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Strategy Overview

The strategy aims to achieve its climate change mitigation and adaptation objective by investing in companies that reduce emissions, improve resource efficiency, and limit the physical consequences of climate change to align the portfolio carbon footprint with the landmark Paris Agreement adopted in December 2015. Companies that may benefit financially and competitively from the transition to a global low-carbon economy can be grouped into the following three broad categories:

  • Solutions. Companies with majority of revenues from products and services that reduce emissions, improve resource efficiency, and/or protect against the physical consequences of climate change.
  • Transitioning. Companies with moderate to high emissions or resource intensity that are transitioning to solutions or resilient.
  • Resilient. Companies with relatively low carbon and resource intensity and solutions offerings representing <50% of revenues.

A proprietary climate screening process is used to identify and select high quality, growth companies that fit within its climate change criteria.

The strategy offers a compelling investment opportunity in a segment of the market with secular demand growth. A proprietary ESG screening process helps calibrate risks and opportunities to build a concentrated portfolio of 40-50 names with a 5-year holding period diversified across all countries, regions and industries.

Companies providing solutions to mitigate and adapt to climate change and making their business resilient to its consequences should have a long-term competitive advantage.

Focus on companies whose long-term prospects are not accurately captured in current valuations provides upside opportunities while attempting to limit downside risk resulting from excessive optimism. ESG integration is embedded in the process.

Engage with management and cast votes to influence emission reductions, efficient resource use and strong climate change oversight and transparency.

Search for carbon reduction opportunities beyond environmental sectors for broad impact and optimal risk/reward outcome.

Our Philosophy

Our investment philosophy combines Franklin Templeton’s fundamental value investing with robust, in-house climate change research to capitalize on investment opportunities, reduce risk and influence positive outcomes related to climate change. We use a disciplined, repeatable process to conduct in-depth analysis and select equity securities which we believe are undervalued, based on such factors as their expected long-term earnings and the value of the business assets.

Investment Process

Deep fundamental research and business analysis is the heart of our investment process. The team evaluates companies from multiple angles and assesses material ESG factors, to identify companies that meet their strict growth, quality and valuation criteria.

 

This is a general depiction of the investment team's methodology and may not reflect the exact investment process for any particular strategy.

Management Team

The Templeton Sustainability team manages the Templeton Global Climate Change strategy and is responsible for climate change portfolio management, establishing the climate change investable universe and searching for potential value opportunities. As part of the broader 30+ member Templeton Global Equity Group, the team works closely with industry analysts across regional, large cap and small cap teams to find the best opportunities. New ideas are assigned according to industry, market cap and regional coverage, with the Global Climate Change Team often working jointly on research to share their thematic expertise. Importantly, this structure provides the strategy with deep coverage critical to identifying emerging solutions and companies transitioning their business to be more resilient.

Craig Cameron, CFA

Senior Vice President, Portfolio Manager, Research Analyst

Tina M. Sadler, CFA

Executive Vice President, Portfolio Manager, Research Analyst

Lauran Halpin

Portfolio Manager, Head of Impact Equities

Resources and Related Strategies

Templeton Emerging Markets Sustainability
Templeton International Climate Change

Contact Us

Please connect with us to learn more about our investment capabilities and how we can help meet your investing needs.

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. All investments involve risks, including possible loss of principal. There is no guarantee that a strategy will meet its objective. Performance may also be affected by currency fluctuations. Reduced liquidity may have a negative impact on the price of the assets. Currency fluctuations may affect the value of overseas investments. Where a strategy invests in emerging markets, the risks can be greater than in developed markets. Where a strategy invests in derivative instruments, this entails specific risks that may increase the risk profile of the strategy. Where a strategy invests in a specific sector or geographical area, the returns may be more volatile than a more diversified strategy.

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