Franklin Templeton said the newly-renamed Templeton Global Climate Change Fund, which is registered in Luxembourg, will invest in “attractively valued companies preparing for the transition to a lower carbon economy”.
Templeton Global Equity Group co-lead portfolio manager, Maarten Bloemen, said the firm believed companies that exhibited superior practices in identifying and preparing for climate change should have a long term competitive advantage over industry peers.
He said the fund looked for firms that were trying to lower their carbon footprint such as renewable energy companies, and companies that operated in higher carbon industries but were actively moving their businesses into lower carbon intensity areas.
The fund uses Templeton’s fundamental value investing approach combined with its in-house climate change research and also focuses on buying undervalued stocks in order to maximise long term returns.
According to Sarasin and Partners Compendium of Investment 2018 report, the growth of the UN’s Principles for Responsible Investment (PRI) reached almost $70trn in assets under management in 2017 from over 1,750 signatories in 50 countries. The report said this demonstrated the rapid spread of the concept of ESG integration.