Putnam Knows How To Invest In ESG The Authentic Way


After a difficult summer for many countries in the northern hemisphere, pressure continues to increase from governments, regulators and investors to reduce emissions and work to reduce the effects of climate change. Large corporations and financial institutions are moving away from high carbon industries and investments, but sustainability advocates and the financial sector are increasingly under pressure to push for change from within and engage with them. companies on their ESG practices, reports Popular science.

ESG investing allows investors to invest their money in a movement that strives to turn the tide on emissions and good business practices on all fronts. While there are very few standards in the United States on ESG measurements and reporting, the SEC is currently reviewing what companies report and considering responsibility for their reporting, and there is pressure within the investment industry. ESG to create a certain standardization for the industry to use.

Either way, ESG investments should not be limited to a single segment of a company’s practices, but should be integrated everywhere, believes Etienne Cadestin, founder and CEO of Longevity Partners, an environmental consulting firm in the United States. UK.

“ESG investments are considered a separate asset class, but it shouldn’t be,” says Cadestin. “ESG must be integrated into the modus operandi of each company… it is good practice. It’s about running a responsible business.

ESG practices can be increasingly linked to a company’s potential future performance, especially as companies that fail to meet public expectations and ESG reporting measures are held accountable by shareholders. Increasing the engagement of advisors and investment firms with companies on their ESG practices is increasingly becoming the norm in this environment of pressure and emphasis on sustainability.

“A true ESG program includes accessing your supply chain and scaling up each metric to ensure it meets ESG goals,” said Rebecca Greenan, senior vice president of finance and operations at the software company Crux OCM.

“ESG has the potential to touch every aspect and every department of a business. From the infrastructure they build to field operations, transportation, internal systems and corporate culture. When you can ask any employee of any rank within the company what the company is doing to implement its ESG strategy and they can come up with an answer, you have a true ESG program. Greenan explained.

Putnam engages with businesses and researches metrics

Putnam believes in sustainability and considers ESG practices to be an essential aspect of its approach to investing. Its active ESG-focused sustainability managers are a fundamental part of its work to align shareholders’ ESG values ​​with investment practices by engaging directly with the companies they invest in about their principles and practices. ESG.

The Putnam ETF on Sustainable Leaders (PLDR) invests in companies whose attention to ESG issues goes far beyond basic compliance and for which ESG is integral to their long-term success. These companies have transparent goals and provide consistent and measurable progress updates.

As a semi-transparent fund using the Fidelity model, PLDR does not disclose its current holdings on a daily basis. Instead, it publishes a tracking basket of previously disclosed holdings, liquid ETFs that reflect the portfolio’s investment strategy, and cash and cash equivalents. The monitoring portfolio is designed to closely monitor the overall performance of the actual fund portfolio, and reports on the actual portfolio are published monthly.

Assets at the end of August included Microsoft Corp. at 8.28%, Apple at 7.38%, and Amazon.com at 5.01%. The fund was heavily allocated to information technology stocks at 32.41%, followed by health care at 15.91% and consumer discretionary at 14.61%.

PLDR has an expense ratio of 0.59% and held 60 stakes at the end of August.

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