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CONTRIBUTORS

David Zahn, CFA, FRM

Head of European Fixed Income,
Franklin Templeton Fixed Income

This year’s report reflects the Fixed Income Sustainability Team’s disciplined engagement approach, proprietary ESG insights, and commitment to integrating environmental and social considerations into investment decision making.

Executive Summary

Sustainable investing continues to evolve rapidly, with fixed income investors playing an increasingly influential role in driving market-wide progress. This report presents a comprehensive overview of Franklin Templeton Fixed Income’s 2025 engagement activities, highlighting how systematic dialogue with corporate, sovereign and supranational issuers informs our investment decisions and supports more resilient, transparent and sustainable capital markets. Our engagement efforts reflect a deliberate shift toward more targeted, higher-quality conversations that strengthen our understanding of material ESG risks and opportunities.

Across regions and sectors, we observed growing momentum on key sustainability themes, including decarbonisation pathways, nature conservation, social inclusion and improved sustainable disclosure. These thematic engagements enabled us to assess issuers’ strategic alignment with global climate objectives, evaluate governance practices and identify areas where enhanced reporting or operational progress is still required. Throughout the year, we also deepened our holistic approach, emphasising the interconnected nature of environmental and social outcomes and the importance of robust decision data for investors.

As sustainable finance enters a new phase defined by higher expectations, greater scrutiny and accelerating regulatory change, the message from our engagements is clear: credible progress demands transparency, ambition and consistent execution. By integrating these insights, we aim to be better positioned manage risk, identify resilient investment opportunities and capture long-term value in a rapidly transforming global economy.

Important Legal Information

This document is for information only and does not constitute investment advice or a recommendation and was prepared without regard to the specific objectives, financial situation or needs of any particular person who may receive it. This document may not be reproduced, distributed or published without prior written permission from Franklin Templeton.

Any research and analysis contained in this document has been procured by Franklin Templeton for its own purposes and may be acted upon in that connection and, as such, is provided to you incidentally. Although information has been obtained from sources that Franklin Templeton believes to be reliable, no guarantee can be given as to its accuracy and such information may be incomplete or condensed and may be subject to change at any time without notice. Any views expressed are the views of the fund manager as of the date of this document and do not constitute investment advice. The underlying assumptions and these views are subject to change based on market and other conditions and may differ from other portfolio managers or of the firm as a whole. 

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