“Companies that address material ESG weaknesses reduce their operating risk, which can be a catalyst for unlocking shareholder value.” – ClearBridge Investments portfolio manager Grace Su.

Franklin Templeton and ClearBridge Investments have collaborated to introduce the FTGF ClearBridge Global Sustainability Improvers Fund, a new global value equity fund. This fund represents a significant move towards investing in companies that are actively enhancing their Environmental, Social, and Governance (ESG) profiles.

Rather than solely focusing on companies with well-established ESG practices, this innovative fund seeks to invest in entities that are in the early stages of improving their sustainability approaches. The objective is to unlock shareholder value and contribute to sustainable economic development. Franklin Templeton and ClearBridge Investments are known for providing diversified investment solutions tailored to their clients’ sustainability preferences and financial goals. (FINTECH GLOBAL)

The FTGF ClearBridge Global Sustainability Improvers Fund will concentrate on approximately 30-40 equity securities of undervalued companies that are actively working on enhancing their ESG practices. Each holding will be chosen with an ESG improvement thesis and sustainability targets, closely monitored for progress. Companies failing to meet these targets will be removed from the portfolio.

This fund is categorized as Article 8 under the EU’s Sustainable Finance Disclosure Regulation and will initially be available in select European countries.

Investing in companies committed to elevating their sustainability profiles can reduce operating risks and drive shareholder value and sustainable economic growth. This approach also allows investors to support the transition to a more sustainable economy while retaining the potential for excess returns.

Grace Su, a portfolio manager at ClearBridge Investments, said the fund would seek companies committed to sustainability improvement, even in sectors often overlooked by traditional ESG strategies.

According to portfolio manager Jean Yu, this strategy looked beyond “a narrow range of companies that are already displaying good ESG ratings,” and provided investors with the opportunity to participate in the transition to a more sustainable economy while aiming for excess returns.

Related Story:  Franklin Templeton Launches Sustainable Infra ETF

Photo by Daniel Öberg on Unsplash