Franklin Templeton said today it welcomes the new EU Sustainable Finance Disclosure Regulation (SFDR), which the company describes as 'an important step in driving forward transparency and authenticity in how investors approach ESG and sustainability.'
Julian Ide, head of EMEA distribution, Franklin Templeton, commented: "We believe the implementation of SFDR will be a game changer and will transform the playing field for the financial services industry, enabling more transparency for clients as well as providing more sustainable investment choices for investors. At Franklin Templeton, we aim to move beyond just complying with the regulation, we want to become sustainability leaders in the industry."
With the new regulation coming into effect today, the company also announced that its phased approach to implementing SFDR has resulted in a robust level of preparedness for its high conviction ESG funds.
We believe the implementation of SFDR will be a game changer and will transform the playing field for the financial services industry, enabling more transparency for clients as well as providing more sustainable investment choices for investors."
Initially, the firm has concentrated its efforts on Phase I, which focused on meeting level 1 requirements of SFDR by 10 March 2021. As result, Franklin Templeton announced:
- Almost all Franklin Templeton and Legg Mason funds (circa 160), and separate and sub-advisory accounts (21) within the scope of SFDR consider sustainability risks to be relevant, per Article 6 of the Regulation, and integrate consideration of these risks into the investment process.
- In addition, Franklin Templeton will offer 24 strategies, which have been disclosed as compliant with Article 8 and 5 strategies disclosed as compliant with Article 9 for its clients. Both categories are subject to higher standards of disclosure. Under the new Regulation, Article 8 products are classified as those, which have binding environmental and social characteristics, whilst Article 9 products have a specific sustainable investment objective.
- Franklin Templeton's Article 8 and 9 offerings represent a list of high conviction ESG funds that have been prioritised for Phase I of SFDR implementation based on the integrity of the funds' ESG investment process.
Ide added: "Following the acquisition of Legg Mason, we are very fortunate to be able to offer a diversity of ESG approaches from across our autonomous specialist investment managers including Brandywine Global, ClearBridge Investments and Martin Currie."
In accordance with its strong commitment to ESG and sustainability, Franklin Templeton said that in Phase II, it is actively working towards broadening the list of funds disclosed as Article 8 and 9 compliant.
"As a global investment manager with a rich history of over 70 years of stewarding clients' assets, we are firmly committed to offering a diversified range of ESG investment solutions that meet the highest standards of governance and transparency," Ide concluded.