Our greatest priority is to extend Putnam’s long-standing strength in fundamental research to produce deeper insights in context specific, forward-looking ESG, sustainability, and impact analysis.
As noted in Putnam’s ESG policy, we believe that certain environmental, social, and governance factors are relevant and material to long-term business fundamentals, and therefore important to all investors.2 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 maps,” which were inspired and guided by the materiality mapping of the Sustainable Accounting Standards Board (SASB).3 We believe that this kind of integrated, long-term research has the potential to mitigate risk and to generate alpha. We also utilize data from several third-party resources, including MSCI and Sustainalytics, as part of our broader research process.
Our belief in the power of context-specific analysis can be seen in the map below, which shows that we have different and complementary frameworks for various sectors and issues in equity research. We believe that this kind of forward-looking and customized research focus is a key contributor to long-term investment results.
Sources: Putnam and SASB.