Sustainable investing continues to evolve rapidly, with fixed income investors playing an increasingly influential role in driving market-wide progress. This report presents a comprehensive overview of Franklin Templeton Fixed Income’s 2025 engagement activities, highlighting how systematic dialogue with corporate, sovereign and supranational issuers informs our investment decisions and supports more resilient, transparent and sustainable capital markets. Our engagement efforts reflect a deliberate shift toward more targeted, higher-quality conversations that strengthen our understanding of material ESG risks and opportunities. Across regions and sectors, we observed growing momentum on key sustainability themes, including decarbonisation pathways, nature conservation, social inclusion and improved sustainable disclosure. These thematic engagements enabled us to assess issuers’ strategic alignment with global climate objectives, evaluate governance practices and identify areas where enhanced reporting or operational progress is still required. Throughout the year, we also deepened our holistic approach, emphasising the interconnected nature of environmental and social outcomes and the importance of robust decision data for investors. As sustainable finance enters a new phase defined by higher expectations, greater scrutiny and accelerating regulatory change, the message from our engagements is clear: credible progress demands transparency, ambition and consistent execution. By integrating these insights, we aim to be better positioned manage risk, identify resilient investment opportunities and capture long-term value in a rapidly transforming global economy.