Group Chief Executive's Review

Our Approach to Being a Responsible Business

At Legal & General we have, over many years, seen our commitment to a broad range of stakeholders as an important part of operating a sustainable, successful business. 2008 was a year in which we succeeded in aligning our Corporate Social Responsibility philosophy and activities even more closely with our Company objectives, both today and for the future.

Environment

The foundations of Legal & General’s own environmental policy are based on the belief that reducing our emissions, rather than just offsetting, will enable us to make the greatest positive difference to the environment. For example, our employees reduced our direct CO₂ Emissions by driving over 1.2 million fewer business miles in 2008 compared with 2007.

Good environmental management practice is to become still more important in 2009 as a result of our Carbon Reduction Commitments.

This year we have taken the decision not to print our CSR report in line with our 2009 paper reduction target.

Customers

Customers are at the heart of our business: delivering a positive customer experience is one of our Company’s five strategic imperatives. So we participate in the ABI’s Customer programme and strongly support the FSA’s Treating Customers Fairly initiative. During the year, we broadened the scope of our Business Ethics Working Group. As our business becomes more international, we need to adopt new standards which are appropriate to a global market. For example, we have integrated the United Nations Declaration for Human Rights and Bribery and Corruption Principles into our business policies.

Employees

Against an increasingly tough economic background, I am delighted that our employees continue to get involved in grass roots projects supporting their local communities and the Company is able to help them do this. During the year, we facilitated over 500 volunteering days and contributed to our employees’ own charitable activities through simple schemes, such as Give as You Earn, and matching the fundraising efforts of employees up to a maximum £750 per year.

Importantly, we have increasingly been able to apply our business expertise and the very considerable goodwill of our employees to contribute towards the things that matter most to our customers, to the communities in which we are a major employer, and to our staff.

We also increasingly see an opportunity to improve two-way communication and understanding between ourselves and organisations in the not-for-profit sector. This will help improve understanding of the latest thinking on issues important to our business and to society as a whole, such as longevity, climate change and the development of a more effective savings culture.

It is our view that events in financial markets during 2008 have underscored the importance of doing business in a sustainable, responsible way, and of taking a long term view.

We believe that this approach is entirely compatible with, and indeed supportive of, the generation of value for our shareholders. We are not alone in this opinion. Shareholders, customers and employees increasingly evaluate companies using non-financial measures to complement more traditional short term performance metrics. They are right to do so.

Tim Breedon

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