Products that consider sustainability risks in their ESG integration approach.
What Does SFDR Mean?
From food and clothing to recreation and travel, our everyday choices have a profound effect on the environment. Now more than ever, the same is true of how we save and invest.
To help investors make better-informed choices, the EU's Sustainable Finance Disclosure Regulation (SFDR), effective since March 2021, established clear sustainability standards and imposed requirements for sustainability-related disclosures at the entity, service, and product levels.
SFDR is part of a broader set of EU regulations designed to integrate sustainability into financial decision-making and to prevent greenwashing. Since the initial implementation, SFDR has been updated as part of the EU's broader strategy to align financial flows with the Paris Agreement and the United Nations Sustainable Development Goals (SDGs). By enhancing transparency and comparability, SFDR aims to empower investors to make more informed decisions and to support the transition to a more sustainable economy.
How the New EU Regulation (SFDR) Can Help Investors
It establishes sustainability standards within the financial markets – asset managers are on notice to avoid the greenwashing of financial products.
It imposes new requirements for sustainability-related disclosures for financial institutions at entity, service, and product level.
It provides standardised disclosures to help provide comparability of types of ESG products.
It recognizes sustainability risks and opportunities by categorising products marketed in the EU.
It aims to connect finance to sustainability, e.g by supporting 1.5C scenario, CO2 emissions reduction, gender equity, and social justice.
Classification of Financial Products
The new EU regulation imposes various new sustainability-related disclosures in pre-contractual, periodic and website documentation. The SFDR basically classifies financial products into three categories:
Article 6
Article 8
Products that have an ESG integration approach and, in addition, have binding environmental and/or social characteristics in their process.
Article 9
Products that have an ESG integration approach, have binding environmental and/or social characteristics, and a clear sustainable investment objective.
Explore Our Sustainable Products
Franklin Templeton sees value in all three categories of disclosures. We offer a full range of funds that meet the SFDR requirements and can help investors reach their individual investment goals.
See our Article 8 and 9 funds below.
Featured Funds
Franklin European Total Return Fund1
Article 8
- European multi-sector fixed income fund
- Actively manages a diversified set of low-correlated positions
- Has binding environmental and/or social characteristics
FTGF ClearBridge US Equity Sustainability Leaders Fund2
Article 8
- US equity fund
- Invests in high-quality companies with outstanding ESG characteristics
- Has binding environmental and/or social characteristics
FTGF Brandywine Global Income Optimiser Fund2
Article 8
- All-weather global bond fund
- Seeks income generation while guarding against downside risk
- Has binding environmental and/or social characteristics
Templeton Global Climate Change Fund1
Article 9
- Global equity fund
- Invests in companies that aim to reduce emissions and limit the consequences of climate change
- Has a clear sustainable investment objective
Franklin K2 Electron Global UCITS Fund3
Article 8
- Alternative fund
- Invests primarily in equity-related companies in the global infrastructure and utility sectors
- Has binding environmental and/or social characteristics
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A sub-fund of Franklin Templeton Investment Funds, a Luxembourg-registered SICAV (“FTIF”).
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A sub-fund of Franklin Templeton Global Funds plc (“FTGF plc”). FTGF is an open-ended investment company with variable capital, organised as an undertaking for collective investment in transferable securities (“UCITS”). FTGF is authorised in Ireland by the Central Bank of Ireland.
Our Commitment and Expertise
We have a long track record of considering ESG factors alongside the traditional financial measurements to help identify those investments that have the potential to deliver sustainable returns.
Read more about our commitment to sustainable investing here.
