ClearBridge Investments 2025 Stewardship Report

Introduction

	Welcome Letter - Terrence Murphy, CEO The principle that a company’s performance on material ESG issues can affect value creation underpins our approach to ESG integration.
	Firm Overview We believe actively managed, high-conviction portfolios that emphasise differentiated, bottom-up stock selection provide clients the best opportunities to earn superior investment results over the long term.
	Annual Update - Mary Jane McQuillen, Head of ESG, Portfolio Manager Mary Jane McQuillen leads ClearBridge’s pioneering ESG integration efforts and has been with ClearBridge’s ESG program since 1996. She has been central to ClearBridge achieving milestones such as establishing a central research platform that integrates ESG factors by sector in fundamental analysis and co-publishing the first “ESG” report with the UNEP FI’s Asset Management Working Group in 2004.

Creating Value through ESG Integration

The principle that a company’s performance on material ESG issues can affect value creation is behind ClearBridge’s approach to ESG integration.

Why Analyse ESG Factors?

There is abundant academic evidence that strong ESG performance can result in lower costs of capital and better operational performance for companies.

ESG Performance is Linked to Value Creation

What strong and weak ESG performance can indicate.

Sustainability’s Evolving Profile

As economies and markets evolve, supply and demand dynamics shift, and technology redefines what is possible — creating new needs even as it meets existing ones — so the investment process must evolve to meet an ever-changing world.

Case Studies:
Greenwashing - Timothy W. Caulfield, ClearBridge Canadian Equity Strategies
Global Governance - Michael Feldman, ClearBridge International and Global Growth Strategies
Nuclear Power - Reed Cassady and Sam Peters, ClearBridge Value Strategy
Climate Adaptation - Anna Bui, Senior ESG Associate
Climate Financing - Miguel del Gallego, Senior Analyst, Financials
Human Rights - Hannah Klein, Senior ESG Associate
Modern Slavery - Nick Langley, ClearBridge Infrastructure Strategies
Improving Health - Marshall Gordon and Nicholas Wu, Senior Analysts, Health Care
The Business Case for Diversity - Michael Clarfeld, ClearBridge Dividend Strategy

Engaging Companies as a Business Owner

ClearBridge pursues a partnership approach to active ownership, seeking to act as responsible stewards of our clients’ capital, with the knowledge that shareowners are part business owners that can provide valuable input leading to the ultimate success of a company.

Engage for Impact

As long-term investors, our company engagements can take place over a multiyear period. Therefore, throughout the course of the engagement, we track and categorise company progress by stages, outlined in the Engage for Impact Progress Framework.

Case Studies: Ecolab, Haleon

Engagement Highlights
Environmental Themes

Social Themes

Governance Themes

Proxy Voting Guided by Fiduciary Principles

In voting proxies, we seek a judicious approach and are guided by general fiduciary principles. Our goal is to act prudently and solely in the best interest of the beneficial owners of the accounts we manage.

ClearBridge Proxy Voting 2024 Overview

In 2024 there were over 650 shareholder proposals at companies in which ClearBridge is a shareowner, covering a wide range of ESG issues. The most common governance proposals concerned electing shareholder nominees to the board of directors; the growth of this issue was notable as it did not feature prominently at all in 2023. Climate change and political activity continued to dominate environmental- and social-related shareholder proposals.

Proxy Voting Highlights: As a top shareholder of many companies, we use our voting power and ongoing engagements to suggest improvements for companies we own and provide feedback to express our opinion of proposals we deem inadequate.

An Investment Framework Supporting the U.S. Sustainable Development Goals

For ClearBridge, the U.N.’s 17 Sustainable Development Goals (SDGs) represent a useful way to understand and communicate global sustainability goals.

Addressing SDGs through Sustainability Themes

SDGs Key for Productivity and Growth - Benedict Buckley, ClearBridge Sustainability Leaders Strategy
Using SDGs to Identify Opportunities in Clean Water - Grace Su, ClearBridge International Value Strategy, ClearBridge Global Value Improvers Strategy; Jean Yu, ClearBridge International Value Strategy, ClearBridge Global Value Improvers Strategy, ClearBridge Value Strategy

Download Our 2025 Stewardship Report

*Disclaimer

"ClearBridge Investments” and “ClearBridge” consists of ClearBridge Investments, LLC. (CBI) and its affiliated managers whose businesses have been operationally integrated with CBI’s, including ClearBridge Investments Limited and its subsidiary in Australia and a part of Franklin Templeton Investments Corp. doing business as ClearBridge Investments in Canada.