At Franklin Templeton, one of our best examples of integrating environmental, social and governance (ESG) factors in macroeconomic research comes from the Templeton Global Macro team. The most important distinction in their approach comes from a forward-looking view. A good deal of the sovereign ESG work out there takes a backward view, assessing just where a country stands today and where it’s been, but not necessarily where it’s headed–and the pace of change. Our rigorous proprietary ESG scoring system, the Templeton Global Macro ESG Index (TGM-ESGI) covers 56 countries and it is a composite of 13 subcategories determined to be material to macroeconomic performance.
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