"Now more than ever, we believe that sustainable companies could also prove to be more resilient and beneficial than others over the long term."
— Katherine Collins, CFA, MTS, Head of Sustainable Investing2020 Impact report
The world is in the midst of the COVID-19 crisis. During this period, some things have changed in a meaningful and unwelcome way. Equity and credit markets have been unusually volatile. Our team meetings are held by phone and video as we work from home, instead of in our regular offices. Most sobering, the first numbers we analyze each morning reflect patients and infection rates and mortalities.
When times are difficult, both shortcomings and strengths are revealed. Individuals, communities, companies, and societies have the chance to rediscover their most valuable assets. We are reminded daily of the power of good health, of social connection, and of effective systems of care, on both micro and macro scales. Likewise, for our team, many of the investments in time, energy, and resources we've made these past years have become meaningful assets that we can lean on in these challenging times. For example, we have crafted several "mental models" like the idea map and materiality map featured in this report, which help us to structure our research priorities. We have created a series of analytical tools that help us to effectively and efficiently assess both financial and sustainability data. Perhaps most important, we have established a strong collaborative spirit within the dedicated sustainable investing team, as well as within the broader Putnam investment team. All of these tools have consistently helped us to identify risks and opportunities, complementing Putnam's formal risk management processes and our core fundamental research process.
More specifically, in recent weeks we have been able to use these strengths to quickly map potential systemic impacts of the COVID-19 crisis on well-being, social equity, employment, and access to care, which helped us to focus on key issues with a different perspective than many traditional investors have. With our broad network of research connections, we have been able to call upon insights from experts in governmental and non-profit organizations and from scientific research groups, which have helped us calibrate and compare potential long-term systemic effects versus the short-term volatility of the stock market. Perhaps most important, this broader research lens has helped to confirm what is unknown and unknowable at this stage of the crisis, helping us to assess risks of false confidence and false precision in a differentiated way.
All of these processes are also helping us to identify new opportunities for investment in three main types of companies: those that are providing solutions to some of our current challenges, those whose strong long-term prospects have been only temporarily dampened, and those whose businesses are well-positioned for an eventual recovery in a post-COVID-19 world. In all of these cases, our sustainability research links directly to our fundamental and valuation assessments, providing a "through line" to follow during these turbulent times.
This crisis has changed many things, and caused tremendous disruption and suffering worldwide. However, these circumstances also remind us of what is constant. Now more than ever, we believe that sustainable companies could also prove to be more resilient and beneficial than others over the long term. We believe that active management has the potential to add meaningful context and value to sustainable investing. We believe that current conditions will illuminate new opportunities and new solutions that contribute to a thriving society, planet, and economy.
We deeply value your partnership and trust, and continue to work hard and with highest integrity on your behalf, connecting our investing with the world it was meant to serve.
Katherine Collins, CFA, MTS
Head of Sustainable Investing
Read Katherine's letter | View the 2020 Impact Report | Download the report
What is sustainable investing?
Sustainable investing aims to identify companies that offer potential for strong financial returns while also demonstrating a commitment to sustainable business practices and positive impact. Sustainability is typically evaluated through analysis of environmental, social, and governance (ESG) policies, practices, and performance.
We believe an intense focus on sustainability has the potential to deliver returns to investors while also benefiting communities and the environment.
Katherine Collins,CFA, MTS, Head of Sustainable Investing
Environmental practices might include improving water quality or reducing carbon emissions. Social impact could involve fair labor practices and improvements in workplace equality and diversity. Governance issues relate to a company's leadership structures, board composition, and management incentives. As with any strategy investors should consider how these approaches might affect their overall investment plan.
We have resources for investor education (select a starting point):
ESG basics
What is sustainable investing?
Save this document for the fundamentals of what ESG is and is not.
Putnam's integrated approach
Investing in companies improving our world
Use this client-approved brochure to understand Putnam's investment philosophy and the funds we offer.
Putnam's impact report
Sustainability and impact report
Learn from this extensive survey how Putnam sustainable funds use ESG inputs, pursue impact, and develop new questions for future research.
Examples of sustainable business practices
Our funds
The Leaders Fund favors companies committed to sustainable practices. The Future Fund favors companies solving sustainability challenges.
Sustainable Leaders Fund (PNOYX)
Investing in companies with strong fundamentals linked to leadership in material sustainability issues.
Sustainable Future Fund (PMVYX)
Investing in companies with strong fundamentals offering solutions to sustainability challenges.
More about the funds
Learn about our strategy and examples and how we have impact.
Strategy and examples (PDF) How we have impact (PDF)
A research team with diverse skills
Our team has a unique, integrated process for understanding sustainability in the context of each company they research.
Katherine Collins, CFA, MTS, Head of Sustainable Investing
Experienced as an equity analyst, portfolio manager, and head of research at Fidelity, Katherine founded and led Honeybee Capital, a sustainable research firm, before joining Putnam in 2017.

Stephanie Dobson, Portfolio Manager
Stephanie brings together experience in interpreting and applying ESG data with skills in fundamental analysis and valuation of companies.

Shep Perkins, CFA, Chief Investment Officer, Equities
As CIO of Equities, Shep is responsible for providing strategic direction to Putnam's portfolio managers and equity analysts. He joined Putnam in 2011 and is Portfolio Manager of Putnam Sustainable Leaders Fund.

Alexander Rickson, CFA, Quantitative Analyst
Alex provides skills both in the interpretation of ESG data and its application to the processes of risk management and portfolio construction.

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