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Franklin Resources Proxy Voting Policies 2014

Franklin Resources is a respected leader in the financial services industry.
Franklin Resources has stated publicly that it understands how environmental, social, and governance (ESG) factors can affect companies financially. On its website, the Company states ESG issues may affect the value of an investment. And our Company’s 2012 CDP response states “Our investment management teams also incorporate relevant environmental factors into their investment decisions….For example, the Franklin Global Large Cap Team considers environmental, social, and governance (ESG) issues, including the effects of climate change and carbon pricing, to be relevant to longer-term sustainability of a company’s business model and, therefore, their returns to stakeholders…. We believe our fundamental bottom-up approach to investing, which takes relevant environmental factors into consideration such as climate change, gives us a competitive advantage by managing risk and opportunities within portfolios and attracting investors.”
As part of its fiduciary duty, Franklin Resources is responsible for voting proxies of companies in which it holds stock on behalf of clients. However, its proxy voting record seems to ignore Franklin Resources’ stated position regarding the impact of key environmental factors on shareholder value. A thoughtful fiduciary must carefully review the economic rationale for all proxy initiatives.
To the best of our knowledge, Franklin Resources uniformly votes against all shareholder resolutions on social, environmental and climate change matters, backing management recommendations even when major proxy advisory services, such as ISS, support such resolutions with a clear, economic rationale.  
For example, increasingly investors around the world acknowledge the potential for climate change to affect long-term business success. Pension funds, investment management firms and other investors with over $87 trillion in assets under management support the Carbon Disclosure Project, an initiative calling on companies to disclose their greenhouse gas emissions and reduction plans. 
In 2012 over 26 resolutions were filed at companies facing a potential, significant business impact from climate change. Many of the resolutions simply asked for more disclosure, noting that thousands of companies globally report on their carbon emissions and steps they are taking to reduce them. Franklin Resources voted against such resolutions, in contrast to investment firms such as DWS, Oppenheimer, and AllianceBernstein who supported the majority of them.
Ironically, Franklin Resources reports its own greenhouse gas emissions in its CDP response and further describes the company’s active role in addressing climate change.
We are disappointed that Franklin Resources’ proxy voting record does not reflect the company’s own commitment to climate change, as well as other social and environmental factors with the potential to impact long term shareholder value.
Shareholders request the Board to initiate a review of Franklin Resources’ Proxy Voting policies and practices, taking into account Franklin Resources’ own corporate responsibility and environmental positions and the fiduciary and economic case for the shareholder resolutions presented.  The review should consider updating Franklin Resources’ proxy voting policies. The results of the review, conducted at reasonable cost and excluding proprietary information, should be reported to investors by March 2015.