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Franklin Resources Proxy Voting Policies 2016

Whereas:   Franklin Resources (FR) is a respected leader in the financial services industry. FR 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.
FR reports and mitigates greenhouse gas emissions associated with its operations and the company’s other climate change-related impacts.   In its response to a survey by the Carbon Disclosure Project, FR states:
-          … The ESG team partners with Investment Managers to enhance the integration of ESG considerations in the investment process in order to manage risk and increase returns, as ESG issues like  … climate change… can impact the performance of securities. 
Climate change has been incorporated into the FR’s enterprise and investment risk assessment processes as part of its ESG integration. The Company notes that it
…assesses current ESG integration practices, and works to improve the company’s framework for consistently incorporating the consideration of material ESG risks… These processes are being incorporated into the overall evaluation process of investment portfolios…”
FR and its subsidiaries are responsible for voting proxies of companies in their portfolios.  Aside from buy and sell decisions, proxy voting is one of the principal ways in which investors can engage in active management of portfolio risks and opportunities related to climate change. However, nothing in the existing disclosures provides investors with sufficient information to permit meaningful assessment of the congruency of proxy voting with FR’s statements recognizing climate change related risks.  Indeed, available information suggests that the Company's proxy voting record is incongruent with a responsive approach to climate change.

Many resolutions on the topic of climate change voted on by FR simply asked for more disclosure. According to public fund voting records, over the past few years funds managed by subsidiaries of FR voted against the vast majority of these resolutions, in contrast to funds managed by investment firms such as DWS, Oppenheimer, and AllianceBernstein who supported the majority of them.
These incongruities could pose a reputational risk to the company, especially given the contrast to actions of competing investment firms. Given the severe societal implications of climate change, there is risk to the company if its proxy voting practices become known to be incongruent with responsiveness to climate change risks.
Resolved:  Shareowners request that the Board of Directors issue a climate change report to shareholders by September 2016, at reasonable cost and omitting proprietary information. The report should assess any incongruities between the proxy voting practices of the company and its subsidiaries within the last year, and any of the company's policy positions regarding climate change.
This assessment should list all instances of votes cast that appeared to be inconsistent with the company's climate change positions, and explanations of the incongruency.  The report should also discuss policy measures that the company can adopt to help enhance congruency between its climate policies and proxy voting.