Franklin Templeton Investments
Franklin Resources, Inc. is a global investment management organization with subsidiaries operating as Franklin Templeton. Franklin Templeton joined the Net Zero Asset Managers Initiative in July 2021 and made its Initial Target Disclosure in November 2022.
Percentage of assets covered by the Net Zero Asset Managers Commitment Statement
4.620% of total AUM (USD $27.2 billion)
Information on interim target(s) covering the proportion of assets to be managed in line with net zero
Baseline(s):
Portfolio coverage baseline
We are currently developing our methodology and assessment tools to asses our investment portfolio constituents on their alignment, in a manner that is fully aligned with the NZIF, and utilises the hierarchy of data sources. We expect to provide this
baseline performance in our next target update.
Portfolio decarbonisation reference baseline
At Franklin Templeton, we have taken an approach that allows each of our independent specialist investment managers to take a target setting approach that is most suitable for their asset class, strategy, and data availability. This means we are using multiple intensity measures that cannot be aggregated to the enterprise level. This approach focuses on accountability and implementation.
Engagement threshold baseline
We are currently developing our methodology for assessing assets as Net Zero or Aligned and will commit to disclosing this information in the next update of our targets.
Target(s):
Portfolio coverage target
Across our investment groups, the minimum target for asset level alignment is 50% of issuers to be considered aligning or better by 2030. Within this approach, one of our investments groups has set a target to have 100% of issuers meet the criteria of
aligning by 2030. All investment groups have set a target that is aligned with 100% of issuers meeting the category aligning or better by 2040.
Portfolio decarbonisation reference target
The minimum 2030 portfolio emissions intensity reduction target submitted by our investment groups is 50%, with some setting more ambitious targets.
Engagement threshold target
Across our investment teams, each target meets the criteria of 70% of financed emissions in material sectors, and the wider portfolio, being considered Net Zero or aligned, or being subject to direct or collective engagement by 2030. Some investments have gone beyond this, to increase the level to 90% by 2030.
GHG scopes included:
All investment teams include scope 1 and 2 emissions for all assets committed, with plans to phase in scope 3 emissions as data quality and availability improves, per the PAII Net Zero Investment Framework guidance.
Methodology:
Net Zero Investment Framework
Scenario(s):
The underlying scenario varies by investment team as they have selected the most appropriate for their assets. The IPCC special report on global warming of 1.5°C pathways (P1,P2,P3 & P4) and the IEA Net Zero by 2050 scenario are the scenarios we have utilised in this approach.
Additional information
Proportion of AUM committed:
Across our investment teams we have committed funds that are deemed to be managed in line with Net Zero and have relevant disclosures and documentation in place. Other funds may require further work to commit them to be managed in line with Net Zero, such as amendments to fund disclosures or documentation or fund board consent. We are working to improve the level of assets committed and expect the level of committed assets to continue to rise, tending towards 100% as appropriate; in line with client investment preferences and our fiduciary duties.
Policy on coal and other fossil fuel investments:
We do not currently have a policy on coal and fossil fuel investments at the enterprise level, however individual investment groups have set policies for certain products or client mandates, in line with their investment preferences.
Further information:
Franklin Templeton in-scope AUM $589bn 01/06/2022