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CONTRIBUTORS

David Zahn, CFA, FRM

Head of European Fixed Income,
Franklin Templeton Fixed Income

Justyna Tasic, Ph.D.

Fixed Income Sustainability Manager
Sustainability & Europe Fixed Income

Ania Cwojdzinska, Ph.D.

Impact Analyst
Sustainability & Europe Fixed Income

Patryk Durand

Intern

Introduction

As sustainable finance evolves, the integration of social and environmental factors into investment decision-making is becoming essential. This piece underscores the importance of holistic sustainability, spotlighting the International Capital Market Association’s (ICMA) Harmonized Framework for Impact Reporting. By encouraging issuers to disclose both environmental and social outcomes—especially metrics that reflect community benefits—ICMA promotes greater transparency and accountability. Reporting social co-benefits, such as the number of people impacted, brings a human dimension to green investments and strengthens the integrity of the market.

Key highlights

  • Holistic Sustainability: The document emphasizes the importance of integrating both environmental and social considerations into investment decision-making.
  • Reporting Framework: the International Capital Market Association’s (ICMA) Harmonized Framework for Impact Reporting encourages issuers to report both environmental and social outcomes. In the most recent Harmonized Framework for Impact Reporting, additional social metrics are described, with a focus on providing information on communities benefiting from green projects.
  • Transparency and Accountability: Transparency is crucial for informed decision-making and market integrity. Reporting social co-benefits, such as the number of people benefiting from green investments, adds a vital human dimension to sustainability, making the impact more tangible and relatable.

IMPORTANT LEGAL INFORMATION

This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. All investments involve risks, including possible loss of principal. There is no guarantee that a strategy will meet its objective. Performance may also be affected by currency fluctuations. Reduced liquidity may have a negative impact on the price of the assets. Currency fluctuations may affect the value of overseas investments. Where a strategy invests in emerging markets, the risks can be greater than in developed markets. Where a strategy invests in derivative instruments, this entails specific risks that may increase the risk profile of the strategy. Where a strategy invests in a specific sector or geographical area, the returns may be more volatile than a more diversified strategy.

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