ESG integration in our investment group

ESG in investments

Putnam incorporates consideration of ESG elements in our investment research processes. We consider ESG analysis as additive and complementary to the fundamental understanding that is at the center of our investment philosophy.

Examples of relevant and material ESG issues that we research might include carbon intensity, water use, or plans to reduce waste; employee well-being or commitments to workplace equality and diversity; and board independence or alignment of management incentives with the company's strategic sustainability objectives.

ESG integration within equities

Putnam's Sustainable Equity team collaborates with portfolio managers and analysts on ESG integration by assessing the fundamental relevance of ESG issues at a security level and the potential for alpha generation and risk mitigation at a portfolio level.

We consider it important that the Sustainable Equity team is part of the Equities team, not separate from it.

Given Putnam's investment-centric philosophy, our ESG integration and engagement is guided by our internally developed materiality maps. They are inspired and guided by the work of the Sustainability Accounting Standards Board (SASB, newly consolidated under the International Financial Reporting Standards (IFRS) Foundation and linked to the developing International Sustainability Standards Board (ISSB)).

Our equity materiality map shows that our research focuses on context-relevant issues for different types of businesses. We believe this kind of tailored and forward-looking research focus can be a key contributor to long-term investment results.

Putnam equity materiality map

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 strategic 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 12/31/23. For illustrative purposes only.
Source: Putnam Investments, adapted from SASB Materiality Map.

You can read about our investment thesis for other companies in our Sustainability and impact report.

Also, learn more at our Sustainable investing page.