Franklin Templeton targets ESG improvers in fixed income fund

Brandywine Global Multi-Sector Impact Fund engages high emitters

Franklin Templeton has launched a global impact fund focused on engaging fixed income issuers and investing in improvers.

The Brandywine Global Multi-Sector Impact Fund is a sub-fund of the Legg Mason Global Funds, an Irish-domiciled fund range. This new impact fund is registered for distribution in the UK, Ireland, Germany and Italy. It will also be registered in Switzerland in the coming weeks.

The fund seeks to engage with high emitters rather than excluding them. “As active fixed income investors, we can play a significant role in helping companies adopt more sustainable practices,” said associate portfolio William Vaughan.  

“Rather than excluding whole industries from our investment universe, this fund aims to provide capital and expert guidance to those issuers most in need of improvement, in areas like biodiversity preservation, workforce equity and safety, and renewable power.”

In order to invest in companies improving their ESG credentials, the team has set key performance indicators to target and measure their progress. They will divest if these are not met or if an issuer has not implemented a policy to address existing sustainability risk.

Jaspal Sagger, head of global product strategy at Franklin Templeton, commented: “While we have seen tremendous product development activity since SFDR came into force last year, innovation has not addressed the full range of client sustainability preferences and motives, particularly in fixed income.”