An update on our ESG scores - Franklin Templeton Investments

The second semi-annual update of the Templeton Global Macro ESG Index (TGM-ESGI) scores in 2019.

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... In early 2018, Templeton Global Macro (TGM) published Global Macro Shifts issue 9 - Environmental, Social and Governance Factors in Global Macro Investing [GMS-9]. The paper explored how they evaluate environmental, social and governance ( ESG ) factors in their macroeconomic research process and described the process of codifying the team’s research discussions into quantifiable scores. GMS-9 formally introduced their proprietary ESG scoring system, the Templeton Global Macro ESG Index (TGM-ESGI), which was one of the first methodologies in the sovereign fixed income markets to focus on projected changes in ESG scores as a source of investment insight. Going forward, they intend to publicly update their TGM-ESGI scores on a recurring basis. 

This update is their second semiannual update in 2019. It contains a brief background on their ESG philosophy as well as an update on their methodology, notably including an improvement they made to adjust from overweighting S and G factors in previous iterations to an equal weighting of each of the E, S and G factors going forward. The paper also provides updated TGM-ESGI scores for 56 countries, along with brief case studies for three countries with improving projected scores and two countries with declining projected scores. As the sovereign ESG landscape continues to evolve, they also continue to look for ways to enhance and refine how we measure ESG factors and how we use that information to inform investment decisions.

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