Individual Investor Contact Us Careers United Kingdom Our Company Products Fund Views Insights Resources Search SUSTAINABLE INVESTING Focusing on stewardship and sustainability to create long-term value for clients The investment choices we make have a profound effect on the world around us. At Franklin Templeton, we believe sustainable investing and a focus on environmental, social and governance (ESG) analysis can help us deliver better outcomes for our clients. What’s more, being stewards of our clients’ capital gives us the opportunity to effect real change. Play Video Identifying the ESG indicators that provide material insights not yet captured by the market can allow us to target investments we believe are best positioned to deliver sustainable returns for our clients. Jenny Johnson President and Chief Executive Officer Creating long-term sustainable value Diversity of thinking across our teams Aligning with client objectives Insights and documents Creating long-term sustainable value Sustainable investing can be a vital tool for delivering long-term value to our clients. At Franklin Templeton, we believe integration of ESG considerations in the investment process can enable stronger investment performance and better client outcomes. As the ESG landscape continues its rapid transformation, we have a strong firm-wide commitment to be responsible stewards of clients’ assets and aspire to be a global leader in stewardship and sustainability. Here’s how we think about sustainability: There is an increasing body of data that points to sustainability as a driver of long-term value creation and portfolio performance. Part of successful investing is reinforcing sustainable social, environment and governance structures, which create the conditions for issuers to succeed. To drive the change required for issuers to evolve, investment managers and other shareholders must provide strong engagement and demonstrate active ownership. Diversity of thinking across our investment teams As the ESG landscape continues to rapidly adjust, we must maintain our efforts to be ahead of this change, and where possible, help influence it. David Sheasby Head of Stewardship and ESG (Martin Currie) Edinburgh Our investment teams are incredibly diverse, as are our clients’ sustainability preferences. Our goal is to find innovative solutions that meet our clients’ needs. We offer the best of both worlds to investors: the strength of our global organization and boutique expertise from our Specialist Investment Managers (SIMs). Our Stewardship and Sustainability Council brings together our 19 SIMs and represents an unparalleled ability to synthesize and synchronize the breadth of insights across a range of topics. The Council reflects the diversity and depth of our sustainable investing strategies spanning the major asset classes: equity, fixed income, alternatives and multi-asset. Our SIMs independently evaluate ESG factors from multiple angles, allowing us to provide more innovative sustainability investment solutions to our clients. Industry collaboration Franklin Templeton, and our Specialist Investment Managers, collaborate with organizations that promote and establish best practices for incorporating sustainability at issuer and portfolio level. Below we show some of the initiatives we are active in, some independently, and others more broadly across the wider organization. Sustainable investing is the future of our industry. We need to look ahead to understand the real-world impacts of our investment decisions. David Zahn Head of Sustainable Investment & Europe, Fixed Income London PRI signatories at Franklin Templeton Franklin Resources is a signatory to the Principles for Responsible Investment (PRI), the leading global investor network that champions responsible investment. In addition, our independent specialist investment managers are PRI signatories in their own right, with ClearBridge Investments as the longest serving signatory since 2008. In 2020, several of our specialist investment managers received high grades of A and A+ on key modules of the PRI assessment, ranking ahead of the peer median score in all categories. Diverse Range of Investment Capabilities We offer a range of ESG focused investment solutions and vehicles to suit all client needs. We place these in 5 broad categories, reflecting the different motivations and preferences of investors. ESG Integration Portfolios that acknowledge the benefit of considering ESG factors ESG tilted Portfolios with better characteristics than the broader market Values driven Portfolios with social, religious, or environmental screens Thematic Portfolios aligned to specific environments or social trends, sectors, or industries Impact Portfolios that measure progress against specific environmental and social goals alongside investment returns INSIGHTS AND DOCUMENTS Read about the sustainable investment approaches of our Specialist Investment Managers. Global citizens Global citizenship is how we behave as an organization and we are committed to operating at the highest standards of governance and transparency. Embedded in our corporate values is responsible citizenship, which includes ESG. This focus helps to both protect our clients and positively positions our firm for the future. Read more here ESG Resources and Policies Please note that the policy documents shown below refer to Franklin Resources. Equivalent policies for other Specialist Investment Organizations can be found on their respective websites. Franklin Templeton Stewardship Policy Franklin Templeton Stewardship Report Franklin Templeton PRI Transparency Report Franklin Templeton Fund Management Limited Voting Policy Franklin Templeton Investment Management Proxy Voting Policy Franklin Templeton Controversial Weapons Policy Sustainable Investing Principles and Policies FTIML Annual Voting Report 2020 FTFML Annual Voting Report 2020 Further reading Clarion Partners Annual ESG Report 2020–2021 ClearBridge Investments Impact Report Martin Currie Stewardship Report Franklin Resources Stewardship Report Corporate Social Responsibility Report WHAT ARE THE RISKS? All investments involve risks, including possible loss of principal. The value of investments can go down as well as up, and investors may not get back the full amount invested. The positioning of a specific portfolio may differ from the information presented herein due to various factors, including, but not limited to, allocations from the core portfolio and specific investment objectives, guidelines, strategy and restrictions of a portfolio. There is no assurance any forecast, projection or estimate will be realized. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as the prices of bonds in an investment portfolio adjust to a rise in interest rates, the value of the portfolio may decline. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in emerging markets, of which frontier markets are a subset, involve heightened risks related to the same factors, in addition to those associated with these markets' smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Because these frameworks are typically even less developed in frontier markets, as well as various factors including the increased potential for extreme price volatility, illiquidity, trade barriers and exchange controls, the risks associated with emerging markets are magnified in frontier markets. Derivatives, including currency management strategies, involve costs and can create economic leverage in a portfolio which may result in significant volatility and cause the portfolio to participate in losses (as well as enable gains) on an amount that exceeds the portfolio's initial investment. A strategy may not achieve the anticipated benefits, and may realize losses, when a counterparty fails to perform as promised. Currency rates may fluctuate significantly over short periods of time and can reduce returns. Investing in the natural resources sector involves special risks, including increased susceptibility to adverse economic and regulatory developments affecting the sector --prices of such securities can be volatile, particularly over the short term. Impact investing and/or Environmental, Social and Governance (ESG) managers may take into consideration factors beyond traditional financial information to select securities, which could result in relative investment performance deviating from other strategies or broad market benchmarks, depending on whether such sectors or investments are in or out of favor in the market. Further, ESG strategies may rely on certain values-based criteria to eliminate exposures found in similar strategies or broad market benchmarks, which could also result in relative investment performance deviating. IMPORTANT LEGAL INFORMATION This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. It does not constitute legal or tax advice. The views expressed are those of the investment manager and the comments, opinions and analyses are rendered as at publication date and may change without notice. The information provided in this material is not intended as a complete analysis of every material fact regarding any country, region or market. All investments involve risks, including possible loss of principal. Data from third party sources may have been used in the preparation of this material and Franklin Templeton ("FT") has not independently verified, validated or audited such data. FT accepts no liability whatsoever for any loss arising from use of this information and reliance upon the comments opinions and analyses in the material is at the sole discretion of the user. Products, services and information may not be available in all jurisdictions and are offered outside the U.S. by other FT affiliates and/or their distributors as local laws and regulation permits. Please consult your own financial professional or Franklin Templeton institutional contact for further information on availability of products and services in your jurisdiction. 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This document has not been reviewed by the Securities and Futures Commission of Hong Kong. / Italy: Issued by Franklin Templeton International Services S.à.r.l.—Italian Branch, Corso Italia, 1—Milan, 20122, Italy / Japan: Issued by Franklin Templeton Investments Japan Limited / Korea: Issued by Franklin Templeton Investment Trust Management Co., Ltd., 3rd fl., CCMM Building, 12 Youido-Dong, Youngdungpo-Gu, Seoul, Korea 150-968 / Luxembourg/Benelux: Issued by Franklin Templeton International Services S.à r.l.—Supervised by the Commission de Surveillance du Secteur Financier–8A, rue Albert Borschette, L-1246 Luxembourg, Tel +352-46 66 67-1, Fax +352-46 66 76 / Malaysia: Issued by Franklin Templeton Asset Management (Malaysia) Sdn. Bhd. & Franklin Templeton GSC Asset Management Sdn. Bhd. This document has not been reviewed by Securities Commission Malaysia. / Poland: Issued by Templeton Asset Management (Poland) TFI S.A.; Rondo ONZ 1; 00-124 Warsaw / Romania: Franklin Templeton International Services S.À R.L. Luxembourg, Bucharest Branch, at 78-80 Buzesti Str, Premium Point, 8th Floor, Bucharest 1, 011017, Romania. Registered with Romania Financial Supervisory Authority under no. PJM07.1AFIASMDLUX0037/10 March 2016 and authorized and regulated in Luxembourg by Commission de Surveillance du Secture Financiere. Telephone: + 40 21 200 9600 / Singapore: Issued by Templeton Asset Management Ltd. Registration No. (UEN) 199205211E, and Legg Mason Asset Management Singapore Pte. Limited, Registration Number (UEN) 200007942R. Legg Mason Asset Management Singapore Pte. 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Authorized and regulated in the United Kingdom by the Financial Conduct Authority / Nordic regions: Issued by Franklin Templeton International Services S.à r.l., Contact details: Franklin Templeton International Services S.à r.l., Swedish Branch, filial, Nybrokajen 5, SE-111 48, Stockholm, Sweden. Tel +46 (0)8 545 012 30, nordicinfo@franklintempleton.com, authorised in the Luxembourg by the Commission de Surveillance du Secteur Financier to conduct certain financial activities in Denmark, in Sweden, in Norway, in Iceland and in Finland. Franklin Templeton International Services S.à r.l., Swedish Branch, filial conducts activities under supervision of Finansinspektionen in Sweden / Offshore Americas: In the U.S., this publication is made available only to financial intermediaries by Templeton/Franklin Investment Services, 100 Fountain Parkway, St. Petersburg, Florida 33716. Tel (800) 239-3894 (USA Toll-Free), (877) 389-0076 (Canada Toll-Free), and Fax (727) 299-8736. 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