Sustainable investing

Strategies seeking strong financial and sustainability performance

We consider common sense ESG issues that are important to long-term business fundamentals.

Katherine Collins introduces our 2020 Impact report.

As we compile our 2020 impact report, the world is in the midst of the COVID-19 crisis. During this period, some things have changed in a meaningful and unwelcome way. Equity and credit markets have been unusually volatile. Our team meetings are held by phone and video as we work from home, instead of in our regular offices. Most sobering, the first numbers we analyze each morning reflect patients and infection rates and mortalities.

When times are difficult, both shortcomings and strengths are revealed. Individuals, communities, companies, and societies have the chance to rediscover their most valuable assets. We are reminded daily of the power of good health, of social connection, and of effective systems of care, on both micro and macro scales. Likewise, for our team, many of the investments in time, energy, and resources we've made these past years have become meaningful assets that we can lean on in these challenging times. For example, we have crafted several "mental models" like the idea map and materiality map featured in this report, which help us to structure our research priorities. We have created a series of analytical tools that help us to effectively and efficiently assess both financial and sustainability data. Perhaps most important, we have established a strong collaborative spirit within the dedicated sustainable investing team, as well as within the broader Putnam investment team. All of these tools have consistently helped us to identify risks and opportunities, complementing Putnam's formal risk management processes and our core fundamental research process.

More specifically, in recent weeks we have been able to use these strengths to quickly map potential systemic impacts of the COVID-19 crisis on well-being, social equity, employment, and access to care, which helped us to focus on key issues with a different perspective than many traditional investors have. With our broad network of research connections, we have been able to call upon insights from experts in governmental and non-profit organizations and from scientific research groups, which have helped us calibrate and compare potential long-term systemic effects versus the short-term volatility of the stock market. Perhaps most important, this broader research lens has helped to confirm what is unknown and unknowable at this stage of the crisis, helping us to assess risks of false confidence and false precision in a differentiated way.

All of these processes are also helping us to identify new opportunities for investment in three main types of companies: those that are providing solutions to some of our current challenges, those whose strong long-term prospects have been only temporarily dampened, and those whose businesses are well-positioned for an eventual recovery in a post-COVID-19 world. In all of these cases, our sustainability research links directly to our fundamental and valuation assessments, providing a "through line" to follow during these turbulent times.

This crisis has changed many things, and caused tremendous disruption and suffering worldwide. However, these circumstances also remind us of what is constant. Now more than ever, we believe that sustainable companies could also prove to be more resilient and beneficial than others over the long term. We believe that active management has the potential to add meaningful context and value to sustainable investing. We believe that current conditions will illuminate new opportunities and new solutions that contribute to a thriving society, planet, and economy.

We deeply value your partnership and trust, and continue to work hard and with highest integrity on your behalf, connecting our investing with the world it was meant to serve.

Katherine Collins, CFA, MTS
Head of Sustainable Investing

| View the 2020 Impact Report

What is sustainable investing?

Sustainable investing aims to identify companies that offer potential for strong financial returns, sustainable business practices, and positive impact.

Sustainable Leaders Fund (PNOYX)

This fund received a Overall Morningstar Rating out of 1,186 funds in the Large Growth category based on total return as of 03/31/21

Sustainable Future Fund (PMVYX)

Investing in companies with strong fundamentals offering solutions to sustainability challenges.

PMVYX pursues a growth investment style, and its benchmark is the Russell MidCap Growth Index.

About our sustainable funds

Sustainable investing aims to identify companies that are thriving by producing beneficial products in a responsible way. Learn more.

Sustainable investing is flourishing

How we think about carbon, diversity, and research

Explore these graphics for examples of our distinctive views about important ESG topics such as carbon intensity, corporate diversity, and sector research.

Dive into key metrics from our impact report

Analyzing carbon intensity company by company

We have increased holdings in companies that we believe are leading the way in replacing hydrocarbons with renewable energy generation.

Understanding the value of diversity

Our portfolios have a higher-than-market representation of companies where women comprise 30% or more of total board membership. Diversity can improve company decision-making.

A week in the life of active research

Our sustainability and impact efforts are interwoven with our core investment research process at Putnam. Read a sample of a week of research meetings that we held with companies in December, 2019.

Investment team and research

Katherine Collins, CFA, MTS, Head of Sustainable Investing

Experienced as an equity analyst, portfolio manager, and head of research at Fidelity, Katherine founded and led Honeybee Capital, a sustainable research firm, before joining Putnam in 2017.

Katherine Collins, CFA Head of Sustainable Investing
Shep Perkins, CFA, Chief Investment Officer, Equities

As CIO of Equities, Shep is responsible for providing strategic direction to Putnam’s portfolio managers and equity analysts. He joined Putnam in 2011 and is Portfolio Manager of Putnam Sustainable Leaders Fund.

Shep Perkins, CFA, Co-Head of Equities
Stephanie Dobson, Portfolio Manager, Analyst

Stephanie brings together experience in interpreting and applying ESG data with skills in fundamental analysis and valuation of companies.

Stephanie Dobson, Analyst
Alexander Rickson, CFA, Quantitative Analyst

Alex provides skills both in the interpretation of ESG data and its application to the processes of risk management and portfolio construction.

Alexander Rickson, CFA, Quantitative Analyst
Latest perspective:
Sustainability research: A week in the life of our team

Sustainability research: A week in the life of our team

Our research includes discussions with company managements, other researchers and investors, industry and subject experts, and non-profit organizations.

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