Putnam Investments, an active manager with $199 billion in AUM as of the end of June 2021, believes that sustainability should be an integral part of every company, including its own. As a result, Putnam’s sustainable investing team is deeply embedded in the business, participating not just in the core equity team but across every aspect of the company.
That makes for busy times, as seen in the snapshot of a week in the life of the sustainability investment management team published in Putnam’s most recent Impact Report.
In this feature, Putnam catalogued one week’s worth of meetings, conversations, tasks, and decisions undertaken by the firm’s sustainable investment team in November 2020, highlighting exactly what the process looks like and how integrated the team is into the entire company. The following pulls some of the highlights from the widely diversified array of meetings noted.
A Week in Review
Monday included meeting with an up-and-coming natural foods company to discuss new innovative new product lines; roundtables to dig deeper on expanding Putnam’s sustainability reporting; internal reviews on electric vehicle stocks; and an intro call with a healthcare-focused data analytics company about services it uses in tracking COVID-19. The day also included attending an external research meeting on racial equality in homeownership, community health, and sustainable housing growth.
Tuesday brought a call with a major retailer focused on the diverging spending habits between middle- and lower-income American consumers, as well as how to best affect change to the company’s labor model to emphasize better career opportunities, higher wages, and more racial equity investments. Team members also fielded calls on COVID-19 vaccination programs, upgrades to building health (including touchless doors, improved air circulation, and the like), and updates on plant-based food manufacturing.
On Wednesday, the team met with an innovative building materials/construction company; a tools and industrial manufacturing firm to discuss rehiring furloughed employees; and a luxury consignment retailer to discuss economic trends influencing the industry, as well as the need for greater board diversity..
Thursday’s agenda included discussions with a social media company to discuss privacy concerns and “how to balance the sometimes addictive nature of social media with customer utility.” The team also attended a conference on healthcare services and medical devices, which included presentations about innovations with minimally invasive surgery and corrective vision procedures, the cost effectiveness and health benefits involved in remote monitoring of chronic condition patients, the benefits of home healthcare, and a need for better distribution for up-and-coming cell- and genomics-based therapies.
On Friday, Putnam’s team closed out the week with a work session with a financial company looking to better integrate sustainability into its core investment process and grow it as the business moves into new areas, as well as a discussion with subject matter experts at a big investment bank on the ESG implications of the 2020 election results. ”
Overall, the team covered six major sectors in the week (consumer, industrials, technology, healthcare, communications, and financials) as well as roughly twenty different themes, not limited to stakeholder wellness, decarbonization, data privacy, inclusion, justice, and human health.
“Our sustainability and impact analyses are interwoven with our core investment process. This type of integration can be difficult to explain, as we are not simply adding separate sustainability analysis to Putnam’s core fundamental research. Rather, we are combining the two elements throughout the investment process,” wrote the report’s authors.
Through this report, Putnam has helped pull back the curtain for investors looking for integrated, core sustainability investment practices on the ground.
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