Investment relevance

Our ESG and sustainable equity research is guided by our internally developed materiality map, which shows the degree of relevance of ESG issues across industry sectors.

We believe that certain ESG issues are relevant and material to long-term business fundamentals, and for that reason, important to all investors. Investment-relevant issues vary by sector, geography, asset class, and company context. Therefore, fundamental research that is tailored to different settings has potential to add meaningful value.

Given this philosophy, our ongoing ESG and sustainability research is guided by our internally developed materiality map, which is inspired by the work of the Sustainable Accounting Standards Board (SASB).

The materiality map shows that in equity research we focus on context-relevant issues for different types of businesses. We believe that this kind of tailored and forward-looking research focus has the potential to mitigate risk and to generate alpha, and be a key contributor to long-term investment results.

Most relevant
Often relevant
Less relevant
Consumer Health Care Financials Tech (hardware) Comm and Tech (software) Industrials Materials and Energy Utilities Real Estate
Board structure and composition
Management incentives, ownership, and comp alignment
Systemic risk management and leadership
Corporate purpose, culture, and mission alignment
Diversity, equity, and inclusion
Employee well-being and development
Product impact and customer well-being
Supply and distribution network management
Privacy, data security, and data use
Marketing and selling practices
Pricing philosophy and access
Climate change mitigation and adaptation
Physical climate change risk
Greenhouse gas (GHG) emissions
Energy intensity and renewable energy use
Materials sourcing, intensity, and lifecycle management
Water intensity and stress
Biodiversity and ecosystems impact

As of 8/31/23. For illustrative purposes only.
Source: Putnam Investments, adapted from SASB Materiality Map.

Seeking corporate leaders in relevant areas

Our investment thesis is that companies exhibiting leadership in the sustainability issues that are financially material to their businesses also often demonstrate potential for strong long-term financial performance.

In our research process, we seek to identify corporate leadership by considering four key dimensions:



Companies with focus that is informed by thoughtful analysis of materiality and long-term business relevance

Creativity and proactivity

Creativity and proactivity:

Companies whose actions go beyond compliance or box-checking activity to demonstrate heightened commitment and potential benefit



Companies with goals that are specific, and produce candid and consistent reports of progress



Companies showing benefits that are meaningful both within the firm and beyond its corporate borders