Case study: How LGT PB works with its clients and customers to encourage sustainable practices

LGT Private Banking (LGT PB), based in Vaduz (FL), provides wealth management services for private clients. Since its inception, LGT PB has expanded from a regional bank to an international private bank. LGT PB operates in Liechtenstein, Switzerland, Austria, Germany, the United Kingdom, Ireland, Hong Kong, Singapore, Bahrain, the United Arab Emirates, Thailand, India, Japan, and Australia. As at 31 December 2023, LGT PB had over 4800 employees worldwide. LGT PB is a signatory of the Principles for Responsible Banking (PRB) and is, accordingly, working with its clients and customers to encourage sustainable practices and enable sustainable economic activities.  Tweet This!

This case study is based on the 2023 Principles for Responsible Banking Report by LGT PB, prepared in relation to its implementation of the PRB, that can be found at this link. Through all case studies we aim to demonstrate what ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.

Which Principles for Responsible Banking have been addressed?

The Principles for Responsible Banking addressed in this case are:

• • • Principle 3: Clients and Customers
      • 3.1 Client engagement
    • Principle 4: Stakeholders
      • 4.1 Stakeholder identification and consultation

Stakeholder identification and consultation

Please describe which stakeholders (or groups/ types of stakeholders) you have identified, consulted, engaged, collaborated or partnered with for the purpose of implementing the Principles and improving your bank’s impacts. This should include a high-level overview of how your bank has identified relevant stakeholders, what issues were addressed/results achieved and how they fed into the action planning process.

LGT PB collaborates with key stakeholders to enhance its impact on sustainable development. For detailed information on LGT’s stakeholders and how LGT engages with them, please refer to Sustainability Information 2023, part I (ESRS).

The Foundation Board is regularly updated on stakeholder perspectives and interests in sustainability. Given its strategic importance, the Foundation Board receives information from various LGT sources, including updates on sustainability issues. Additionally, Foundation Board members actively participate in global sustainability-related conferences, such as the LGT Climate Conference, which allow direct interaction with clients.

The table below highlights examples of engagement with LGT PB’s primary stakeholder groups.

How did LGT PB work with its clients and customers to encourage sustainable practices and enable sustainable economic activities?

In its 2023 Principles for Responsible Banking Report LGT PB reports that it works with its clients and customers to encourage sustainable practices and enable sustainable economic activities as follows:

For LGT PB’s clients, partners, and other stakeholders, the LGT Code of Conduct emphasizes its commitment to conduct principles and compliance during business activities. LGT aims to maintain lasting, fair relationships with clients, business partners, authorities, and other key stakeholders. The LGT Code of Conduct mandates that employees treat clients fairly and respectfully, providing excellent products and services, along with the best possible advice and execution. For further details, please refer to the LGT Code of Conduct.

To create optimal investment solutions for its clients, LGT PB must understand their sustainability preferences. LGT PB adheres to regulatory requirements (e.g., EU SFDR, MiFID II), including assessing clients’ sustainability investment preferences, as outlined in LGT PB’s Sustainable Investing directive. For more information, please see section 5.3 “Policies and due diligence processes” in LGT PB’s 2023 Principles for Responsible Banking Report. LGT PB Europe has established four profiles to capture clients’ different sustainability preferences: Traditional, Basic, Enhanced, and Enhanced Plus, with the latter representing the highest sustainability standard. This categorization is applied in both portfolio management and advisory mandates, enabling LGT PB to develop and recommend investment solutions that align with clients’ investment goals and values.

LGT PB raises client awareness by publishing papers (e.g., on biodiversity) and organizing client events on sustainability (e.g., LGT PB’s Climate Conference, Sustainability4Entrepreneurs, webinars, and livestreaming). It also engages clients indirectly through relationship managers who receive dedicated training and re-profile clients based on their sustainability preferences.

Another key aspect of educating LGT PB’s clients is the LGT Sustainability Rating. Introduced in 2017, the LGT Sustainability Rating is calculated using the LGT ESG Cockpit, which incorporates data from six third-party ESG data providers. This rating informs clients about the sustainability quality of their investments and their contribution to the UN Sustainable Development Goals (SDGs). For clients in Europe and Asia, the LGT Sustainability Rating is integrated into the LGT SmartBanking platform. For more information on the LGT Sustainability Rating, please see the Sustainability Information 2023, Part II (TCFD), and LGT PB’s website. LGT PB informs clients about their portfolios’ emissions and provides information on the carbon footprint for clients with sustainability preferences, both for discretionary mandates and advised investments, in their statement of assets.

LGT PB’s sustainable investing experts ensure an increasing range of sustainable products and provide education on sustainable investing to client-facing staff and clients. To meet LGT PB’s sustainability goals outlined in the Sustainability Strategy 2030, the Sustainability Committee Clients & Investments coordinates and defines the sustainable investing strategy in collaboration with Sustainable Investing (SI) experts from various investment functions (e.g., portfolio management, portfolio advisory, and research) and local SI expert teams in different regions. LGT PB’s sustainability expertise guarantees an expanding range of credible sustainable products and education on sustainable investing topics.

LGT PB has global policies on controversial weapons and thermal coal, excluding investments in sectors identified as having high potential negative impacts. For more information, please see section 5.3 Policies and due diligence processes in LGT PB’s 2023 Principles for Responsible Banking Report.

UN Principles for Responsible Banking: Accelerating a positive global transition for people and the planet

With over 300 signatory banks representing almost half of the global banking industry, the Principles for Responsible Banking are the world’s foremost sustainable banking framework. Through these Principles, the banking community takes action to align core strategies, decision-making, lending and investment with the UN Sustainable Development Goals and international agreements such as the Paris Climate Agreement.

FBRH Principles for Responsible Banking (PRB) Assurance:

First class PRB assurance services: The result of solid, hands-on ESG/ Sustainability experience

• • • FBRH is a GRI Certified Training Partner (Global), IEMA Training Centre and a member of CPD.
    • FBRH builds trust. Over 200 reviews from top professionals from around the world demonstrate our ability to build strong, trusting business relationships.
    • FBRH possesses a unique skill set that combines ESG/sustainability certified training, experience in advisory services and report preparation, and ESG/sustainability report assurance.

The combination of all the above empowers FBRH to provide first class Principles for Responsible Banking (PRB) assurance services.

References:

This case study is based on published information by LGT PB, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:

https://www.lgt.com/resource/blob/216752/d636802af455548484cd9b097f218057/PRB_FY2023_en.pdf

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