CONTRIBUTORS
David Zahn, CFA, FRM
Head of European Fixed Income,
Franklin Templeton Fixed Income
Executive Summary
In today’s rapidly evolving financial landscape, the integration of sustainability into investment decision-making is no longer optional—it is imperative. The Franklin Templeton Fixed Income (FTFI) Impact Report offers a comprehensive view of how our sustainable investment strategy translates into measurable financial returns as well as tangible benefits for society and the planet. This report highlights our progress and reinforces our commitment to transparent, accountable and continually improving impact reporting.
A key theme in this year’s report is the importance of holistic impact. We recognize that climate, biodiversity and social well-being are deeply interconnected. Improvements in one area should not come at the expense of another. Within this comprehensive perspective, innovation becomes essential: by selecting bonds financing forward-thinking solutions and novel technologies, we amplify both environmental and social outcomes. The presented case studies vividly illustrate these principles in action. These real-world examples demonstrate that our investments not only address current sustainability challenges but also remain resilient and at the forefront of sustainable finance.
The backbone of our reporting is the proprietary Sustainable Impact Database (SID), which enables us to track, validate and aggregate impact data across nearly 550 Green, Social and Sustainability (GSS) bonds we classify as sustainable investment. Each record is subject to quality checks to verify accuracy, consistency, and compliance with the standards defined by the European Union’s Sustainable Finance Disclosure Regulation (SFDR). Our impact metrics—ranging from CO₂ emissions avoided and renewable energy produced to health care access and job creation—provide a precise reflection of our contribution.
In 2024, our investments helped avoid over 2.4 million tonnes of CO₂ emissions, produced nearly 2 million MWh of renewable energy, and supported over 649 thousand individuals through environmental and social projects. These outcomes are not just numbers; they represent lives improved, ecosystems protected and communities empowered. Our impact reporting framework ensures that these metrics are standardized, comparable and aligned with the International Capital Market Association (ICMA) Principles, of which we are proud members.
Beyond metrics, our strategy emphasizes engagement. In 2024 alone, we conducted nearly 260 impact-related engagements, primarily in the financial and utility sectors. These interactions—ranging from email exchanges to workshops—allow us to educate issuers on best practices, improve data quality and ensure that the bonds we invest in deliver on their promises.
We also acknowledge the challenges inherent in impact reporting. That is why we continuously refine our methodology, engage with industry peers and contribute to thought leadership in sustainable finance. As we look ahead, we remain focused on enhancing the granularity of our impact assessments, refining our evaluation frameworks and expanding our coverage to capture all emerging impact areas.
We invite you to view this report not just as a compilation of metrics but as a reflection of our values and vision. At FTFI, we believe that a truly impactful investment strategy must be holistic—one that considers the full spectrum of environmental and social outcomes, engages stakeholders meaningfully, and adapts to the complexities of a changing world. Only by embracing this comprehensive approach can we unlock the full potential of sustainable finance and deliver lasting value to investors and society alike.
Source: FTFI Sustainable Impact Database as of December 31, 2024.