Corporate Social Responsibility

Through its products and services Legal & General makes a significant and valuable contribution, not only to millions of individuals but to society as a whole. Our scale and the long term nature of our products, where customer relationships may last for decades, create a duty to behave responsibly and make sound decisions.

For Legal & General, Corporate Social Responsibility (CSR) involves the proper management of our relationships with customers, suppliers, shareholders and employees, along with the impact our business makes upon society and the environment. Adherence to strong CSR principles is not just part of good business, but essential to our long term success.

Customers

Our customers are central to our strategy. Legal & General currently supplies products or services to over five million customers. Our successful business model is founded upon providing them with good value products, quality service and a choice of ways to buy through a wide range of distribution channels. We support the Association of British Insurers’ (ABI) Customer Experience initiative and we are committed to applying the principles of the Financial Services Authority’s (FSA) Treating Customers Fairly initiative consistently throughout our business. Our approach goes beyond mere regulatory compliance. We know that it is important to our customers that Legal & General is a good corporate citizen. Research has indicated to us how our customers think we should behave and we know that they have growing expectations. We listen to them and seek to understand and respond to their concerns.

Employees

Investing in our 9,700 employees is another key element of our strategy. Our workforce is our most valuable asset, and we have implemented a wide range of policies to maximise opportunities for all employees. Our strong, open partnership with our union, Amicus, is a critical part of the Legal & General culture. Our employees have told us that they want to work for an ethical company which takes its responsibilities to society and the environment seriously. We regard responsible behaviour and good management of our Company’s social and environmental impact as an important factor in being able to recruit and retain a talented and motivated workforce.

Investment

As one of the UK’s leading institutional investors, with over £230bn under management on behalf of investors, policyholders and institutions, we have a unique opportunity – and responsibility – to exert a positive influence on the companies in which we invest. We expect companies in which we invest to adopt a responsible approach to social, environmental and ethical (SEE) issues. We support the ABI Disclosure Guidelines, which call on companies to disclose that the business and reputational risks arising from these areas are being assessed and managed, and we regularly discuss both SEE and governance issues with FTSE 350 companies.

With many of our pension fund clients showing interest in the influence we bring to bear on companies on SEE issues, being a responsible and active shareholder is an increasingly important element of our investment strategy.

Environment

Our sphere of responsibility also includes managing and minimising our direct impact on the environment, and we have a number of targets which support our efforts in this area. Current initiatives include working to reduce the proportion of office waste going to landfill, establishing staff recycling points for telephones and computers, and promoting car sharing, as well as ensuring that environmental factors are taken into account in the construction of new office buildings. With climate change moving higher up the public agenda a current priority is considering new strategies to further reduce our carbon dioxide emissions. In 2005, we switched to recycled photocopier paper across the Company, and in 2006 we extended this environmental commitment by switching to 55% recycled paper for all our marketing material. As a result of these moves, every year Legal & General expects to save approximately 11,000 trees and two million kilowatt hours of electricity.

Supply Chain

We purchase goods and services from over 3,000 suppliers. Suppliers make an important contribution to our business and we seek to establish mutually beneficial commercial relationships with them. We have a duty to treat suppliers in a fair and ethical manner, and we also seek to influence our suppliers to adopt responsible business practices. In 2006, for the first time, 100% of our key suppliers were compliant with our environmental requirements, and we expanded our assessment of suppliers to include social and ethical issues. Guidelines were also developed to influence key suppliers and support their supplier managers, which reflect Legal & General’s CSR standards.

Communities

Supporting the communities in which we operate, and where our employees and customers live and work, is important to us. Strategic and effective community involvement is an integral part of our business activity, and our programme involves developing partnerships with both national charities and those which are local to our main offices. We also operatea range of schemes designed to support and encourage employees in their community involvement, including a payroll giving scheme and sponsorship matching scheme whereby the Company matches employees’ fundraising for charity. We also run a Young Excellence Scheme through which we support young people who have shown exceptional sporting, musical or creative talent. During 2006, Legal & General’s total community contribution exceeded £2.5m.

Governance

Legal & General’s CSR Committee meets four times a year, and is responsible for developing the Company’s strategy, overseeing its implementation and monitoring performance. It is chaired by our Group Chief Executive, Tim Breedon, and includes a representative from Amicus. The Group Board reviews the minutes of the Committee and conducts an annual review of the Committee, policy and programme. The Board also receives an annual presentation on the CSR programme and specific elements of our CSR programme are discussed as appropriate throughout the year.

The CSR Guiding Principles described in our CSR Report set the tone for the work of the Committee and its members. With reference to these Principles, the CSR Committee undertakes an annual review of social, environmental and ethical risks and opportunities. Responsibility for this review, for assessing likelihood and impact, and for managing the risks and opportunities, is delegated to the relevant Committee member, their management team or the appropriate sub-committee. Targets are established where appropriate.

The CSR Report is verified by Legal & General Group Internal Audit. The verification statement detailing the scope of work carried out, and the conclusions reached, can be found at the end of the 2006 CSR Report.

Feedback on Legal & General’s CSR performance is obtained through stakeholder engagement and external rating agency surveys.

In summary, we recognise that CSR is a‘need to have’ rather than a ‘nice to have’, and that responsible behaviour brings value to our business. Key challenges for 2007 include exploring how we can embed responsible behaviour even deeper into our business and develop new ways to communicate our activities with our many stakeholders. This will include a review of our CSR reporting structure and, as always, we value your views and suggestions.

For further information please visit our CSR Report 2006. (www.legalandgeneralgroup.com/csr)