management framework.

The impacts of both climate change and nature loss are unpredictable, and the pace of global progress towards net zero continues to lag.

Delivering on our strategic climate and nature ambitions in a changing environment needs

to be underpinned by careful risk management. Continuous monitoring is therefore essential

Responsibility for our climate and

nature strategy sits with the Group Board and Group Management Committee and we recognise that managing climate and nature risks and seizing the related opportunities are fundamental to long- term value.

given the speed and complexity of changes

in the environment, policy, technology,

available data and the market.

Nilufer Kheraj OBE

Non-Executive Director, with a focus on climate

Legal & General Group Plc Climate and Nature Report 2025 21

Board oversight

Governance and risk management

‌The Group Board ('the Board') is ultimately accountable for the long-term stewardship of the Group. Responding to climate change and addressing nature loss, and the opportunities and risks associated with these issues, are of key significance to the Board.

The Board has collective responsibility for the oversight of environmental matters, with Nilufer Kheraj, OBE, a Non-Executive Director on the Board, having a responsibility to give specific focus to climate change and nature loss in her role. This ensures climate and nature-related risks and opportunities across the Group are raised

on all relevant topics discussed by the Board.

Throughout the year, the Group Chief Executive Officer's (CEO), Chief Financial Officer's (CFO) and Chief Risk Officer's (CRO) Reports to the Board highlighted and discussed climate change, particularly in relation to the Group's risk appetite and climate as an emerging risk and the Group's continued resilience and assessment of preparedness for different climate outcomes.

The Board was kept updated on the Group's projected performance against the key climate commitments set out in the forward-looking Group strategy. During 2025 the Board also considered climate and nature investment

Alongside regular updates on the risks associated with climate change and nature loss, the GRC receives regular climate-specific management information. In 2025, the GRC specifically considered: the Group's climate risk management approach and how we will continue to evolve this to ensure it remains reflective of the underlying risks as well as how we are approaching our management of broader nature-related risks; the increased regulatory expectations from the PRA, and developments on Own risk and solvency assessment (ORSA) scenarios focussing on potential climate-related financial impacts across the business .

Our Group Climate Director holds responsibility for coordinating the Group's response to climate change and incorporating nature-related opportunities and risks. The role has the senior manager responsibility of ensuring an appropriate strategy is in place to understand, identify, measure, monitor, control and report

the opportunities and risks from climate change in line with the risk strategy and risk appetite parameters set by the Board. The Group Climate Director also supports management in the development of both strategic opportunities, and the appropriate processes to monitor

and report exposures to the risks arising from

Our governance framework

Legal & General Group Plc Board

Group Risk Committee (GRC)

Group Management Committee (GMC)

Executive Risk Committee (ERC)

Group Environment Committee (GEC)

Investment Committee

opportunities and stewardship.

Throughout the year, executives and senior leaders received updates on the progress of our new head office at 10 Coleman Street, which we will begin occupying in 2027. These updates covered redevelopments and design developments, with a focus on sustainability and high design standards that support the Group's sustainable growth agenda and net-zero commitment. Further detail is provided in page 49 of our Annual report. The Board was also updated on the progress of our pilot land development project for nature-based solutions.

The Group Risk Committee (GRC) oversees the risks associated with climate change and interrelated nature loss, to ensure exposures are controlled in line with the Group's risk appetite.

climate change.

The Board, through the GRC, Executive Risk Committee (ERC) and Group Management Committee (GMC), has delegated oversight of the management of environmental risks to the GEC.

TCFD recommendations

Describe the Board's oversight of climate-related risks and opportunities.

Describe management's role in assessing and managing climate-related risks

and opportunities.

Environment Risk Subcommittee

Group Risk Financial Risk Committee

Group Nonfinancial Risk Committee

Key

Board, GMC, GRC, and ERC

Environment Reporting Subcommittee

Climate Committees

Environment Operations Subcommittee

Divisional Risk Committees

Other committees/teams that consider climate risk

Risk Committees that consider climate risk

This ensures that management actions are also aligned.

Reporting line Reporting of specific issues

Legal & General Group Plc Climate and Nature Report 2025 22

Group Environment Committee

‌The GEC met five times in 2025 in accordance with its annual plan. The GEC is chaired by the Group Climate Director with membership including: the Group CFO, Group CRO, Institutional Retirement CEO, Retail CEO and Asset Management Chief Investment Officer (CIO). The level of seniority in its membership helps ensure that there is a single forum to provide oversight on our response to environmental issues, ensures consistency, encourages debate and demonstrates the importance we place on our response to these issues.

The Group Climate Director has responsibility for oversight of climate and nature risk identification and management for the Group. The divisional CEOs ensure climate and nature risks are embedded within their respective divisions.

They are the ultimate owners of the

risks, responsible for identifying, managing and monitoring climate and nature-related

risks and opportunities within the risk appetites agreed at the GEC.

To ensure a consistent group-wide approach and to support how we are implementing our ambitious strategy, the GEC has clearly

defined relationships with other Group oversight committees. These interactions are designed

to ensure that management of the risks and opportunities arising from climate and nature are integrated across the Group's governance system and embedded into the existing risk management framework.

The role of the GEC

The GEC is responsible for providing strategic direction of the Group's environmental response, including to climate and nature, with reference to the Group's broader strategy. This includes:

• setting the Group strategy for managing environmental impact, including setting targets, monitoring them and reporting on performance

• providing central oversight of the Group's management of environmental impact to help ensure that sustainability informs strategic planning and decision making across all Group activities (including investments)

• overseeing that management practices are in line with the Group's risk appetite, our climate and nature strategy and risk policy

• promoting internal awareness and understanding of environment-related risks and opportunities considering the transition and physical risks, and

• identifying opportunities associated with environment, climate and nature and their potential impact on the Group's assets and liabilities, in the short, medium and long term.

  These responsibilities are demonstrated in table 2, shown to the right, which sets out the key activities of the GEC during 2025. The GEC is supported by three subcommittees to review and challenge performance against tolerances and targets: the Environment Risk Subcommittee; the Environment Operations Subcommittee and

  the Environment Reporting Subcommittee, which was established to carry out horizon scanning and integration of environment reporting requirements. The GEC is further supported by working groups that focus on specific regulatory topics.

  Table 2: GEC key decisions and discussions during 2025

  Action

  Metrics Commissioned and approved findings from detailed progress reviews against our SBTs, and with particular focus on temperature-alignment pathways and business travel emissions. targets Approved our methodology for measuring and reporting our carbon footprint, including the

  carbon accounting basis of preparation.

  Approved metrics and targets, including investment metrics, incorporating a review of their effectiveness and methodology, and the application of the rebaselining framework.

  Assessing Reviewed and approved updates to key policies, including deforestation, environmental risk our and fossil fuels. Endorsed the reporting of Asset Management's progress against the COP26 exposure Deforestation commitment, covering progress on assessment and engagement undertaken

  with investee companies on deforestation risks.

  Assessed our exposure to physical risks through quarterly trend updates and model refinements and oversaw delivery of enhanced flood data and an expanded suite of flood-risk metrics.

  Reviewed our climate-related collaboration and membership commitments to assess associated reputational risks, ensure cross-Group consistency, and support regular evaluation of external memberships in line with our risk management requirements.

  Risk Oversaw and directed our response to the PRA's updated requirements on managing climate- appetite related financial risks, drawing on a comprehensive gap analysis to inform updates to our framework.

  Reviewed and approved updates to the controls used to manage our exposure to climate and nature-related risks, ensuring continued alignment with our risk-appetite framework.

  Setting Set climate-related expectations within our strategic planning process, ensuring integration our of climate considerations into long-term business and risk decisions.

  strategy Approved our engagement strategy for COP30 to support strategic positioning and advance priority climate objectives.

  Approved the approach for the refresh of our Climate and nature transition plan to ensure alignment with our strategy, evolving expectations and long-term priorities.

  Oversight Monitored the Group's progress against our climate and nature commitments, ensuring clear accountability for delivery across the organisation.

  Provided strategic oversight of our nature-based solutions project.

  Provided central oversight of activities and actions relating to climate and nature risk.

  Additional governance is also in place at an entity-level, where relevant, across the Group. Asset Management, as the investment management division, is where climate risks are the most material from a governance and risk management perspective. In Asset Management, ESG oversight is integrated within the existing governance and oversight structure.

  Specific ESG oversight requirements include delivery of portfolio ESG objectives, maintenance and application of the net zero framework and the coordination of ESG programmes, alongside advising the Asset Management Executive Committee on responsible investing matters.

  We have disclosed some specific further detail on legal entity governance on page 56.

  Risk management framework

  ‌We manage our business to align with the mitigation of climate change beyond the 1.5°C 'Paris' objective and to be resilient to the risks of different climate outcomes.

  Our key risk monitoring metrics are:

• investment portfolio GHG emission intensity

• operational footprint decarbonisation.

  TCFD recommendation

  Describe how processes for identifying, assessing and managing climate-related risks are integrated into the organisation's overall risk management.

  Our risk landscape

  The risks from climate change represent another dimension of our existing risk exposures and are embedded in the way we manage these risks.

  Our governance structure is used to support the Group's understanding and management of these risks.

  The uncertain nature of the risks from climate change and nature loss, and the lack of historical data to support decision making, makes quantifying the risks more difficult than some other areas of our risk profile.

  However, it is widely recognised that actions taken today will influence the likelihood of different climate outcomes and impact on future risk exposures. This, alongside climate scenario analysis, informs our risk management framework.

  Our Scenarios chapter provides more detail about this analysis. These scenarios incorporate a longer-term time horizon into their analysis, and we also use narrative scenarios to further test our resilience. Informed by this work, we have carried out a detailed assessment of how we could expect these risks to emerge across our business model.

  Climate change and nature loss risks and wider environmental risks will emerge through our current risk exposures, and the relevant Group policies set out our approaches to identifying, assessing, measuring, managing and monitoring these risks. On the following pages, we set out our key risk management actions and clarify why our main focus is on transition risk.

  Internal risk management landscape (risks and strategy)

  External risk management landscape (impacts and considerations)

  Climate risk categories

  Transition risks The move to a low-carbon economy

  Physical risks

  The direct impacts of a warming world on assets and liabilities

  Corporate risks Reputational and regulatory risks/ fines

  Climate strategy

  Asset Owner

  • Reducing the intensity of our financed emissions

  • Investing in the transition

    where it creates long term value

    Asset Manager

  • Products we offer

  • Active engagement

    Our Operations

  • Decarbonising our operations

Identification

Monitoring

Measurement

Risk management actions

Our external focus

Climate science Time horizons Sectoral pathways Climate scenarios

External drivers

Scientific understanding

Policy and regulation

Market demands

Environmental solution innovation

Global decarbonisation progress

Weather events Climate sentiment Availability of data

Our approach to risk identification

‌We have integrated climate risk management into our existing risk and governance framework and have carried out a detailed assessment of how we could expect climate and nature risks to emerge across our business model.

We are earlier in the journey with nature-related risks and continue to incorporate these, building on our integration of climate risk. We regularly

Type of risk Possible effects arising from climate change and nature loss From the products we write

Longevity (for annuities) More extreme climate events may lead to changes in life expectancy and thus impact our assumptions. These changes will emerge gradually as the effects are experienced or through increased certainty around future climate pathways and the associated health impacts.

Mortality/morbidity Similar to longevity, the impacts will emerge gradually, so our future assumptions will be impacted before there are material changes (for life and critical illness cover) in the number of claims.

review our approach to climate risk identification to ensure our risk management remains appropriate and proportionate to the

underlying risks.

The risks from climate change and nature loss are far-reaching, uncertain and broad-ranging. As much of our balance sheet is based on assumptions and expectations of future experience, risks can materialise through both actual change in experienced profits or losses, as well as changes in those future expectations.

Focusing on transition risk

We focus on transition risk because successful delivery of 'Paris' implies a fundamental change to the global economy in the short term. We think this is the key near-term issue and source of risk for our business, specifically for our investment portfolio. While we have established risk management practices to manage physical risks, our insurance liabilities are not linked to losses due to damage of any underlying asset. Physical risks are mostly limited to some of our assets

and operations, and we continue to monitor our exposure, taking appropriate actions as required.

Reinsurance counterparty While we would not expect climate change to pose significant risk to our short-term counterparty exposures, it may impact long-term reinsurance counterparties, who are likely to have a similar exposure to the prudential risks as outlined under longevity and mortality/ morbidity above, as well as being further exposed to the physical risks due to their property and casualty businesses. This could change our assessment of the counterparty risk.

From the investments we hold

Market May cause changes to asset values, asset returns and other market risk exposures, such as:

• equity and property risk through asset values being exposed to a (potentially sudden) repricing to reflect transition risks to a low or carbon-neutral economy, or due to more frequent and severe weather events and longer-term shifts in climate impacting on asset values, either through actual experience or changed anticipated future experience

• possible enhanced asset returns, for example increases in equity valuations for companies enabling the transition to a low-carbon economy

• other macroeconomic factors such as interest rates, inflation and foreign exchange rates.

  Credit May cause movements in credit spreads and credit rating transitions:

• credit spread movements due to similar processes as those driving changes in the equity valuation described above

• credit rating transitions due to changes in either actual or anticipated default rates.

Client funds May impact all client funds which are exposed to the material financial risk posed by climate change and nature loss. Note, that it is our clients who ultimately choose specific mandates and bear the risks, but we can have a positive impact by helping them to take action on climate/environmental change, via disclosure of climate metrics and assessment of the implications of climate change on their assets, or offering products with reduced exposure.

From the environments we operate in

Our operations We have direct exposure to climate change and nature loss through our operational carbon footprint and the supply chain that supports it. This may be through physical impacts on our operations and offices, or through transitional risks impacting on our operational processes and costs. This could impact our ability to meet our operational decarbonisation targets.

TCFD recommendation

Describe the organisation's processes for identifying and assessing

climate-related risks.

People, processes, systems and external events

Evolving regulation and legislation

As we change how we invest and operate and the products and services we offer, we must ensure we have the right skills for the future and update our systems and processes to incorporate climate change considerations. Our commitments assume that governments will implement required policy changes; the firms we invest in will deliver their targets; and, there will be societal change on an unprecedented scale over the next decade.

We operate in highly regulated markets and the regulatory approach continues to evolve. New interpretations of compliance expectations could require changes to our products or business processes. This may expose us to financial penalties, remediation costs or reputational damage.

Evolving sentiment Sentiment is often subjective and our approach might fail to resonate with all stakeholders. This may expose us to reputational risk.

Risk management approach

‌Materiality assessment

Our risk management approach to the financial risks arising from climate change and nature loss reflects our strategy and the materiality of the exposures we have. When assessing materiality, we consider both how the Group is affected

by climate change and nature loss, as well as the Group's own impact.

The effect of future uncertainty over climate change pathways is that the evaluation of climate-related risks and impacts has a high degree of estimation uncertainty, with a wide range of possible outcomes greater than our materiality for the Group's consolidated financial statements.

Our scenario modelling enables us to assess how the impacts from climate change may emerge under a range of climate scenarios and time horizons. Given our business model, we assess the most material financial risks from the potential impact of climate change on the value and credit rating of our assets.

As detailed in the Scenarios chapter, we have invested in our capability to develop possible transition pathways to differing warming outcomes. The scenarios presented

show potential portfolio impacts under a given scenario. They are not forecasts or predictions, nor are we saying they are equally likely.

However, these scenarios do inform our understanding of transition risk, identifying sectors where the transition is likely to be more disruptive and the potential timeline of impacts. As a signatory of the PRI, we also monitor the progress of the Inevitable Policy Response scenario work, alongside other bespoke scenarios.

Management actions

We deploy a range of management actions to control our exposure to climate-related risks associated with our investments and operations, to meet our risk management objectives, including:

1.

an established framework for environmental commitments

2.

application of exclusions and environment-related escalation

3.

physical risk controls

4.

review of our existing tolerance framework to incorporate climate and nature considerations

5.

active engagement.

Measurement

Climate transition risks are primarily measured in relation to our carbon exposures. We are committed to reducing the carbon footprint

of both our operations and our investment portfolio GHG emission intensity (measured in units of CO2equivalent) to align with the 'Paris' objective.

We appreciate that nature-related risks could have significant macroeconomic implications and be a source of risk to financial stability. We continue to build up our nature data capability while noting that specific and locality-driven risks arise within complex operational and investee supply chains, where data collection and measurement activities are particularly challenging.

Investment portfolio footprint

We measure the contribution of our investments to CO2e emissions, calculating portfolio economic carbon emission intensities at both Group and divisional level.

Through our climate scenario analysis, we measure the risks to assets and liabilities. This is measured through the impacts on equity and bond valuations and credit ratings, in each scenario.

Assessment of our investment portfolio is dependent on good-quality, comparable cross-industry data and disclosures of climate-related metrics and impacts. This enables us to steer our investments successfully, identify and manage risks, deliver on our climate ambition

of decarbonising our portfolio and comply with our own disclosure objectives. We are supportive of the need for global consistency with regards to reporting, disclosure

and labelling.

Operational footprint

We measure and monitor the direct carbon emissions of all our operational businesses. We have set SBTs covering our scope 1 and 2 operational emissions. These targets have been verified by the SBTi, and we monitor progress made against these.

1. Established framework for progress towards our climate commitments

   Achieving our Group commitments will be challenging, reflecting the complexity of addressing the systemic issue of climate change and nature loss. Due to the transformational nature of a successful net zero transition,

   strong partnerships are needed to support a common vision and long-term objectives.

   Our climate collaborations can be found in the engagement strategy chapter. Over 2025, our approach to these collaborations was reviewed to ensure continued alignment with

   our strategy. Our framework accounts for all GHGs and covers scope 1, 2 and material scope 3 emissions (see page 32).

   Our progress and long term goals are supported by annual and interim targets to enable regular monitoring of progress towards our commitments. These commitments are supported by our Climate and nature transition plan, which has been updated in 2026, against which progress is reviewed and publicly reported on at least annually and overseen by the GEC. Our commitments are credibly aligned with the latest science. They are only achievable if the other parties, on whom we are dependent, also decarbonise on a 'Paris'-aligned trajectory.

   Our commitments are made in the expectation that governments will deliver on their own commitments and the required policy actions will be implemented to ensure they remain aligned with the 'Paris' objective. We continue to incorporate nature into this framework.

2. Exclusions and environment-related escalation

   Our risk management approach recognises the importance of engagement with investee companies. Our Investment Management

   Agreements (IMAs) have climate-specific clauses that enable us to manage our targets, including exclusions that focus on key areas of transition risk (such as coal and oil sands activity and unconventional drilling and CIP exclusions). The IMAs enable collaborative management against climate targets. We also take account of the full range of emission-intensive sectors within our portfolio management approach, through our environment-related escalation process.

   Environment-related escalation

   Our escalation process currently addresses high carbon, high temperature alignment, coal, unconventional oil and water management

   elements, with the elements evolving through time. Individual issuers are identified from underlying criteria within each element, including where the carbon intensity is greater than a defined threshold across relevant sectors. This acts as an early warning system and provides a degree of control over the accumulation of risk through time.

   Companies continue to be assessed on a range of criteria, including our assessment of the underlying transition and physical risks. Our approach recognises that oil and gas will follow different phase-down pathways, taking particular assessment of unconventional oil and gas production (such as Arctic oil), and that counterparties' own transition plans will impact on our assessment of the underlying risks. In 2025, we added 2 issuer exclusions from new investments, while we have reduced our legacy exposure to excluded names by

   £73 million. The escalation process is also supported by more defined exclusions, where there is a clear incompatibility with the 'Paris' objective.

   Exclusions

   Asset Management's CIP outlines the minimum standards for sectors in relation to climate change, nature degradation, and the transition to a net zero economy. If minimum standards are not met, the company may be subject to voting sanctions and divestment consequences for the funds adopting CIP exclusions1.

   Coal and oil sands activity

   We recognise that coal's role in the current energy mix is incompatible with the 'Paris' objective, which is why our fossil fuel policy focuses on this sector. We continue to evolve our coal and oil sands policy, maintaining our trajectory towards phasing-out investments in coal by 2030, with the current details set out below.

   Building on Asset Management's coal policy, the Group has implemented investment exclusions on those companies that have a material proportion of their revenue from the mining and extraction of thermal coal, from coal-based energy production or from oil sands. Within our own balance sheet, last year we tightened our policy to explicitly add new investment exclusions to issuers with more than 5% revenue exposure to either thermal coal mining or coal-based power production without 2030 or earlier phase-out plans.

   Given the historical role of coal in the global energy system and the size of our investment portfolio, we have c.£2.0 billion of exposure to companies, mostly Utilities, within our proprietary assets which report that some aspect of their revenue is linked to coal.

   Aligned to our above commitment for a 2030 exit from thermal coal mining/coal-based

   power production, we have begun assessing the phase-out plans of our underlying investments, only permitting holdings that expect to have below 5% exposure in 2030.

   Today, we have £0.8 billion (<1%) exposure to holdings with above 5% revenue exposure to thermal coal mining/coal-based power production, of which a proportion have credible phase-out plans. We do not have any significant exposure to oil sands.

   Direct investments in new oil and gas infrastructure projects

   In line with our fossil fuel policy, we will not invest in new oil, gas and associated energy infrastructure projects that are not aligned with 'Paris'-objectives. This is consistent with the NZAOA oil and gas position2. Our approach will ensure we are thoughtful in how we support a transition, by considering regional and global energy infrastructure needs.

   Deforestation

   We have developed and will continue to evolve our investment deforestation policies. We have in place exclusions in relation to violators of the UN Global Compact standards which include deforestation controversies. We maintain exclusions of names called out as engagement laggards through the CIP, where an insufficient zero deforestation policy, among other climate

   considerations, has led to an exclusion restriction.

   We will continue to leverage the activities of Asset Management's stewardship and

   engagement approach as set out in the Asset Management deforestation policy to engage on this topic3.

   1. These exclusions are also applied to the Group's proprietary assets. We will carry out in-depth assessment and engagement with 'dial-mover' companies over a period of two years. We will report on progress and continue to vote annually, while outcomes against engagement objectives and related capital allocation decisions will be assessed and made every two years. Companies in the current CIP exclusion list are added to the Group's own investment list, helping to drive change in the market by supporting our engagement with the use of the Group's own balance sheet capital.

   2. https://www.unepfi.org/wordpress/wp-content/uploads/2023/03/NZAOA-Position-on-the-Oil-and-Gas-Sector.pdf

   3. https://www.legalandgeneral.com/asset/49027a/globalassets/lgim/_document-library/esg/lgims-deforestation-policy0823-update_v0.4.pdf

   Risk management approach continued

   Coal and oil sands policy

   Where we (via Asset Management) invest on behalf of others1 Where we have direct investment control

   Legal & General - Asset Management Limited and its subsidiaries will exclude from investments those companies that are involved in the mining and extraction of thermal coal as set out below. For more detail about which investments this applies to, please see the coal policy1

3. Physical risk controls

   Where specific investments pose an unacceptable exposure to physical risk, we deploy tools such

   .

   as physical risk modelling, categorisation of exposures, incorporation into the underwriting process and clear exposure limits. We have developed and will continue to evolve our approach for limiting exposure to physical risks across the different geographies in which the

   Launched in 2016 in response to the Paris Agreement, the CIP covers 20 'climate critical' sectors, identifying voting and potential divestment sanctions (for applicable funds).

   Given the important connections between climate change and nature, the CIP also incorporates expectations around biodiversity and, for relevant sectors, deforestation. We discuss how this forms a part of our strategy on page 19, and we disclose our metrics on page 38.

   Coal mining

   Screening will be carried out and exclusions will be applied to those companies that generate 20% or more of their revenues from coal mining and extraction.

   Coal power generation

   Screening will be carried out and exclusions will be applied to those companies that generate 20% or more of revenues from coal-fired power generation. We retain the ability to invest where a company has set out a clear 'Paris'-aligned plan to phase out coal by 2030 in OECD countries and by 2040 in non-OECD countries. We retain the ability to fund specific issuing entities, where a company has non-coal subsidiaries.

   Oil sands

   Screening will be carried out and exclusions will be applied to those companies that derive more than 20% of revenues from oil sands (sand and rock material that contains

   No new investments in issuers with more

   than 5% revenue exposure without a 2030 or earlier thermal coal phase-out plan2,3.

   Intention to phase out legacy investments in issuers with more than 5% revenue exposure by 20302.

   No new investments in power generation companies with over 10GW absolute coal capacity3.

   No investments in new coal mining or coal plants and no further investment in companies that are investing in new coal capacity3.

   .

   No new investments in issuers with more than 5% revenue exposure2,3

   Group is active.

4. Review of our existing tolerance framework to incorporate climate considerations

   The risks from climate change represent another dimension of our existing risk exposures. To ensure that these considerations are integrated across the Group's governance system, our existing framework is regularly reviewed and updated. For example, we now also extend our fossil fuel exclusion policy into relevant new contractual documentation for reinsurance transactions.

5. Active engagement

Alongside close monitoring of the political and

Our targeted approach, using voting and investment sanctions to encourage companies to step up on sustainability, has contributed to

companies making improvements to their climate targets and strategies. This has significant risk management benefits.

Global research and engagement groups (GREGs)

During 2025, work continued within the GREGs, which bring together experts from our Investments and Stewardship teams, to research and identify the challenges and

opportunities across sectors and asset classes, for key sustainability issues, including climate change.

crude bitumen).

1. cms.lgim.com/globalassets/lgim/_document-library/capabilities/lgimh-coal-policy.pdf

   regulatory landscape, an important part of our strategy remains to engage with policymakers, regulators and investee companies in support of climate action. This benefits our own shareholders and the wider market. This is actively pursued by Asset Management on

   the Group's behalf.

   Climate Impact Pledge (CIP)

   Through Asset Management's dedicated engagement programme, the CIP, we continue to be committed to helping companies step up on their climate and nature-related commitments, build resilient strategies for the transition and succeed in the low-carbon world.

   Monitoring

   Monitoring and updating our measurements and management actions over time is critical. This helps to ensure the risk management framework captures adequately the extended time horizons associated with climate risks.

   Our understanding of the risks from climate change and nature loss and the actions that are needed to mitigate them are based on science. This continues to evolve. The actions that the world is taking will to some extent inform the actions that we can take. Through our own work, we continue to progress our understanding and quantification of climate risk, and appreciate that our understanding of the risks arising from nature loss are less mature.

2. Aligned with initial SBTi requirements on which L&G's existing SBTs are based. 5% is a materiality threshold that acknowledges the fact that data quality issues can lead to higher than 0% exposure disclosed by data providers and also that a minimal fossil fuel powered exposure can be required for base load or balancing generation from renewables.

3. This is tracked via relevant third-party data with differing reliability - an area which remains challenging for asset owners.

Physical risk

In our Private Markets business, we are continuously reviewing and evolving our approach to assessing climate risk to ensure we are aligned with industry best practice. Working with climate risk specialists at Marsh and climate

modelling provider XDI, we have focused on enhancing our incorporation of climate risk considerations as a part of our

due diligence approach and ongoing management of our real estate equity assets.

Flood risk has been embedded within our investment strategy for many years and is a key component of our standard due diligence process for all property

acquisitions. Recently, we have enhanced the investment due diligence process for all real estate equity acquisitions to further incorporate forward-looking climate risk modelling across a wider range of hazards, and to better support the integration of future climate perils into investment decisions.

To further support our approach to improving climate resilience across new and existing assets, we have also developed a new Climate Adaptation

Toolkit. Following a granular asset level physical climate risk assessment process, the toolkit provides guidance to support the review and prioritisation of risk mitigation measures for any assets identified to be exposed to physical

risks, utilising a suite of adaptation considerations. This new process is now being rolled out across the platform.

More information is available in our Private Markets Real Estate Climate Report1.

Climate risk score across England and Scotland for our housing and urban regeneration businesses under a high emissions scenario2,3

Climate risk score distribution (% of assets)

Low risk Medium risk

High risk

Source: Climate modelling provider, XDI, and L&G's assessment of real estate equity assets in the housing and urban regeneration businesses across England and Scotland as at 31 December 2024 for a high emissions scenario, in line with the IPCC Representative Concentration Pathway (RCP)

8.5 'business as usual' scenario. Note: assets in the Channel Islands not shown as well as three assets held in the US. Assumptions, opinions and estimates are provided for illustrative purposes only. There is no guarantee that any forecasts made will come to pass.

We expect ISSB to increase convergence in the financial sector over time and continue to monitor developments closely to develop our understanding of what the new standards mean for our calculation methodology, timeframe and scenario definition. While we monitor and disclose our metrics, the underlying methodologies evolve, reflecting the availability and quality of data, regulatory expectations and emerging

industry practices.

Our business entity-level risk management

Group-level climate risk management is cascaded down to all our businesses via the divisional committee structures. Where appropriate, the senior leaders from the divisions are members

of the GEC, ensuring adequate oversight at this level. Asset Management, as the investment management division, is the most material division from a governance and risk management perspective. Our Institutional Retirement and Retail businesses engage with Asset Management as their primary asset manager, to obtain climate data and conduct scenario analysis. This information is an integral part of their risk management process and an area our individual businesses expect to continue developing their understanding of over time. Specific further entity-level disclosures are on page 56.

TCFD recommendation

Describe the organisation's processes for managing climate-related risks.

1. https://am.landg.com/asset/4a1ab6/globalassets/lgim/_document-library/responsible-investing/real-estate-equity-climate-report-2024.pdf/

2. Statistics have been calculated based on the average damage ratio (expected damage loss as a proportion of an asset reinstatement value) from all climate hazards.

3. Seven climate hazards are assessed: river flood; surface water flood; coastal inundation; forest fire; extreme wind; coastal erosion; freeze thaw.

Engagement and remuneration

‌Engagement

As a large asset manager, we will continue to address financially material climate and nature risks in the real economy consistent with our fiduciary duty. Engagement is a key part of our approach outlined below.

Remuneration

Beginning in 2021,

we set climate-related targets in our executive directors' remuneration.

Performance share plan (PSP)

Purpose

The PSP provides a direct and transparent link between executive pay and the delivery of shareholder returns over the longer term.

The PSP is a conditional award of shares, subject

1. Transparency

   We publish our assessment of companies against our expectations:

   • L&G ESG Score rates c.17,000 companies.

   • Our CIP rates 5,000+ companies across 20 climate-critical sectors.

We publish our policies, our latest views and our expectations of companies on our website and blog.

3. Escalation

If a company does not meet sector 'red lines', as set out in sector guides published on our website and communicated with the company, we may vote against the chair at its AGM, considering overall progress on climate and nature. Under our CIP, 273 companies out of the CIP universe were identified as being subject to voting sanctions for not meeting our minimum standards during 2025.

1. Engagement

   Company engagement:

   • We undertook over 4,000 engagements with companies on environmental topics in 2025.

   • Under our CIP, we targeted 100+ companies for in-depth engagement across 20 'climate-critical' sectors.

In 2025, we conducted our largest ever outreach campaign, writing to the

board chairs of nearly 2,900 companies assessed under our CIP quantitative assessment tool.

1. Measuring progress

   Climate Impact Pledge:

   • 245 companies identified for votes against in the quantitative stream, a 46% improvement versus 2024.

   • 28 companies identified for votes against in the qualitative stream, a 24% improvement versus 2024.

   • Following improvement, 1 company was reinstated in applicable funds: Cosco Shipping Holdings.

   • 15 companies remain on the CIP divestment list (for applicable funds).

Annual variable pay (AVP)

Purpose

AVP incentivises and rewards the achievement of annual financial performance and delivery of strategic priorities. 50% of AVP is received in cash and 50% of the AVP award is deferred into restricted shares for a further three

years, reinforcing retention and alignment with shareholders.

Climate considerations

30% of AVP is based upon the achievement of strategic objectives, which includes ESG. In addition, progress against key environmental commitments may act as a modifier to AVP outcomes if sufficient progress has not been made. For 2025, environmental performance measures are aligned to our key commitments in our 2025 Climate and nature report.

This includes progress on portfolio carbon emissions intensity reduction and delivery

of our operational emissions SBT in line with annual and interim milestones.

to a performance period of no less than three

years and a holding period such that no awards are released before five years from the grant.

Climate considerations

The 2025 PSP award has a 20% weighting directly linked to how the business has performed against its climate commitments.

This includes our operational emissions SBT, investment portfolio temperature rating and portfolio GHG emission intensity reduction with a weighting of 10%, 5% and 5% respectively.

For the 2026 PSP, progress against climate commitments has been incorporated into a broader performance measure considering L&G's progress against its overall strategic priorities with the new performance measure having an increased weighting of 30%. Further details of the performance conditions and targets can be found in the Directors' report on remuneration

in the Annual report and accounts.

Discover more

Annual report and accounts on page 86

Metrics and targets

Metrics and targets

‌Overview

Our metrics and targets sit at the core of how we monitor, manage and communicate our progress in addressing climate- and nature-related risks and opportunities.

They convert our strategic ambition into quantifiable indicators that support decision-making, enable external stakeholders to assess our performance and create accountability across our business.

Together, they form a framework that guides both short-term actions and long-term planning.

We continue to strengthen our underlying data and methodologies so that our metrics remain

Targets represent the trajectory of change we are committed to delivering. Our SBTi-validated targets provide a scientifically grounded pathway for decarbonisation and act as a reference point for assessing whether current actions are sufficient to meet future ambition. We remain transparent about the assumptions that underpin our targets and the methodology used in developing them, recognising that periodic refinement may be required as the external environment evolves.

By setting out our metrics and targets clearly, we aim to provide a comprehensive view of our performance and progress, grounded in transparency and continuous improvement.

robust, consistent and aligned to emerging

standards. This includes expanding the scope of

our measurements, improving the granularity of our emissions data and developing additional indicators that capture our broader environmental impacts and dependencies.

Strong metrics and targets help us measure progress and stay accountable. We continue to improve our data and methodologies as expectations and standards evolve."

Adrian Chapman

Head of Group Climate Investment Oversight

Legal & General Group Plc Climate and Nature Report 2025 31

Emissions breakdown

Scope 1

Direct GHG emissions

5,398 tCO2e

tCO2e

UK 4,730

International 668

Scope 3

Other indirect GHG emissions

tCO2e

Category 3. Fuel and energy-related activities 5,795 Category 5. Waste 3

Category 6. Business travel 4,617

Category 7. Homeworking (excluding employee commuting) 3,671 Category 8. Upstream leased assets (serviced offices) 313

Category 13. Downstream leased assets 208,981

Category 15. Investments 5,485,773

5,709,153

tCO2e

14,399 tCO2e

‌The size of each scope of emissions within our footprint, and our ability to reduce them, are considerably different.

As a financial institution, our scope 3 emissions are our largest source of emissions, and category 15 (investments)

emissions make up by far the largest

segment of this total. Our own investment activity is fundamental to decarbonising our investments; however, there are factors outside of our control (such as carbon emitted by individual entities, market movements and lags in underlying data) which can cause significant volatility in the calculated metrics. We have indirect control over the reduction of these emissions.

Scope 2

Indirect GHG emissions

14,523 tCO2e

Location-based

UK

International

tCO2e

11,625

2,898

Scope 1 and 2 emissions are significantly smaller in absolute terms; however, our control over the reduction of these emissions is greater. While there are still dependencies associated with these emissions (such as the speed at which electricity grids decarbonise), overall, the direct actions we take have a greater impact on reducing the emissions from these categories.

TCFD recommendation

Disclose scope 1, scope 2 and, if appropriate, scope 3 GHG emissions and the related risks.

Definitions

Scope 1: Direct GHG emissions.

Scope 2: Indirect GHG emissions from the consumption of purchased electricity, heat or steam.

Scope 3: Other indirect emissions not covered in scope 2 that occur in the value chain of the reporting company.

Commitments in detail

‌On page 6 we outlined our key targets to deliver. We summarise all our commitments here and outline the key milestones for us to deliver as part of our longer term Climate transition plan

off | on

to achieve net zero by 2050. Commitment By Milestone (where relevant) By On track

These pages supplement our journey to net zero with our detailed commitments, as well as their interim milestones. These more granular

pages focus on 'what' we plan to achieve, with the earlier narrative in this report setting out the 'how'.

Below, we have drawn out the commitments we disclosed in our 2024 Climate and Nature report which were planned would be completed 2025.

We are targeting a net zero asset portfolio by 2050, in line with a 'Paris' objective, and continue to evolve our interim targets against this objective.

We have set SBTs in accordance with the SBTi.

2050 We will reduce portfolio GHG emission intensity by 50% and increase financing of low-carbon technology and infrastructure1.

2030 Focus area: Align the (SBTi-defined) portfolio temperature score for our listed equity, corporate bonds and corporate loans portfolio, within our shareholder investments as follows2:

2030

2026

Our commitments achieved during 2025

Commitment By Update

We will report progress on the milestones to 2025 As in previous years, we have disclosed that

As set out on page 12, we will review our "portfolio climate alignment"

target approach over 2026 and will provide

• from 2.4°C at end 2021 to 2.1°C by end 2026, covering portfolio company scopes 1 and 2

• from 2.9°C at end 2021 to 2.5°C by end 2026,

covering portfolio company scopes 1, 2 and 3.

reduce agricultural commodity driven deforestation in our investment portfolios4, and we will increase investment in nature-based solutions.

Asset Management will report progress on the milestones to reduce agricultural commodity-driven deforestation in our investment portfolios through successful company engagement4.

We will divert 100% of waste from landfill by 2025 in all offices and directly delivered housing development projects where

we are responsible for waste management.

We will reduce overall waste volumes per core occupied office by 20% from a 2019 base year.

c.10% of our proprietary assets, by value, as at end 2025, are with c.400 companies which have been identified on data sources related to tracking potential deforestation risk exposures. In addition, we have invested £0.3 billion in nature-based solutions.

2025 Progress report published4 in December 2025, outlining the steps we have taken over the past few years to address potential agricultural commodity-driven deforestation risks within our investment portfolios.

2025 Achieved

We will continue to divert 100% of waste from landfill in all occupied offices.

2025 We have exceeded this target, noting that it was set pre-pandemic, when office occupancy levels were higher.

annual disclosures.

We will continue to disclose this metric in our

an update on this review within our 2026

Climate and Nature reporting.

We will continue to evolve our thermal coal exclusion criteria, phasing out investment-related coal and oil

sands exposures by 20302.

We will report progress in the pursuit of eliminating agricultural commodity-driven deforestation in our investment portfolios3

and we will increase investment in nature-based solutions.

Further asset class and sector-specific targets (covering real estate and electricity

generation project finance portfolios summarised on page 36).

2030 Coal exclusions restrict new investments in issuers with more than 5% revenue exposure to either thermal coal mining or power production without 2030 or earlier thermal coal phase-out plans.

Ongoing We will disclose deforestation risk and mitigation activities in our portfolio

We will report progress on investment in nature-based solutions and defining associated financing criteria

2030

Active

Active

Active

We will purchase 100% of directly procured electricity group-wide from renewable sources.

2025 Achieved

We will continue to purchase 100% of directly procured electricity from renewable sources.

1. From a 2019 base year.

2. Investment with more than 5% revenue exposure by 2030.

3. Focusing on palm oil, soy, beef and leather, pulp and paper.cocoa, coffee, and rubber sectors. Asset Management's 2025 publication: https://am.landg.com/asset/4aece0/globalassets/lgim/_document-library/capabilities/investment-stewardship/ deforestation-progress-report.pdf

Discover more

Climate and nature transition plan 2026

Commitments in detail continued

‌Commitment By Milestone (where relevant) By On track off | on Commitment By Milestone (where relevant) By On track off | on

Asset Management is committed to work in partnership with our clients to reach net zero GHG emissions by 2050 or sooner across all AUM.

Asset Management is committed to achieving net zero carbon for all of its real estate equity assets by 2050 or sooner.

2050 Focus area: In partnership with clients, Asset Management will target 70% of AUM to be managed in alignment with net zero1,2.

Our progress towards meeting our interim target has been as expected to date but we foresee increasing challenges with the accelerated adoption of climate investment required over the next few years. Therefore, we will review how our interim plans and targets can best reflect achievement of our net zero 2050 objective, taking into account evolving client and industry approaches.

2050 Asset Management will target net zero operational carbon within the Sustainable DC Property Fund by 2030.

Asset Management will target the removal of fossil fuels within areas of commercial property we control by 2030. In isolated instances where this is not possible, Asset Management commits to publishing a list of affected assets and a roadmap to removing fossil fuels subsequent

to 2030.

We have set an SBT-aligned target to reduce Asset Management's downstream leased real estate portfolio GHG emissions per square metre by 55% by 2030 from a 2019 base year.

2030

2030

2030

2030

We will reduce our energy usage in line with our journey to net zero and source energy from renewable sources.

All new homes delivered from 2030 will be enabled to operate at net zero carbon, both regulated

and unregulated energy.

We will use hybrid working practices and technology to actively reduce the business miles we travel in line with our commitments to net zero.

We will protect the natural resources we use through the implementation

of sustainable procurement principles.

2050 We have set a SBT to reduce absolute scope 1 and 2 GHG emissions by 42% by 2030 from

a 2021 base year3.

From 2030, our occupied offices (scope 1 and 2) will operate with net zero emissions4.

We will continue to purchase 100% of directly procured electricity group-wide from renewable sources.

2030

2050 From 2030, our group-wide business travel will operate with net zero carbon emissions.

2050 By end of 2026, 80% of our suppliers, by spend, will set a science-based carbon reduction target5.

2030

2030

Active

2030

2026

1. Excludes sovereigns and derivative securities until such time as agreed methodologies exist.

2. See pages13 and14 for further details.

3. Inline with SBTi guidance our scope 1 & 2 target baseline is annually reviewed to reflect business & portfolio changes.

4. Applies to offices L&G employees occupy where L&G have direct operational control, as defined by the Global Real

   We will protect and minimise the use of water resources in the spaces we create and occupy.

   2050 By 2030, our core occupied offices4 will consume a maximum of 22 litres of water per person per day in line with the Real Estate Environment Benchmark.

   2030

   Estate strategy.

5. We define a target as science based if it is aligned to SBTi criteria i.e. is a mid term reduction target with enough ambition to align with the global net zero trajectory.

Zero water pollution incidents. Active

We aim to minimise and design out waste through the careful implementation of the principles of the circular economy.

2050 We will continue to divert 100% of waste from landfill in all core occupied offices4.

Active

Asset owner

‌Changes to comparative and baseline amounts

Prior-year comparative figures and baseline metrics have been re-presented following methodology and data-quality changes introduced in 2025. The affected metrics relate to refinements to the intensity metrics for private credit proxy allocation and improved data mapping and quality for corporate oil and gas exposures. Updated metrics and previously reported metrics are included

in our asset owner detailed metrics dashboard in table 7 on page 39.

GHG emissions intensity of our investments

Our investment emissions, generated within our investment portfolios and classified as scope 3 category 15, creates the largest contribution to our carbon footprint. We have implemented targets that support our commitment to align with a 'Paris' objective.

Methodology and data approach

Our primary metric is the GHG economic emissions intensity of our portfolio of Group proprietary assets1. This is the total of all the GHGs produced by our share of the assets that we invest in, and is reported using CO2e2 emissions data.

Please refer to our Basis of Preparation on pages 50 to 55 for further detail on the methodology.

Progress in 2025

Table 3 shows the 2025 Group investment portfolio GHG emission intensity score of 51.2 tCO2e/£m invested (2% increase from 2024; and (35)% decrease from the 2019 base year). When applied to the £107.3 billion of assets in this analysis, this gives an absolute footprint of 5.5 million

tCO2e emissions (2024: 4.8 million tCO2e), with the increase primarily driven by the higher proprietary asset portfolio value.

Within the annual movement over 2025, an 0.2% increase is attributed to the change in updated portfolio emissions (from the updated company emissions disclosures, and from trading activity) by holding EVIC constant, as shown in table 3. The movement contains decarbonisation within our utility sector holdings, through a combination of trading activity alongside portfolio investee decarbonisation. This movement is offset by increasing sovereign exposure, which currently has a higher emission intensity than our non-sovereign portfolio, although we expect this impact to reverse in the medium term.

An increase of 1.8% is then attributed to changes in the investee EVIC and foreign exchange rate movements in 2025, illustrating the impact that market movements can have on economic emission intensity metrics. Table 5 shows the large contribution to the overall score from the utilities and government sectors.

Investment portfolio weighted average GHG emissions intensity

(WACI) (tCO2e / $m revenues) 116 106

Table 4: Portfolio GHG emission intensities breakdown by asset class

Table 5: Portfolio GHG emission intensities breakdown by sector

Standalone

1. Total proprietary assets of £108.3 billion (2024: £99.1 billion) comprises £107.3 billion (2024: £96.1 billion) assets qualifying as scope 3 investment emissions and £1.0 billion (2024: £1.5 billion) of operating assets captured in the operational footprint.

2. Carbon dioxide (CO2) is the most significant contributor to global anthropogenic GHG emissions, which also includes other gases such as methane and nitrous oxide. The equivalent warming impact of non-CO2GHG emissions are measured as tonnes of CO2equivalent (tCO2e).

3. Comparatives and baseline amounts have been re-presented following methodology changes to proxy allocation in the private credit portfolio.

4. Enterprise Value Including Cash (EVIC) set as market valuation of equity plus book value of debt (or book value in the absence of market valuations).

   Deloitte has provided independent limited assurance in accordance with the International Standard for Assurance Engagements 3000 ('ISAE 3000') and Assurance Engagements on Greenhouse Gas Statements ('ISAE 3410') over the selected metrics identified with an ▲. Deloitte's full unqualified limited assurance opinion, which includes details of the selected metrics assured, can be found on pages 57 and 58.

   ‌Mid and long-term trajectories

   While we stay ahead of our target trajectory, we may still see continual volatility from changes in the global economy, as explained below. We remain focused on our mid to long-term decarbonisation target of a 50% decarbonisation by end-2030, as shown in Chart 1.

   In any one period, the portfolio GHG emissions intensity is impacted by changes in the following:

   • organic changes in the emissions from the entities we invest in (noting, that the available data generally relates to emissions for the previous year for corporate issuers, with greater lags for sovereign emissions data)

   • the underlying size/revenues of the company or corresponding sovereign metric

   • the market value of our holdings

   • changes in methodology

Changes in the emissions coming from our investments and our investment activity are key to decarbonising our portfolios in the medium and long term. However, in the short term, factors outside of our control, such as the carbon outcomes of the entity, market movements, and the lag in the reporting of the underlying emissions data, have the potential to create significant volatility in the calculated metrics. We try to identify the underlying trends through techniques such as holding the company size constant over the reporting year, as seen in Chart 1.

Changes in methodology are, and will be, separately isolated where possible and excluded from the decarbonisation progress assessment .

‌Science-based targets (SBTs)

In 2023, we announced our SBTs which have been independently validated by the SBTi. In line with this commitment, we have started to track the associated physical carbon intensity metrics, whereby the emissions are normalised by a measure of physical output, for certain asset class and sector subsets of the portfolio, in line with SBTi requirements1.

Our performance to date within our electricity generation project finance and real estate equity

Chart 1: Group investment portfolio target decarbonisation pathway

100%

80%

76.25%

64.45%

60%

63.54%

40%

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Target decarbonisation pathway Model period

Progress

Fixed EVIC % movement

Table 6: SBTs - Emission-based

Metric Measurement Baseline Target 2025

investment portfolios is given in Table 6. In 2025, we note a reduction in each emission intensity metric, reflecting the progress being made in each sector, within our portfolio.

Our associated portfolio temperature rise targets are given on page 37.

We commit to maintain the emissions intensity of our electricity generation project finance portfolio, within our shareholder investments, at or below 0.060 KgCO₂e/kWh from 2021 through 2030 and only finance 1.5°C aligned electricity generation projects.

Use of proxy data

Where third-party data is not available, we have adopted several proxy approaches to address the coverage gap. For some asset classes, asset class-specific approaches are employed, while for others that are not covered in our datasets, we use sector-based proxies. Proxy approaches are used for the following other asset classes: real estate, lifetime mortgages, private debt and private equity. See pages 51 to 54 for further detail on the data and material proxy methodologies.

We commit to reduce our real estate investment portfolio GHG emissions by 58% per square metre by 2030 from a 2019 base year.

We commit to reduce our downstream leased asset GHG emissions by 55% per square metre by 2030 from a 2019 base year.

kgCO2e / kWh 0.060 0.060 0.011

tCO2e / m2 0.058 0.024 0.036

tCO2e/m2 0.055 0.025 0.027

1. sciencebasedtargets.org/resources/files/Financial-Sector-Science-Based-Targets-Guidance.pdf

‌Alignment metrics

To complement the portfolio GHG emission intensity metrics, we continue to evolve our use of multiple alignment metrics to measure and manage investment impact. Our existing temperature alignment metrics measure and provide a score for the implied warming potential of a company (or aggregate portfolio) while we will review our "portfolio climate alignment" target approach over 2026.

L&G implied temperature alignment

L&G's implied temperature alignment metric describes the climate transition pathway (temperature scenario) each company is expected to align to, based on both historical decarbonisation trends and targets the company has set. It reflects the direct link between global carbon emissions and the likely severity of global warming and allows investors to measure their impact on climate change and evaluate their performance relative to SBTs.

There are three key steps to the calculation of implied temperature alignment:

1. Project a company's carbon emission pathway to 2030.

2. Project relevant science-based sector emission targets using decarbonisation pathways from climate scenarios.

3. Rate a company's implied temperature alignment by assessing carbon intensity against science-based sector targets.

For most companies, implied temperature alignment is calculated on the basis of scope 1 and 2 emissions. Scope 3 emission estimates are included for financials, and oil and gas companies. We use a qualitative scoring methodology for midstream companies' alignments. Electric utilities are assessed on their projected energy mix and the GHG emissions per unit of electricity (tCO2e/MWh) relative to regional benchmarks. For sovereign bonds, we incorporate Climate Action Tracker country-level assessments, country-level decarbonisation targets and historical carbon data to calculate sovereign alignment scores1.

‌Our implied temperature alignment methodology covers listed equities, corporate bonds, sovereign bonds and quasi-sovereign bonds. It does not cover real estate, alternatives or private equity due to data availability, and our 2025 scores are shown on chart 2, alongside the scores for broadly equivalent benchmark indices.

CDP-WWF Portfolio Temperature Rise (PTR)

In line with the commitment to our validated SBTs, we also measure and set targets on our associated PTR score. This metric is based on the original methodology published by a partnership between the CDP and the World Wide Fund for nature (WWF), which scores companies in relation to their published targets2.

Under this methodology, we calculate two metrics, one on the basis of scope 1 and 2 investee emissions and a second including scope 3 investee emissions.

We note that there are numerous portfolio temperature metrics in development across the industry and advise caution in comparing scores across different methodologies at this stage. A key distinction between the L&G and CDP-WWF methodologies relates to assessing the credibility of published targets. Individual implied temperature alignment scores are subject to an internal assessment whereas the PTR scores directly apply published ambitions. PTR scores also do not cover sovereign and quasi-sovereign bonds.

Chart 2: 2025 implied portfolio temperature alignment (°C)

3.0

2.5

2.0

1.5

1.0

0.5

0.0

2.6

2.7

2.5

2.7

2.6

Bonds

Equity

Legal & General

Total Portfolio

Benchmark

Progress in 2025

Our published target on our PTR score is that we commit to align the SBTi-defined PTR score for our listed equity, corporate bonds and corporate loans portfolios within our shareholder investments as follows:

• From 2.4oC2 at end 2021 to 2.1oC (ECOTS aggregation)3 by end 2026, covering portfolio company scopes 1&2.

• From 2.9oC2 at end 2021 to 2.5oC (ECOTS aggregation)3 by end 2026, covering portfolio company scopes 1,2 & 3.

  As noted on page 12, our PTR metric was identified as a focus area last year. We will review our "portfolio climate alignment" target approach over 2026. Our 2025 PTR metric was 2.5oC, covering portfolio company scope 1 & 2, and 2.7oC, covering portfolio company scope 1,2 &3.

  1. climateactiontracker.org/

  2. cdn.cdp.net/cdp-production/comfy/cms/files/files/000/003/741/original/Temperature_scoring_-_beta_methodology.pdf

  3. Enterprise value including cash emissions weighted temperature score (ECOTS)

Chart 3: Exposure to issuers identified in datasets with potential deforestation risks

Consumer, Non-cyclical

Consumer, Cyclical

Banks, Finance & Insurance (Debt) Communications & Technology Energy, Utilities & Commodities

Other

No exposure

‌Nature Metrics

We continue to build our understanding of the Group proprietary assets' exposure to nature-related risks. We focus on risks that cross the climate and nature risk nexus (such as risks from deforestation), while also referring to TNFD guidance for financial institutions.

Deforestation

Investment deforestation risk exposure generally arises from deforestation activity within complex investee supply chains making related data collection and measurement activities challenging.

That said, building on our Deforestation Policy1 within our Asset Management division, we can assess companies based on sector, commodity, geography, and controversies or incidents related to deforestation and human rights in operations and supply chains.

Chart 3 shows that 10% of our holdings, as at end 2025, are with c.400 companies who have been identified on data sources related to tracking potential deforestation risk exposures. Data sources include Forest 500, CDP Forest, Sustainalytics and SPOTT. We internally score the issuers identified above, based on differing levels of deforestation management and expect our exposure to actual deforestation risks to be less than 10%, noting that 9% exposure sources from less than 150 companies.

Chart 4: Portfolio exposure to sectors with material nature-related dependencies and impacts

Other Textiles Apparel & Luxury Go... Oil Gas & Consumable Fuels Beverages & Food Products (i...

Utilities Construction Services

Total

-%

10%

20%

30%

40%

50%

Direct Mapping

Indirect Holding - Lower Bound Indirect Holding - Higher Bound

We continue to deepen our oversight and underwriting where we can to mitigate exposure identified while data provision matures, including continued industry engagement alongside Asset Management.

TNFD metrics

The TNFD Financial sector guidance2 calls for two particular metrics as follows:

• (FI.C0.0) - Exposure to sectors: The Taskforce recommends that financial institutions disclose a metric that represents the exposure to a defined set of sectors considered to have material nature-related dependencies and impacts

• (FI.C0.1) - Exposure to sensitive locations: The Taskforce recommends that financial institutions disclose a metric that represents their exposure to companies with assets and/or activities in sensitive locations.

Chart 4 shows that 35-47% of our holdings are currently exposed to a set of sectors considered

to have material nature-related dependencies and impacts, as described in the TNFD financial sector guidance2. A range is provided, noting the data gaps and resultant uncertainties in mapping our exposures to the defined sectors.

In relation to FI.C0.1, low data coverage within industry datasets creates difficulties in reaching portfolio conclusions. However, we have observed where data coverage exists, that exposure

to sensitive locations is not concentrated within certain sectors and could be a systemic challenge across all sectors, with many sizeable companies in differing locations flagging up operations in sensitive locations.

As such we will continue to engage on these topics,through our Nature Framework3, while also further embedding these topics into internal risk assessment considerations.

1. https://am.landg.com/asset/4a7df4/globalassets/lgim/_document-library/esg/lgims-deforestation-policy 0823-update_v0.pdf

2. https://tnfd.global/wp-content/uploads/2024/06/TNFD-Additional-guidance-for-financial-Institutions_v2 0.pdf?v=1728035523

3. https://blog.landg.com/asset/4a7dea/globalassets/lgim/_document-library/capabilities/nature-policy-document.pdf

‌Detailed metrics

As we continue to build our understanding of our climate and nature-related opportunities and risks, we are improving our quantification of our opportunities and risks in relation to both our investments and our operations. These metrics are sourced from organisations such

as the ISSB and NZAOA.

We focus on the primary metrics earlier in

this chapter. Table 7 provides a full asset owner metric dashboard as at 31 December 2025 and compares the current year metric with both the prior years and the base year, where available.

Table 7: Metrics dashboard

Base year (re-

Metric 1 Metric measurement presented) 2 Proprietary Asset Exposure Scope 3 Investments (Proprietary assets) - Financed Emissions

2024 (as

reported)

2024 (re-

presented) 3

2025

This provides useful context as to the trajectory of our emissions.

We endeavour to continue to build on these metrics over future iterations of our reporting and include additional metrics where possible particularly as we see methodologies

on nature-related metrics improve.

1. Metrics are based on the latest available data (one-year lag for listed equity and debt; two-year lag for sovereigns). The 2025 metrics generally reflects 2024 data.

2. Base year is 2019 for all metrics except for Electricity generation project finance emission intensity which is 2021.

3. Comparatives and baseline metrics have been re-presented. See page 35 for details.

4. Defined as renewable energy, green bonds and other technology, infrastructure and real estate climate solutions.

5. Direct private investments in fossil fuel-related projects and companies.

6. Measured as exposure to companies called out on the Urgewald Global Oil and Gas exit list: //gogel.org/ gogelexplained

7. NZAOA metrics are reported with a one-year lag. The 2025 figure reflects the end-2024 score.

8. Covering £0.9 trillion of listed bonds and equities.

9. ROTS: Revenue owned emissions weighted temperature score.

10. ECOTS: Enterprise value including cash emissions weighted temperature score.

Deloitte has provided independent limited assurance in accordance with the International Standard for Assurance Engagements 3000 ('ISAE 3000') and Assurance Engagements on Greenhouse Gas Statements ('ISAE 3410') over the selected metrics identified with an ▲. Deloitte's full unqualified limited assurance opinion, which includes details of the selected metrics assured, can be found on pages 57 and 58.

Investment portfolio economic GHG emissions intensity (EVIC) tCO2e / £m EVIC 793 51 50 51▲

Investment portfolio GHG emissions million tCO2e 6.63 4.9 4.8 5.5▲ Scope 3 Investments (Proprietary assets) - Physical Intensity Emissions

Scope 3 category 15(Asset Management division-wide) - financed emissions Scope 3 Category 13 - Physical Intensity Emissions Scope 3 Investments (Proprietary assets) - Temperature Portfolio Alignment