a_sustainleaders.htm

ASC 820 establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of the fund’s investments. The three levels are defined as follows:

Level 1: Valuations based on quoted prices for identical securities in active markets.

Level 2: Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3: Valuations based on inputs that are unobservable and significant to the fair value measurement.

The following is a summary of the inputs used to value the fund’s net assets as of the close of the reporting period:


		Valuation inputs
Investments in securities:	Level 1	Level 2	Level 3
Common stocks*:
Communication services	$148,440,812	$—	$—
Consumer discretionary	907,368,428	—	—**
Consumer staples	371,452,724	—	—
Financials	662,754,717	—	—
Health care	999,948,433	—	—
Industrials	542,449,732	—	—
Information technology	2,226,492,841	—	—
Materials	520,561,539	—	—
Real estate	143,202,202	—	—
Utilities	189,590,748	—	—
Total common stocks	6,712,262,176	—	—
Convertible preferred stocks	—	—	—**
U.S. treasury obligations	—	29,901	—
Short-term investments	101,000	165,152,586	—
Totals by level	$6,712,363,176	$165,182,487	$—


		Valuation inputs
Other financial instruments:	Level 1	Level 2	Level 3
Forward currency contracts	$—	$(753,508)	$—
Totals by level	$—	$(753,508)	$—
* Common stock classifications are presented at the sector level, which may differ from the fund’s portfolio presentation.
** Value of Level 3 security is $—.
At the start and close of the reporting period, Level 3 investments in securities represented less than 1% of the fund’s net assets and were not considered a significant portion of the fund’s portfolio.

The accompanying notes are an integral part of these financial statements.


24 Sustainable Leaders Fund

Statement of assets and liabilities 12/31/21 (Unaudited)


ASSETS
Investment in securities, at value, including $53,474,146 of securities on loan (Note 1 and 8):
Unaffiliated issuers (identified cost $3,611,975,319)	$6,712,593,003
Affiliated issuers (identified cost$164,952,660) (Note 5)	164,952,660
Foreign currency (cost $68) (Note 1)	69
Dividends, interest and other receivables	5,596,997
Foreign tax reclaim	1,965,872
Receivable for shares of the fund sold	2,043,976
Prepaid assets	75,189
Total assets	6,887,227,766

LIABILITIES
Payable to custodian	7,810
Payable for shares of the fund repurchased	2,012,845
Payable for compensation of Manager (Note 2)	3,333,096
Payable for custodian fees (Note 2)	19,818
Payable for investor servicing fees (Note 2)	1,497,654
Payable for Trustee compensation and expenses (Note 2)	2,178,236
Payable for administrative services (Note 2)	73,276
Payable for distribution fees (Note 2)	3,939,316
Unrealized depreciation on forward currency contracts (Note 1)	753,508
Collateral on securities loaned, at value (Note 1)	54,868,505
Collateral on certain derivative contracts, at value (Notes 1 and 8)	130,901
Other accrued expenses	295,092
Total liabilities	69,110,057

Net assets	$6,818,117,709

REPRESENTED BY
Paid-in capital (Unlimited shares authorized) (Notes 1 and 4)	$3,489,362,443
Total distributable earnings (Note 1)	3,328,755,266
Total — Representing net assets applicable to capital shares outstanding	$6,818,117,709

COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE
Net asset value and redemption price per class A share
($6,159,147,083 divided by 49,738,632 shares)	$123.83
Offering price per class A share (100/94.25 of $123.83)^*	$131.38
Net asset value and offering price per class B share ($26,892,295 divided by 329,818 shares)^**	$81.54
Net asset value and offering price per class C share ($44,529,047 divided by 473,681 shares)^**	$94.01
Net asset value, offering price and redemption price per class R share
($4,257,453 divided by 36,169 shares)	$117.71
Net asset value, offering price and redemption price per class R6 share
($117,642,024 divided by 856,382 shares)	$137.37
Net asset value, offering price and redemption price per class Y share
($465,649,807 divided by 3,399,095 shares)	$136.99

^*On single retail sales of less than $50,000. On sales of $50,000 or more the offering price is reduced.

^**Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

The accompanying notes are an integral part of these financial statements.

Sustainable Leaders Fund 25

Statement of operations Six months ended 12/31/21 (Unaudited)


INVESTMENT INCOME
Dividends (net of foreign tax of $107,652)	$33,743,406
Interest (including interest income of $57,593 from investments in affiliated issuers) (Note 5)	57,650
Securities lending (net of expenses) (Notes 1 and 5)	40,798
Total investment income	33,841,854

EXPENSES
Compensation of Manager (Note 2)	21,032,661
Investor servicing fees (Note 2)	4,455,837
Custodian fees (Note 2)	44,280
Trustee compensation and expenses (Note 2)	115,187
Distribution fees (Note 2)	8,091,111
Administrative services (Note 2)	110,087
Other	672,755
Total expenses	34,521,918
Expense reduction (Note 2)	(2,119)
Net expenses	34,519,799

Net investment loss	(677,945)

REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Securities from unaffiliated issuers	407,122,555
Foreign currency transactions (Note 1)	4,114
Forward currency contracts (Note 1)	10,963,065
Total net realized gain	418,089,734
Change in net unrealized appreciation (depreciation) on:
Securities from unaffiliated issuers	102,938,181
Assets and liabilities in foreign currencies	(65,870)
Forward currency contracts	(4,856,209)
Total change in net unrealized appreciation	98,016,102

Net gain on investments	516,105,836

Net increase in net assets resulting from operations	$515,427,891

The accompanying notes are an integral part of these financial statements.

26 Sustainable Leaders Fund

Statement of changes in net assets


INCREASE IN NET ASSETS	Six months ended 12/31/21*	Year ended 6/30/21
Operations
Net investment income (loss)	$(677,945)	$12,361,957
Net realized gain on investments
and foreign currency transactions	418,089,734	595,192,161
Change in net unrealized appreciation of investments
and assets and liabilities in foreign currencies	98,016,102	1,348,385,944
Net increase in net assets resulting from operations	515,427,891	1,955,940,062
Distributions to shareholders (Note 1):
From ordinary income
Net investment income
Class A	(26,857,581)	(14,836,252)
Class R	(1,611)	(11,977)
Class R6	(804,212)	(467,043)
Class Y	(2,861,909)	(1,520,344)
Net realized short-term gain on investments
Class A	(81,163,859)	(21,181,876)
Class B	(524,802)	(192,033)
Class C	(751,546)	(211,035)
Class R	(58,343)	(42,368)
Class R6	(1,406,578)	(320,374)
Class Y	(5,614,468)	(1,217,303)
From net realized long-term gain on investments
Class A	(542,485,571)	(336,675,646)
Class B	(3,507,688)	(3,052,274)
Class C	(5,023,208)	(3,354,300)
Class R	(389,957)	(673,413)
Class R6	(9,401,329)	(5,092,193)
Class Y	(37,526,159)	(19,348,436)
Increase from capital share transactions (Note 4)	513,346,757	3,673,402
Total increase in net assets	310,395,827	1,551,416,597

NET ASSETS
Beginning of period	6,507,721,882	4,956,305,285
End of period	$6,818,117,709	$6,507,721,882

^*Unaudited.

The accompanying notes are an integral part of these financial statements.

Sustainable Leaders Fund 27

Financial highlights (For a common share outstanding throughout the period)


	INVESTMENT OPERATIONS				LESS DISTRIBUTIONS						RATIOS AND SUPPLEMENTAL DATA
												Ratio of	Ratio of net
	Net asset		Net realized			From						expenses	investment
	value,		and unrealized	Total from	From	net realized		Non-recurring	Net asset	Total return	Net assets,	to average	income (loss)	Portfolio
	beginning	Net investment	gain (loss) on	investment	net investment	gain on	Total	reimburse-	value, end	at net asset	end of period	net assets	to average	turnover
Period ended	of period	income (loss)^a	investments	operations	income	investments	distributions	ments	of period	value (%)^b	(in thousands)	(%)^c	net assets (%)	(%)
Class A
December 31, 2021^**	$128.40	(.02)	9.93	9.91	(.60)	(13.88)	(14.48)	—	$123.83	8.00^*	$6,159,147	.52^*	(.02)^*	12^*
June 30, 2021	98.08	.23	38.43	38.66	(.33)	(8.01)	(8.34)	—	128.40	40.82	5,915,779	1.05	.20	24
June 30, 2020	92.99	.23	11.58	11.81	(.31)	(6.41)	(6.72)	—	98.08	13.30	4,535,812	1.03	.25	44
June 30, 2019	95.86	.14	12.06	12.20	(.04)	(15.03)	(15.07)	—^f	92.99	15.46	4,298,012	1.04	.16	30
June 30, 2018	83.77	.04	16.44	16.48	(.45)	(3.94)	(4.39)	—	95.86	20.16	4,085,165	.99	.04	87
June 30, 2017	67.21	.30^d	16.26	16.56	—	—	—	—	83.77	24.64	3,648,574	1.01	.40^d	76
Class B
December 31, 2021^**	$89.00	(.36)	6.78	6.42	—	(13.88)	(13.88)	—	$81.54	7.60^*	$26,892	.90 ^*	(.40)^*	12^*
June 30, 2021	70.32	(.45)	27.14	26.69	—	(8.01)	(8.01)	—	89.00	39.78	30,467	1.80	(.56)	24
June 30, 2020	68.68	(.35)	8.40	8.05	—	(6.41)	(6.41)	—	70.32	12.45	33,752	1.78	(.52)	44
June 30, 2019	75.26	(.41)	8.86	8.45	—	(15.03)	(15.03)	—^f	68.68	14.60	43,671	1.79	(.60)	30
June 30, 2018	66.70	(.52)	13.02	12.50	—	(3.94)	(3.94)	—	75.26	19.26	51,481	1.74	(.72)	87
June 30, 2017	53.91	(.21) ^d	13.00	12.79	—	—	—	—	66.70	23.72	57,979	1.76	(.35) ^d	76
Class C
December 31, 2021^**	$100.59	(.41)	7.71	7.30	—	(13.88)	(13.88)	—	$94.01	7.60^*	$44,529	.90 ^*	(.39)^*	12^*
June 30, 2021	78.62	(.51)	30.49	29.98	—	(8.01)	(8.01)	—	100.59	39.76	41,870	1.80	(.56)	24
June 30, 2020	76.05	(.38)	9.36	8.98	—	(6.41)	(6.41)	—	78.62	12.47	38,033	1.78	(.51)	44
June 30, 2019	81.69	(.45)	9.84	9.39	—	(15.03)	(15.03)	—^f	76.05	14.60	38,196	1.79	(.59)	30
June 30, 2018	72.09	(.58)	14.12	13.54	—	(3.94)	(3.94)	—	81.69	19.26	34,733	1.74	(.74)	87
June 30, 2017	58.28	(.23) ^d	14.04	13.81	—	—	—	—	72.09	23.70	66,307	1.76	(.35) ^d	76
Class R
December 31, 2021^**	$122.36	(.18)	9.46	9.28	(.05)	(13.88)	(13.93)	—	$117.71	7.87^*	$4,257	.64^*	(.14)^*	12^*
June 30, 2021	93.85	(.12)	36.77	36.65	(.13)	(8.01)	(8.14)	—	122.36	40.47	3,860	1.30	(.10)	24
June 30, 2020	89.28	(.01)	11.10	11.09	(.11)	(6.41)	(6.52)	—	93.85	13.01	8,167	1.28	(.02)	44
June 30, 2019	92.81	(.08)	11.58	11.50	—	(15.03)	(15.03)	—^f	89.28	15.18	8,443	1.29	(.10)	30
June 30, 2018	81.27	(.19)	15.94	15.75	(.27)	(3.94)	(4.21)	—	92.81	19.85	8,210	1.24	(.22)	87
June 30, 2017	65.36	.11^d	15.80	15.91	—	—	—	—	81.27	24.34	7,930	1.26	.15^d	76
Class R6
December 31, 2021^**	$141.11	.22	10.95	11.17	(1.03)	(13.88)	(14.91)	—	$137.37	8.19 ^*	$117,642	.35^*	.15^*	12^*
June 30, 2021	107.06	.69	42.06	42.75	(.69)	(8.01)	(8.70)	—	141.11	41.29	102,909	.70	.55	24
June 30, 2020	100.88	.61	12.62	13.23	(.64)	(6.41)	(7.05)	—	107.06	13.71	74,725	.66	.61	44
June 30, 2019	102.51	.52	13.09	13.61	(.21)	(15.03)	(15.24)	—^f	100.88	15.89	68,654	.67	.53	30
June 30, 2018 ^†	103.52	.01	(1.02)	(1.01)	—	—	—	—	102.51	(.98)^*	58,846	.07^*	-^e*	87

See notes to financial highlights at the end of this section.

The accompanying notes are an integral part of these financial statements.


28 Sustainable Leaders Fund	Sustainable Leaders Fund 29

Financial highlights cont.

INVESTMENT OPERATIONS

LESS DISTRIBUTIONS

RATIOS AND SUPPLEMENTAL DATA

Ratio of

Ratio of net

Net asset

Net realized

From

expenses

investment

value,

and unrealized

Total from

From

net realized

Non-recurring

Net asset

Total return

Net assets,

to average

income (loss)

Portfolio

beginning

Net investment

gain (loss) on

investment

net investment

gain on

Total

reimburse-

value, end

at net asset

end of period

net assets

to average

turnover

Period ended

of period

income (loss)^a

investments

operations

income

investments

distributions

ments

of period

value (%)^b

(in thousands)

(%)^c

net assets (%)

(%)

Class Y

December 31, 2021^**

$140.72

.16

10.91

11.07

(.92)

(13.88)

(14.80)

—

$136.99

8.14^*

$465,650

.39^*

.11^*

12^*

June 30, 2021

106.79

.58

41.95

42.53

(.59)

(8.01)

(8.60)

—

140.72

41.17

412,837

.80

.46

June 30, 2020

100.64

.50

12.59

13.09

(.53)

(6.41)

(6.94)

—

106.79

13.59

265,816

.78

.51

June 30, 2019

102.50

.40

13.05

13.45

(.28)

(15.03)

(15.31)

—^f

100.64

15.74

208,467

.79

.41

June 30, 2018

89.27

.29

17.55

17.84

(.67)

(3.94)

(4.61)

—

102.50

20.46

178,886

.74

.30

June 30, 2017

71.44

.52^d

17.31

17.83

—

89.27

24.96

199,737

.76

.64^d

Before March 21, 2018, the fund was managed with a materially different investment strategy and may have achieved materially different performance results under its current investment strategy from that shown for periods before that date.

^*Not annualized.

^** Unaudited.

†For the period May 22, 2018 (commencement of operations) to June 30, 2018.

^aPer share net investment income (loss) has been determined on the basis of the weighted average number of shares outstanding during the period.

^bTotal return assumes dividend reinvestment and does not reflect the effect of sales charges.

^cIncludes amounts paid through expense offset and/or brokerage/service arrangements, if any (Note 2). Also excludes acquired fund fees and expenses, if any.

^dReflects a dividend received by the fund from a single issuer which amounted to the following amounts:


	Per share	Percentage of average net assets
Class A	$0.22	0.29%
Class B	0.18	0.30
Class C	0.19	0.29
Class R	0.21	0.28
Class Y	0.22	0.27

^eAmount represents less than 0.01%.

^fReflects a non-recurring reimbursement pursuant to a settlement between the Securities and Exchange Commission (the SEC) and Canadian Imperial Holdings, Inc. and CIBC World Markets Corp., which amounted to less than $0.01 per share outstanding on March 6, 2019.

The accompanying notes are an integral part of these financial statements.


30 Sustainable Leaders Fund	Sustainable Leaders Fund 31

Notes to financial statements 12/31/21 (Unaudited)

Within the following Notes to financial statements, references to “State Street” represent State Street Bank and Trust Company, references to “the SEC” represent the Securities and Exchange Commission, references to “Putnam Management” represent Putnam Investment Management, LLC, the fund’s manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC and references to “OTC”, if any, represent over-the-counter. Unless otherwise noted, the “reporting period” represents the period from July 1, 2021 through December 31, 2021.

Putnam Sustainable Leaders Fund (the fund) is a Massachusetts business trust, which is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The goal of the fund is to seek long-term capital appreciation. The fund invests mainly in common stocks of U.S. companies of any size, with a focus on companies that Putnam Management believes exhibit a commitment to financially material sustainable business practices. In evaluating investments for the fund, Putnam Management views “financially material sustainable business practices” as business practices that Putnam Management believes are reasonably likely to impact the financial condition or operating performance of a company and that relate to environmental, social, or corporate governance issues. Putnam Management identifies relevant environmental, social, or corporate governance issues on a sector-specific basis using an internally developed materiality map, which is informed by the sustainability issues identified by the Sustainability Accounting Standards Board as material to companies within a particular industry. As part of this analysis, Putnam Management may utilize metrics and information such as emissions data, carbon intensity, sources of energy used for operations, water use and re-use, water generation and diversion from landfill, employee safety and diversity data, supplier audits, product safety, board composition, and incentive compensation structures. Stocks of companies that exhibit a commitment to financially material sustainable business practices are typically, but not always, considered to be growth stocks. Growth stocks are stocks of companies whose revenues, earnings, or cash flows are expected to grow faster than those of similar firms, and whose business growth and other characteristics may lead to an increase in stock price. Putnam Management may consider, among other factors, a company’s sustainable business practices (as described above), valuation, financial strength, growth potential, competitive position in its industry, projected future earnings, cash flows and dividends when deciding whether to buy or sell investments. The fund may also invest in non-U.S. companies.

Under normal circumstances, the fund invests at least 80% of the value of its net assets in securities that meet Putnam Management’s sustainability criteria. These criteria are based on a proprietary materiality map that is informed by the sustainability issues identified as material by the Sustainability Accounting Standards Board. In applying these criteria, Putnam Management will assign each company a proprietary environmental, social and/or corporate governance (ESG) rating ranging from 1 to 4 (1 indicating the highest (best) ESG rating and 4 indicating the lowest (worst) ESG rating). In order to meet Putnam Management’s sustainability criteria for purposes of this investment policy, a company must be rated 2 or 1 by Putnam Management. This policy is non-fundamental and may be changed only after 60 days’ notice to shareholders. In selecting each investment, Putnam Management focuses on companies that have a demonstrated commitment to sustainable business practices in areas that are relevant and material to their long-term financial returns and risk profiles. Putnam Management believes that companies that have exhibited such a commitment also often demonstrate potential for strong financial growth. This commitment may be reflected through ESG policies, practices, or outcomes. The fund’s approach to sustainable investing incorporates fundamental research together with consideration of ESG factors. Environmental factors include, for example, a company’s carbon intensity and use of resources like water or minerals. Sustainability measures in this area might include plans to reduce waste, increase recycling, raise the proportion of energy supply from renewable sources, or improve product design to be less resource intensive. Social factors include, for example, labor practices and supply chain management. Sustainability measures in this area might include programs to improve employee well-being, commitment to workplace equality and diversity, or improved stewardship of supplier relationships and working conditions. Corporate governance factors include, for example, board composition and executive compensation. Sustainability measures in this area might include improvements in board independence or diversity, or alignment of management incentives with the company’s strategic sustainability objectives. The integrated approach of the fund combines analysis of the growing body of ESG data and deep fundamental analysis and looks for companies that demonstrate leadership, beyond compliance, on relevant sustainability issues. The characteristics that Putnam Management may use when considering sustainability leadership include:

(1) Materiality. The company is focused on sustainability issues that are relevant to long term business success.

(2) Creativity and proactiveness. The company’s sustainability characteristics go beyond compliance to demonstrate heightened commitment.

32 Sustainable Leaders Fund

(3) Transparency. The company’s goals are specific, with candid and consistent progress reporting.

(4) Impact. The sustainability characteristics create benefits that are meaningful both at the company and more broadly.

The fund offers class A, class B, class C, class R, class R6 and class Y shares. Purchases of class B shares are closed to new and existing investors except by exchange from class B shares of another Putnam fund or through dividend and/or capital gains reinvestment. Class A shares are sold with a maximum front-end sales charge of 5.75%. Class A shares generally are not subject to a contingent deferred sales charge, and class R, class R6 and class Y shares are not subject to a contingent deferred sales charge. Class B shares, which convert to class A shares after approximately eight years, are not subject to a front-end sales charge and are subject to a contingent deferred sales charge if those shares are redeemed within six years of purchase. Class C shares are subject to a one-year 1.00% contingent deferred sales charge and generally convert to class A shares after approximately eight years. Class R shares, which are not available to all investors, are sold at net asset value. The expenses for class A, class B, class C and class R shares may differ based on the distribution fee of each class, which is identified in Note 2. Class R6 and class Y shares, which are sold at net asset value, are generally subject to the same expenses as class A, class B, class C and class R shares, but do not bear a distribution fee, and in the case of class R6 shares, bear a lower investor servicing fee, which is identified in Note 2. Class R6 and class Y shares are not available to all investors.

In the normal course of business, the fund enters into contracts that may include agreements to indemnify another party under given circumstances. The fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be, but have not yet been, made against the fund. However, the fund’s management team expects the risk of material loss to be remote.

The fund has entered into contractual arrangements with an investment adviser, administrator, distributor, shareholder servicing agent and custodian, who each provide services to the fund. Unless expressly stated otherwise, shareholders are not parties to, or intended beneficiaries of these contractual arrangements, and these contractual arrangements are not intended to create any shareholder right to enforce them against the service providers or to seek any remedy under them against the service providers, either directly or on behalf of the fund.

Under the fund’s Amended and Restated Agreement and Declaration of Trust, any claims asserted against or on behalf of the Putnam Funds, including claims against Trustees and Officers, must be brought in state and federal courts located within the Commonwealth of Massachusetts.

Note 1: Significant accounting policies

The following is a summary of significant accounting policies consistently followed by the fund in the preparation of its financial statements. The preparation of financial statements is in conformity with accounting principles generally accepted in the United States of America and requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and the reported amounts of increases and decreases in net assets from operations. Actual results could differ from those estimates. Subsequent events after the Statement of assets and liabilities date through the date that the financial statements were issued have been evaluated in the preparation of the financial statements.

Investment income, realized and unrealized gains and losses and expenses of the fund are borne pro-rata based on the relative net assets of each class to the total net assets of the fund, except that each class bears expenses unique to that class (including the distribution fees applicable to such classes). Each class votes as a class only with respect to its own distribution plan or other matters on which a class vote is required by law or determined by the Trustees. If the fund were liquidated, shares of each class would receive their pro-rata share of the net assets of the fund. In addition, the Trustees declare separate dividends on each class of shares.

Security valuation Portfolio securities and other investments are valued using policies and procedures adopted by the Board of Trustees. The Trustees have formed a Pricing Committee to oversee the implementation of these procedures and have delegated responsibility for valuing the fund’s assets in accordance with these procedures to Putnam Management. Putnam Management has established an internal Valuation Committee that is responsible for making fair value determinations, evaluating the effectiveness of the pricing policies of the fund and reporting to the Pricing Committee.

Investments for which market quotations are readily available are valued at the last reported sales price on their principal exchange, or official closing price for certain markets, and are classified as Level 1 securities under Accounting Standards Codification 820 Fair Value Measurements and Disclosures (ASC 820). If no sales are reported, as in the case of some securities that are traded OTC, a security is valued at its last reported bid price and is generally categorized as a Level 2 security.

Sustainable Leaders Fund 33

Investments in open-end investment companies (excluding exchange-traded funds), if any, which can be classified as Level 1 or Level 2 securities, are valued based on their net asset value. The net asset value of such investment companies equals the total value of their assets less their liabilities and divided by the number of their outstanding shares.

Market quotations are not considered to be readily available for certain debt obligations (including short-term investments with remaining maturities of 60 days or less) and other investments; such investments are valued on the basis of valuations furnished by an independent pricing service approved by the Trustees or dealers selected by Putnam Management. Such services or dealers determine valuations for normal institutional-size trading units of such securities using methods based on market transactions for comparable securities and various relationships, generally recognized by institutional traders, between securities (which consider such factors as security prices, yields, maturities and ratings). These securities will generally be categorized as Level 2.

Many securities markets and exchanges outside the U.S. close prior to the scheduled close of the New York Stock Exchange and therefore the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after such close but before the scheduled close of the New York Stock Exchange. Accordingly, on certain days, the fund will fair value certain foreign equity securities taking into account multiple factors including movements in the U.S. securities markets, currency valuations and comparisons to the valuation of American Depository Receipts, exchange-traded funds and futures contracts. The foreign equity securities, which would generally be classified as Level 1 securities, will be transferred to Level 2 of the fair value hierarchy when they are valued at fair value. The number of days on which fair value prices will be used will depend on market activity and it is possible that fair value prices will be used by the fund to a significant extent. Securities quoted in foreign currencies, if any, are translated into U.S. dollars at the current exchange rate.

To the extent a pricing service or dealer is unable to value a security or provides a valuation that Putnam Management does not believe accurately reflects the security’s fair value, the security will be valued at fair value by Putnam Management in accordance with policies and procedures approved by the Trustees. Certain investments, including certain restricted and illiquid securities and derivatives, are also valued at fair value following procedures approved by the Trustees. These valuations consider such factors as significant market or specific security events such as interest rate or credit quality changes, various relationships with other securities, discount rates, U.S. Treasury, U.S. swap and credit yields, index levels, convexity exposures, recovery rates, sales and other multiples and resale restrictions. These securities are classified as Level 2 or as Level 3 depending on the priority of the significant inputs.

To assess the continuing appropriateness of fair valuations, the Valuation Committee reviews and affirms the reasonableness of such valuations on a regular basis after considering all relevant information that is reasonably available. Such valuations and procedures are reviewed periodically by the Trustees. The fair value of securities is generally determined as the amount that the fund could reasonably expect to realize from an orderly disposition of such securities over a reasonable period of time. By its nature, a fair value price is a good faith estimate of the value of a security in a current sale and does not reflect an actual market price, which may be different by a material amount.

Security transactions and related investment income Security transactions are recorded on the trade date (the date the order to buy or sell is executed). Gains or losses on securities sold are determined on the identified cost basis.

Interest income, net of any applicable withholding taxes, if any, and including amortization and accretion of premiums and discounts on debt securities, is recorded on the accrual basis. Dividend income, net of any applicable withholding taxes, is recognized on the ex-dividend date except that certain dividends from foreign securities, if any, are recognized as soon as the fund is informed of the ex-dividend date. Non-cash dividends, if any, are recorded at the fair value of the securities received. Dividends representing a return of capital or capital gains, if any, are reflected as a reduction of cost and/or as a realized gain.

Foreign currency translation The accounting records of the fund are maintained in U.S. dollars. The fair value of foreign securities, currency holdings, and other assets and liabilities is recorded in the books and records of the fund after translation to U.S. dollars based on the exchange rates on that day. The cost of each security is determined using historical exchange rates. Income and withholding taxes are translated at prevailing exchange rates when earned or incurred. The fund does not isolate that portion of realized or unrealized gains or losses resulting from changes in the foreign exchange rate on investments from fluctuations arising from changes in the market prices of the securities. Such gains and losses are included with the net realized and unrealized gain or loss on investments. Net realized gains and losses on foreign currency transactions represent net realized exchange gains or losses on disposition of foreign currencies, currency gains and losses realized between the trade and

34 Sustainable Leaders Fund

settlement dates on securities transactions and the difference between the amount of investment income and foreign withholding taxes recorded on the fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized appreciation and depreciation of assets and liabilities in foreign currencies arise from changes in the value of assets and liabilities other than investments at the period end, resulting from changes in the exchange rate.

Forward currency contracts The fund buys and sells forward currency contracts, which are agreements between two parties to buy and sell currencies at a set price on a future date. These contracts are used to hedge foreign exchange risk.

The U.S. dollar value of forward currency contracts is determined using current forward currency exchange rates supplied by a quotation service. The fair value of the contract will fluctuate with changes in currency exchange rates. The contract is marked to market daily and the change in fair value is recorded as an unrealized gain or loss. The fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed when the contract matures or by delivery of the currency. The fund could be exposed to risk if the value of the currency changes unfavorably, if the counterparties to the contracts are unable to meet the terms of their contracts or if the fund is unable to enter into a closing position. Risks may exceed amounts recognized on the Statement of assets and liabilities.

Forward currency contracts outstanding at period end, if any, are listed after the fund’s portfolio.

Master agreements The fund is a party to ISDA (International Swaps and Derivatives Association, Inc.) Master Agreements (Master Agreements) with certain counterparties that govern OTC derivative and foreign exchange contracts entered into from time to time. The Master Agreements may contain provisions regarding, among other things, the parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. With respect to certain counterparties, in accordance with the terms of the Master Agreements, collateral pledged to the fund is held in a segregated account by the fund’s custodian and, with respect to those amounts which can be sold or repledged, is presented in the fund’s portfolio.

Collateral pledged by the fund is segregated by the fund’s custodian and identified in the fund’s portfolio. Collateral can be in the form of cash or debt securities issued by the U.S. Government or related agencies or other securities as agreed to by the fund and the applicable counterparty. Collateral requirements are determined based on the fund’s net position with each counterparty.

Termination events applicable to the fund may occur upon a decline in the fund’s net assets below a specified threshold over a certain period of time. Termination events applicable to counterparties may occur upon a decline in the counterparty’s long-term and short-term credit ratings below a specified level. In each case, upon occurrence, the other party may elect to terminate early and cause settlement of all derivative and foreign exchange contracts outstanding, including the payment of any losses and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of the fund’s counterparties to elect early termination could impact the fund’s future derivative activity.

At the close of the reporting period, the fund had a net liability position of $753,508 on open derivative contracts subject to the Master Agreements. Collateral pledged by the fund at period end for these agreements totaled $110,945 and may include amounts related to unsettled agreements.

Securities lending The fund may lend securities, through its agent, to qualified borrowers in order to earn additional income. The loans are collateralized by cash in an amount at least equal to the fair value of the securities loaned. The fair value of securities loaned is determined daily and any additional required collateral is allocated to the fund on the next business day. The remaining maturities of the securities lending transactions are considered overnight and continuous. The risk of borrower default will be borne by the fund’s agent; the fund will bear the risk of loss with respect to the investment of the cash collateral. Income from securities lending, net of expenses, is included in investment income on the Statement of operations. Cash collateral is invested in Putnam Cash Collateral Pool, LLC, a limited liability company managed by an affiliate of Putnam Management. Investments in Putnam Cash Collateral Pool, LLC are valued at its closing net asset value each business day. There are no management fees charged to Putnam Cash Collateral Pool, LLC. At the close of the reporting period, the fund received cash collateral of $54,868,505 and the value of securities loaned amounted to $53,474,146.

Interfund lending The fund, along with other Putnam funds, may participate in an interfund lending program pursuant to an exemptive order issued by the SEC. This program allows the fund to borrow from or lend to other Putnam funds that permit such transactions. Interfund lending transactions are subject to each fund’s investment policies and borrowing and lending limits. Interest earned or paid on the interfund lending

Sustainable Leaders Fund 35

transaction will be based on the average of certain current market rates. During the reporting period, the fund did not utilize the program.

Lines of credit The fund participates, along with other Putnam funds, in a $317.5 million unsecured committed line of credit and a $235.5 million unsecured uncommitted line of credit, both provided by State Street. Borrowings may be made for temporary or emergency purposes, including the funding of shareholder redemption requests and trade settlements. Interest is charged to the fund based on the fund’s borrowing at a rate equal to 1.25% plus the higher of (1) the Federal Funds rate and (2) the Overnight Bank Funding Rate for the committed line of credit and 1.30% plus the higher of (1) the Federal Funds rate and (2) the Overnight Bank Funding Rate for the uncommitted line of credit. A closing fee equal to 0.04% of the committed line of credit and 0.04% of the uncommitted line of credit has been paid by the participating funds. In addition, a commitment fee of 0.21% per annum on any unutilized portion of the committed line of credit is allocated to the participating funds based on their relative net assets and paid quarterly. During the reporting period, the fund had no borrowings against these arrangements.

Federal taxes It is the policy of the fund to distribute all of its taxable income within the prescribed time period and otherwise comply with the provisions of the Internal Revenue Code of 1986, as amended (the Code), applicable to regulated investment companies. It is also the intention of the fund to distribute an amount sufficient to avoid imposition of any excise tax under Section 4982 of the Code.

The fund is subject to the provisions of Accounting Standards Codification 740 Income Taxes (ASC 740). ASC 740 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The fund did not have a liability to record for any unrecognized tax benefits in the accompanying financial statements. No provision has been made for federal taxes on income, capital gains or unrealized appreciation on securities held nor for excise tax on income and capital gains. Each of the fund’s federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service.

The fund may also be subject to taxes imposed by governments of countries in which it invests. Such taxes are generally based on either income or gains earned or repatriated. The fund accrues and applies such taxes to net investment income, net realized gains and net unrealized gains as income and/or capital gains are earned. In some cases, the fund may be entitled to reclaim all or a portion of such taxes, and such reclaim amounts, if any, are reflected as an asset on the fund’s books. In many cases, however, the fund may not receive such amounts for an extended period of time, depending on the country of investment.

Tax cost of investments includes adjustments to net unrealized appreciation (depreciation) which may not necessarily be final tax cost basis adjustments, but closely approximate the tax basis unrealized gains and losses that may be realized and distributed to shareholders. The aggregate identified cost on a tax basis is $3,804,722,200, resulting in gross unrealized appreciation and depreciation of $3,192,212,145 and $120,142,190, respectively, or net unrealized appreciation of $3,072,069,955.

Distributions to shareholders Distributions to shareholders from net investment income are recorded by the fund on the ex-dividend date. Distributions from capital gains, if any, are recorded on the ex-dividend date and paid at least annually. The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Dividend sources are estimated at the time of declaration. Actual results may vary. Any non-taxable return of capital cannot be determined until final tax calculations are completed after the end of the fund’s fiscal year. Reclassifications are made to the fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations.

Note 2: Management fee, administrative services and other transactions

The fund pays Putnam Management a management fee (base fee) (based on the fund’s average net assets and computed and paid monthly) at annual rates that may vary based on the average of the aggregate net assets of all open-end mutual funds sponsored by Putnam Management (excluding net assets of funds that are invested in, or that are invested in by, other Putnam funds to the extent necessary to avoid “double counting” of those assets). Such annual rates may vary as follows:


0.710%	of the first $5 billion,	0.510%	of the next $50 billion,
0.660%	of the next $5 billion,	0.490%	of the next $50 billion,
0.610%	of the next $10 billion,	0.480%	of the next $100 billion and
0.560%	of the next $10 billion,	0.475%	of any excess thereafter.

36 Sustainable Leaders Fund

In addition, the monthly management fee consists of the monthly base fee plus or minus a performance adjustment for the month. The performance adjustment is determined based on performance over the thirty-six month period then ended. Each month, the performance adjustment is calculated by multiplying the performance adjustment rate and the fund’s average net assets over the performance period and dividing the result by twelve. The resulting dollar amount is added to, or subtracted from the base fee for that month. The performance adjustment rate is equal to 0.03 multiplied by the difference between the fund’s annualized performance (measured by the fund’s class A shares) and the annualized performance of the benchmark indices described below each measured over the performance period. The maximum annualized performance adjustment rate is +/–0.12%. The monthly base fee is determined based on the fund’s average net assets for the month, while the performance adjustment is determined based on the fund’s average net assets over the thirty-six month performance period. This means it is possible that, if the fund underperforms significantly over the performance period, and the fund’s assets have declined significantly over that period, the negative performance adjustment may exceed the base fee. In this event, Putnam Management would make a payment to the fund.

Effective August 1, 2019, the fund’s benchmark index is the S&P 500 Index. Before August 1, 2019, the fund’s benchmark index was the Russell 3000 Growth Index. Because the performance adjustment is based on a rolling thirty-six-month performance period, there is a transition period during which the fund’s performance is compared to a composite index that reflects the performance of the Russell 3000 Growth Index for the portion of the performance period before August 1, 2019, and the performance of the S&P 500 Index for the remainder of the period.

Because the performance adjustment is based on the fund’s performance relative to its applicable benchmark index, and not its absolute performance, the performance adjustment could increase Putnam Management’s fee even if the fund’s shares lose value during the performance period provided that the fund outperformed its benchmark index, and could decrease Putnam Management’s fee even if the fund’s shares increase in value during the performance period provided that the fund underperformed its benchmark index.

For the reporting period, the management fee represented an effective rate (excluding the impact of any expense waiver in effect) of 0.311% of the fund’s average net assets, which included an effective base fee of 0.272% and an increase of 0.039% ($2,633,460) based on performance.

Putnam Management has contractually agreed, through October 30, 2022, to waive fees and/or reimburse the fund’s expenses to the extent necessary to limit the cumulative expenses of the fund, exclusive of brokerage, interest, taxes, investment-related expenses, extraordinary expenses, acquired fund fees and expenses and payments under the fund’s investor servicing contract, investment management contract and distribution plans, on a fiscal year-to-date basis to an annual rate of 0.20% of the fund’s average net assets over such fiscal year-to-date period. During the reporting period, the fund’s expenses were not reduced as a result of this limit.

Putnam Investments Limited (PIL), an affiliate of Putnam Management, is authorized by the Trustees to manage a separate portion of the assets of the fund as determined by Putnam Management from time to time. PIL did not manage any portion of the assets of the fund during the reporting period. If Putnam Management were to engage the services of PIL, Putnam Management would pay a quarterly sub-management fee to PIL for its services at an annual rate of 0.35% of the average net assets of the portion of the fund managed by PIL.

The fund reimburses Putnam Management an allocated amount for the compensation and related expenses of certain officers of the fund and their staff who provide administrative services to the fund. The aggregate amount of all such reimbursements is determined annually by the Trustees.

Custodial functions for the fund’s assets are provided by State Street. Custody fees are based on the fund’s asset level, the number of its security holdings and transaction volumes.

Putnam Investor Services, Inc., an affiliate of Putnam Management, provides investor servicing agent functions to the fund. Putnam Investor Services, Inc. received fees for investor servicing for class A, class B, class C, class R and class Y shares that included (1) a per account fee for each direct and underlying non-defined contribution account (retail account) of the fund; (2) a specified rate of the fund’s assets attributable to defined contribution plan accounts; and (3) a specified rate based on the average net assets in retail accounts. Putnam Investor Services, Inc. has agreed that the aggregate investor servicing fees for each fund’s retail and defined contribution accounts for these share classes will not exceed an annual rate of 0.25% of the fund’s average assets attributable to such accounts.

Class R6 shares paid a monthly fee based on the average net assets of class R6 shares at an annual rate of 0.05%.

Sustainable Leaders Fund 37


Class A	$4,078,013	Class R6	27,880
Class B	19,146	Class Y	298,770
Class C	29,270	Total	$4,455,837
Class R	2,758

The fund has entered into expense offset arrangements with Putnam Investor Services, Inc. and State Street whereby Putnam Investor Services, Inc.’s and State Street’s fees are reduced by credits allowed on cash balances. For the reporting period, the fund’s expenses were reduced by $2,119 under the expense offset arrangements.

Each Independent Trustee of the fund receives an annual Trustee fee, of which $4,264 as a quarterly retainer, has been allocated to the fund, and an additional fee for each Trustees meeting attended. Trustees also are reimbursed for expenses they incur relating to their services as Trustees.

The fund has adopted a Trustee Fee Deferral Plan (the Deferral Plan) which allows the Trustees to defer the receipt of all or a portion of Trustees fees payable on or after July 1, 1995. The deferred fees remain invested in certain Putnam funds until distribution in accordance with the Deferral Plan.

The fund has adopted an unfunded noncontributory defined benefit pension plan (the Pension Plan) covering all Trustees of the fund who have served as a Trustee for at least five years and were first elected prior to 2004. Benefits under the Pension Plan are equal to 50% of the Trustee’s average annual attendance and retainer fees for the three years ended December 31, 2005. The retirement benefit is payable during a Trustee’s lifetime, beginning the year following retirement, for the number of years of service through December 31, 2006. Pension expense for the fund is included in Trustee compensation and expenses in the Statement of operations. Accrued pension liability is included in Payable for Trustee compensation and expenses in the Statement of assets and liabilities. The Trustees have terminated the Pension Plan with respect to any Trustee first elected after 2003.

The fund has adopted distribution plans (the Plans) with respect to the following share classes pursuant to Rule 12b–1 under the Investment Company Act of 1940. The purpose of the Plans is to compensate Putnam Retail Management Limited Partnership, an indirect wholly-owned subsidiary of Putnam Investments, LLC, for services provided and expenses incurred in distributing shares of the fund. The Plans provide payments by the fund to Putnam Retail Management Limited Partnership at an annual rate of up to the following amounts (Maximum %) of the average net assets attributable to each class. The Trustees have approved payment by the fund at the following annual rate (Approved %) of the average net assets attributable to each class. During the reporting period, the class-specific expenses related to distribution fees were as follows:


	Maximum %	Approved %	Amount
Class A	0.35%	0.25%	$7,714,377
Class B	1.00%	1.00%	144,853
Class C	1.00%	1.00%	221,443
Class R	1.00%	0.50%	10,438
Total			$8,091,111

For the reporting period, Putnam Retail Management Limited Partnership, acting as underwriter, received net commissions of $141,813 from the sale of class A shares and received $770 and $362 in contingent deferred sales charges from redemptions of class B and class C shares, respectively.

A deferred sales charge of up to 1.00% is assessed on certain redemptions of class A shares. For the reporting period, Putnam Retail Management Limited Partnership, acting as underwriter, received $70 on class A redemptions.

38 Sustainable Leaders Fund

Note 3: Purchases and sales of securities

During the reporting period, the cost of purchases and the proceeds from sales, excluding short-term investments, were as follows:


	Cost of purchases	Proceeds from sales
Investments in securities (Long-term)	$783,477,086	$965,822,225
U.S. government securities (Long-term)	—	—
Total	$783,477,086	$965,822,225

The fund may purchase or sell investments from or to other Putnam funds in the ordinary course of business, which can reduce the fund’s transaction costs, at prices determined in accordance with SEC requirements and policies approved by the Trustees. During the reporting period, purchases or sales of long-term securities from or to other Putnam funds, if any, did not represent more than 5% of the fund’s total cost of purchases and/or total proceeds from sales.

Note 4: Capital shares

At the close of the reporting period, there were an unlimited number of shares of beneficial interest authorized. Transactions, including, if applicable, direct exchanges pursuant to share conversions, in capital shares were as follows:


	SIX MONTHS ENDED 12/31/21		YEAR ENDED 6/30/21
Class A	Shares	Amount	Shares	Amount
Shares sold	533,303	$68,610,567	932,896	$106,394,663
Shares issued in connection with
reinvestment of distributions	5,089,320	614,382,658	3,191,476	351,764,495
	5,622,623	682,993,225	4,124,372	458,159,158
Shares repurchased	(1,957,513)	(256,473,392)	(4,294,711)	(490,870,036)
Net increase (decrease)	3,665,110	$426,519,833	(170,339)	$(32,710,878)

	SIX MONTHS ENDED 12/31/21		YEAR ENDED 6/30/21
Class B	Shares	Amount	Shares	Amount
Shares sold	1,347	$121,293	6,059	$494,144
Shares issued in connection with
reinvestment of distributions	50,140	3,987,646	41,795	3,206,536
	51,487	4,108,939	47,854	3,700,680
Shares repurchased	(63,986)	(5,792,497)	(185,476)	(14,829,771)
Net decrease	(12,499)	$(1,683,558)	(137,622)	$(11,129,091)

	SIX MONTHS ENDED 12/31/21		YEAR ENDED 6/30/21
Class C	Shares	Amount	Shares	Amount
Shares sold	39,240	$4,046,610	77,478	$7,102,993
Shares issued in connection with
reinvestment of distributions	62,427	5,723,948	40,814	3,539,003
	101,667	9,770,558	118,292	10,641,996
Shares repurchased	(44,227)	(4,505,714)	(185,821)	(16,700,918)
Net increase (decrease)	57,440	$5,264,844	(67,529)	$(6,058,922)

Sustainable Leaders Fund 39


	SIX MONTHS ENDED 12/31/21		YEAR ENDED 6/30/21
Class R	Shares	Amount	Shares	Amount
Shares sold	2,676	$337,486	19,273	$2,104,853
Shares issued in connection with
reinvestment of distributions	3,912	448,956	6,914	727,197
	6,588	786,442	26,187	2,832,050
Shares repurchased	(1,966)	(247,983)	(81,656)	(8,916,785)
Net increase (decrease)	4,622	$538,459	(55,469)	$(6,084,735)

	SIX MONTHS ENDED 12/31/21		YEAR ENDED 6/30/21
Class R6	Shares	Amount	Shares	Amount
Shares sold	84,082	$12,412,818	97,907	$12,502,229
Shares issued in connection with
reinvestment of distributions	86,641	11,600,345	48,611	5,877,078
	170,723	24,013,163	146,518	18,379,307
Shares repurchased	(43,598)	(6,237,781)	(115,251)	(14,205,014)
Net increase	127,125	$17,775,382	31,267	$4,174,293

	SIX MONTHS ENDED 12/31/21		YEAR ENDED 6/30/21
Class Y	Shares	Amount	Shares	Amount
Shares sold	395,326	$57,969,352	880,112	$110,878,056
Shares issued in connection with
reinvestment of distributions	340,086	45,411,668	179,072	21,599,617
	735,412	103,381,020	1,059,184	132,477,673
Shares repurchased	(270,144)	(38,449,223)	(614,480)	(76,994,938)
Net increase	465,268	$64,931,797	444,704	$55,482,735

Note 5: Affiliated transactions

Transactions during the reporting period with any company which is under common ownership or control were as follows:


					Shares
					outstanding
					and fair
	Fair value as	Purchase	Sale	Investment	value as
Name of affiliate	of 6/30/21	cost	proceeds	income	of 12/31/21
Short-term investments
Putnam Cash Collateral
Pool, LLC^*	$83,798,975	$553,069,524	$581,999,994	$47,657	$54,868,505
Putnam Short Term
Investment Fund^**	182,522,844	493,004,429	565,443,118	57,593	110,084,155
Total Short-term
investments	$266,321,819	$1,046,073,953	$1,147,443,112	$105,250	$164,952,660

^*No management fees are charged to Putnam Cash Collateral Pool, LLC (Note 1).Investment income shown is included in securities lending income on the Statement of operations. There were no realized or unrealized gains or losses during the period.

^**Management fees charged to Putnam Short Term Investment Fund have been waived by Putnam Management.

There were no realized or unrealized gains or losses during the period.

40 Sustainable Leaders Fund

Note 6: Market, credit and other risks

In the normal course of business, the fund trades financial instruments and enters into financial transactions where risk of potential loss exists due to changes in the market (market risk) or failure of the contracting party to the transaction to perform (credit risk). The fund may be exposed to additional credit risk that an institution or other entity with which the fund has unsettled or open transactions will default. Investments in foreign securities involve certain risks, including those related to economic instability, unfavorable political developments, and currency fluctuations.

Beginning in January 2020, global financial markets have experienced, and may continue to experience, significant volatility resulting from the spread of a virus known as Covid–19. The outbreak of Covid–19 has resulted in travel and border restrictions, quarantines, supply chain disruptions, lower consumer demand, and general market uncertainty. The effects of Covid–19 have adversely affected, and may continue to adversely affect, the global economy, the economies of certain nations, and individual issuers, all of which may negatively impact the fund’s performance.

Note 7: Summary of derivative activity

The volume of activity for the reporting period for any derivative type that was held during the period is listed below and was based on an average of the holdings at the end of each fiscal quarter:


Forward currency contracts (contract amount)	$145,800,000
Warrants (number of warrants)	32,000

The following is a summary of the fair value of derivative instruments as of the close of the reporting period:


Fair value of derivative instruments as of the close of the reporting period
	ASSET DERIVATIVES		LIABILITY DERIVATIVES
Derivatives not
accounted for as	Statement of		Statement of
hedging instruments	assets and		assets and
under ASC 815	liabilities location	Fair value	liabilities location	Fair value
Foreign exchange
contracts	Receivables	$—	Payables	$753,508
Total		$—		$753,508

The following is a summary of realized and change in unrealized gains or losses of derivative instruments in the Statement of operations for the reporting period (Note 1):


Amount of realized gain or (loss) on derivatives recognized in net gain or (loss) on investments
		Forward
Derivatives not accounted for as hedging		currency
instruments under ASC 815	Warrants	contracts	Total
Foreign exchange contracts	$—	10,963,065	$10,963,065
Equity contracts	—	—	—
Total	$—	$10,963,065	$10,963,065

Change in unrealized appreciation or (depreciation) on derivatives recognized in net gain or (loss)
on investments
		Forward
Derivatives not accounted for as hedging		currency
instruments under ASC 815	Warrants	contracts	Total
Foreign exchange contracts	$—	(4,856,209)	$(4,856,209)
Equity contracts	—	—	—
Total	$—	$(4,856,209)	$(4,856,209)

Sustainable Leaders Fund 41

Note 8: Offsetting of financial and derivative assets and liabilities

The following table summarizes any derivatives, repurchase agreements and reverse repurchase agreements, at the end of the reporting period, that are subject to an enforceable master netting agreement or similar agreement. For securities lending transactions or borrowing transactions associated with securities sold short, if any, see Note 1. For financial reporting purposes, the fund does not offset financial assets and financial liabilities that are subject to the master netting agreements in the Statement of assets and liabilities.


			HSBC
	Bank of		Bank USA,	JPMorgan	State Street
	America	Barclays	National	Chase Bank	Bank and
	N.A.	Bank PLC	Association	N.A.	Trust Co.	UBS AG	Total
Assets:
Forward currency	$—	$—	$—	$—	$—	$—	$—
contracts^#
Total Assets	$—	$—	$—	$—	$—	$—	$—
Liabilities:
Forward currency	253,417	67,059	38,944	174,638	62,127	157,323	753,508
contracts^#
Total Liabilities	$253,417	$67,059	$38,944	$174,638	$62,127	$157,323	$753,508
Total Financial and
Derivative	$(253,417)	$(67,059)	$(38,944)	$(174,638)	$(62,127)	$(157,323)	$(753,508)
Net Assets
Total collateral
received	$(110,945)	$—	$—	$18,000	$29,901	$83,000
(pledged)^†##
Net amount	$(142,472)	$(67,059)	$(38,944)	$(192,638)	$(92,028)	$(240,323)
Controlled collateral
received (including	$—	$—	$—	$18,000	$29,901	$83,000	$130,901
TBA commitments)^**
Uncontrolled
collateral received	$—	$—	$—	$—	$—	$—	$—
Collateral (pledged)
(including TBA	$(110,945)	$—	$—	$—	$—	$—	$(110,945)
commitments)^**

^**Included with Investments in securities on the Statement of assets and liabilities.

^†Additional collateral may be required from certain brokers based on individual agreements.

^#Covered by master netting agreement (Note 1).

^##Any over-collateralization of total financial and derivative net assets is not shown. Collateral may include amounts related to unsettled agreements.

42 Sustainable Leaders Fund

Putnam family of funds

The following is a list of Putnam’s open-end mutual funds offered to the public. Investors should carefully consider the investment objective, risks, charges, and expenses of a fund before investing. For a prospectus, or a summary prospectus if available, containing this and other information for any Putnam fund or product, contact your financial advisor or call Putnam Investor Services at 1-800-225-1581. Please read the prospectus carefully before investing.


Blend	Income
Emerging Markets Equity Fund	Convertible Securities Fund
Focused Equity Fund	Diversified Income Trust
Focused International Equity Fund	Floating Rate Income Fund
International Capital Opportunities Fund	Global Income Trust
International Equity Fund	Government Money Market Fund^*
Multi-Cap Core Fund	High Yield Fund
Research Fund	Income Fund
	Money Market Fund^†
Global Sector	Mortgage Opportunities Fund
Global Health Care Fund	Mortgage Securities Fund
Global Technology Fund	Short Duration Bond Fund
	Ultra Short Duration Income Fund
Growth
Growth Opportunities Fund	Tax-free Income
Small Cap Growth Fund	Intermediate-Term Municipal Income Fund
Sustainable Future Fund	Short-Term Municipal Income Fund
Sustainable Leaders Fund	Strategic Intermediate Municipal Fund
	Tax Exempt Income Fund
Value	Tax-Free High Yield Fund
International Value Fund
Large Cap Value Fund	State tax-free income funds:^‡
Small Cap Value Fund	California, Massachusetts, Minnesota,
	New Jersey, New York, Ohio, and Pennsylvania

Sustainable Leaders Fund 43


Absolute Return	Asset Allocation (cont.)
Fixed Income Absolute Return Fund	Putnam Retirement Advantage Maturity Fund
Multi-Asset Absolute Return Fund	Putnam Retirement Advantage 2065 Fund
	Putnam Retirement Advantage 2060 Fund
Putnam PanAgora^§	Putnam Retirement Advantage 2055 Fund
Putnam PanAgora Risk Parity Fund	Putnam Retirement Advantage 2050 Fund
	Putnam Retirement Advantage 2045 Fund
Asset Allocation	Putnam Retirement Advantage 2040 Fund
Dynamic Risk Allocation Fund	Putnam Retirement Advantage 2035 Fund
George Putnam Balanced Fund	Putnam Retirement Advantage 2030 Fund
	Putnam Retirement Advantage 2025 Fund
Dynamic Asset Allocation Balanced Fund
Dynamic Asset Allocation Conservative Fund	RetirementReady^® Maturity Fund
Dynamic Asset Allocation Growth Fund	RetirementReady^® 2065 Fund
	RetirementReady^® 2060 Fund
	RetirementReady^® 2055 Fund
	RetirementReady^® 2050 Fund
	RetirementReady^® 2045 Fund
	RetirementReady^® 2040 Fund
	RetirementReady^® 2035 Fund
	RetirementReady^® 2030 Fund
	RetirementReady^® 2025 Fund

^* You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.

^† You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The fund may impose a fee upon sale of your shares or may temporarily suspend your ability to sell shares if the fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.

^‡ Not available in all states.

^§ Sub-advised by PanAgora Asset Management.

Check your account balances and the most recent month-end performance in the Individual Investors section at putnam.com.

44 Sustainable Leaders Fund

Fund information

Founded over 80 years ago, Putnam Investments was built around the concept that a balance between risk and reward is the hallmark of a well-rounded financial program. We manage funds across income, value, blend, growth, sustainable, asset allocation, absolute return, and global sector categories.


Investment Manager	Trustees	Richard T. Kircher
Putnam Investment	Kenneth R. Leibler, Chair	Vice President and BSA
Management, LLC	Liaquat Ahamed	Compliance Officer
100 Federal Street	Ravi Akhoury
Boston, MA 02110	Barbara M. Baumann	Martin Lemaire
	Katinka Domotorffy	Vice President and
Investment Sub-Advisor	Catharine Bond Hill	Derivatives Risk Manager
Putnam Investments Limited	Paul L. Joskow
16 St James’s Street	George Putnam, III	Susan G. Malloy
London, England SW1A 1ER	Robert L. Reynolds	Vice President and
	Manoj P. Singh	Assistant Treasurer
Marketing Services	Mona K. Sutphen
Putnam Retail Management		Alan G. McCormack
Limited Partnership	Officers	Vice President and
100 Federal Street	Robert L. Reynolds	Derivatives Risk Manager
Boston, MA 02110	President
		Denere P. Poulack
Custodian	James F. Clark	Assistant Vice President,
State Street Bank	Vice President, Chief Compliance	Assistant Clerk, and
and Trust Company	Officer, and Chief Risk Officer	Assistant Treasurer

Legal Counsel	Nancy E. Florek	Janet C. Smith
Ropes & Gray LLP	Vice President, Director of	Vice President,
	Proxy Voting and Corporate	Principal Financial Officer,
	Governance, Assistant Clerk,	Principal Accounting Officer,
	and Assistant Treasurer	and Assistant Treasurer

	Michael J. Higgins	Stephen J. Tate
	Vice President, Treasurer,	Vice President and
	and Clerk	Chief Legal Officer

	Jonathan S. Horwitz	Mark C. Trenchard
	Executive Vice President,	Vice President
	Principal Executive Officer,
	and Compliance Liaison

This report is for the information of shareholders of Putnam Sustainable Leaders Fund. It may also be used as sales literature when preceded or accompanied by the current prospectus, the most recent copy of Putnam’s Quarterly Performance Summary, and Putnam’s Quarterly Ranking Summary. For more recent performance, please visit putnam.com. Investors should carefully consider the investment objectives, risks, charges, and expenses of a fund, which are described in its prospectus. For this and other information or to request a prospectus or summary prospectus, call 1-800-225-1581 toll free. Please read the prospectus carefully before investing. The fund’s Statement of Additional Information contains additional information about the fund’s Trustees and is available without charge upon request by calling 1-800-225-1581.


	Item 2. Code of Ethics:


	Not applicable


	Item 3. Audit Committee Financial Expert:


	Not applicable


	Item 4. Principal Accountant Fees and Services:


	Not applicable


	Item 5. Audit Committee of Listed Registrants


	Not applicable


	Item 6. Schedule of Investments:


	The registrant’s schedule of investments in unaffiliated issuers is included in the report to shareholders in Item 1 above.


	Item 7. Disclosure of Proxy Voting Policies and Procedures For Closed-End Management Investment Companies:


	Not applicable


	Item 8. Portfolio Managers of Closed-End Investment Companies


	Not Applicable


	Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers:


	Not applicable


	Item 10. Submission of Matters to a Vote of Security Holders:


	Not applicable


	Item 11. Controls and Procedures:

(a) The registrant’s principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant’s disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms.


	(b) Changes in internal control over financial reporting: Not applicable


	Item 12. Disclosures of Securities Lending Activities for Closed-End Investment Companies:


	Not Applicable


	Item 13. Exhibits:


	(a)(1) Not applicable


	(a)(2) Separate certifications for the principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are filed herewith.


	(b) The certifications required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended, are filed herewith.


	SIGNATURES


	Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	Putnam Sustainable Leaders Fund


	By (Signature and Title):


	/s/ Janet C. Smith Janet C. Smith Principal Accounting Officer


	Date: February 25, 2022


	Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


	By (Signature and Title):


	/s/ Jonathan S. Horwitz Jonathan S. Horwitz Principal Executive Officer


	Date: February 25, 2022


	By (Signature and Title):


	/s/ Janet C. Smith Janet C. Smith Principal Financial Officer


	Date: February 25, 2022

EX-99.CERT 2 b_852certifications.htm CERTIFICATIONS b_852certifications.htm


	Certifications
	I, Jonathan S. Horwitz, the Principal Executive Officer of the funds listed on Attachment A, certify that:
	1. I have reviewed each report on Form N-CSR of the funds listed on Attachment A:
	2. Based on my knowledge, each report does not contain any untrue statements of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by each report;
	3. Based on my knowledge, the financial statements, and other financial information included in each report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in each report;
	4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
	a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which each report is being prepared;
	b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of each report based on such evaluation; and
	d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by the registrant’s report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
	5. The registrant’s other certifying officer and I have disclosed to each registrant’s auditors and the audit committee of each registrant’s board of directors (or persons performing the equivalent functions):
	a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect each registrant’s ability to record, process, summarize, and report financial information; and
	b) any fraud, whether or not material, that involves management or other employees who have a significant role in each registrant’s internal control over financial reporting.
	Date: February 25, 2022
	/s/ Jonathan S. Horwitz
	_______________________
	Jonathan S. Horwitz
	Principal Executive Officer
	Certifications
	I, Janet C. Smith, the Principal Financial Officer of the funds listed on Attachment A, certify that:
	1. I have reviewed each report on Form N-CSR of the funds listed on Attachment A:
	2. Based on my knowledge, each report does not contain any untrue statements of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by each report;
	3. Based on my knowledge, the financial statements, and other financial information included in each report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in each report;
	4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
	a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which each report is being prepared;
	b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of each report based on such evaluation; and
	d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by the registrant’s report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
	5. The registrant’s other certifying officer and I have disclosed to each registrant’s auditors and the audit committee of each registrant’s board of directors (or persons performing the equivalent functions):
	a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect each registrant’s ability to record, process, summarize, and report financial information; and
	b) any fraud, whether or not material, that involves management or other employees who have a significant role in each registrant’s internal control over financial reporting.
	Date: February 25, 2022
	/s/ Janet C. Smith
	_______________________
	Janet C. Smith
	Principal Financial Officer
	Attachment A
	Period (s) ended December 31, 2021
	Putnam International Equity Fund
	Putnam International Value Fund
	Putnam Small Cap Growth Fund
	Putnam Sustainable Leaders Fund
	Putnam VT Diversified Income Fund
	Putnam VT Emerging Markets Equity Fund
	Putnam VT Focused International Equity Fund
	Putnam VT George Putnam Balanced Fund
	Putnam VT Global Asset Allocation Fund
	Putnam VT Global Health Care Fund
	Putnam VT Government Money Market Fund
	Putnam VT Growth Opportunities Fund
	Putnam VT High Yield Fund
	Putnam VT Income Fund
	Putnam VT International Equity Fund
	Putnam VT International Value Fund
	Putnam VT Large Cap Value Fund
	Putnam VT Mortgage Securities Fund
	Putnam VT Multi-Asset Absolute Return Fund
	Putnam VT Multi-Cap Core Fund
	Putnam VT Research Fund
	Putnam VT Small Cap Growth Fund
	Putnam VT Small Cap Value Fund
	Putnam VT Sustainable Future Fund
	Putnam VT Sustainable Leaders Fund

EX-99.906 CERT 3 c_852noscertification.htm 906 CERTIFICATIONS c_852noscertification.htm


	Section 906 Certifications
	I, Jonathan S. Horwitz, the Principal Executive Officer of the Funds listed on Attachment A, certify that, to my knowledge:
	1. The form N-CSR of the Funds listed on Attachment A for the period ended December 31, 2021 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
	2. The information contained in the Form N-CSR of the Funds listed on Attachment A for the period ended December 31, 2021 fairly presents, in all material respects, the financial condition and results of operations of the Funds listed on Attachment A.
	Date: February 25, 2022
	/s/ Jonathan S. Horwitz
	______________________
	Jonathan S. Horwitz
	Principal Executive Officer
	Section 906 Certifications
	I, Janet C. Smith, the Principal Financial Officer of the Funds listed on Attachment A, certify that, to my knowledge:
	1. The form N-CSR of the Funds listed on Attachment A for the period ended December 31, 2021 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
	2. The information contained in the Form N-CSR of the Funds listed on Attachment A for the period ended December 31, 2021 fairly presents, in all material respects, the financial condition and results of operations of the Funds listed on Attachment A.
	Date: February 25, 2022
	/s/ Janet C. Smith
	______________________
	Janet C. Smith
	Principal Financial Officer
	Attachment A
	Period (s) ended December 31, 2021
	Putnam International Equity Fund
	Putnam International Value Fund
	Putnam Small Cap Growth Fund
	Putnam Sustainable Leaders Fund
	Putnam VT Diversified Income Fund
	Putnam VT Emerging Markets Equity Fund
	Putnam VT Focused International Equity Fund
	Putnam VT George Putnam Balanced Fund
	Putnam VT Global Asset Allocation Fund
	Putnam VT Global Health Care Fund
	Putnam VT Government Money Market Fund
	Putnam VT Growth Opportunities Fund
	Putnam VT High Yield Fund
	Putnam VT Income Fund
	Putnam VT International Equity Fund
	Putnam VT International Value Fund
	Putnam VT Large Cap Value Fund
	Putnam VT Mortgage Securities Fund
	Putnam VT Multi-Asset Absolute Return Fund
	Putnam VT Multi-Cap Core Fund
	Putnam VT Research Fund
	Putnam VT Small Cap Growth Fund
	Putnam VT Small Cap Value Fund
	Putnam VT Sustainable Future Fund
	Putnam VT Sustainable Leaders Fund


Message from the Trustees	1
About the fund	2
Interview with your fund’s portfolio managers	6
Your fund’s performance	10
Your fund’s expenses	12
Consider these risks before investing	14
Terms and definitions	15
Other information for shareholders	17
Financial statements	18


	Annual
	average		Annual		Annual		Annual
	(life of fund)	10 years	average	5 years	average	3 years	average	1 year	6 months
Class A (8/31/90)
Before sales charge	12.77%	431.77%	18.19%	175.15%	22.44%	115.14%	29.09%	23.26%	8.00%
After sales charge	12.56	401.19	17.49	159.33	21.00	102.77	26.57	16.17	1.79
Class B (3/1/93)
Before CDSC	12.55	400.75	17.48	165.04	21.52	110.35	28.13	22.34	7.60
After CDSC	12.55	400.75	17.48	163.04	21.34	107.35	27.52	17.34	3.02
Class C (7/26/99)
Before CDSC	12.55	400.71	17.48	165.05	21.53	110.38	28.14	22.33	7.60
After CDSC	12.55	400.71	17.48	165.05	21.53	110.38	28.14	21.33	6.67
Class R (1/21/03)
Net asset value	12.49	418.61	17.89	171.74	22.13	113.53	28.77	22.96	7.87
Class R6 (5/22/18)
Net asset value	13.03	447.35	18.53	179.70	22.84	117.42	29.55	23.67	8.19
Class Y (7/19/94)
Net asset value	13.02	445.25	18.48	178.62	22.74	116.76	29.42	23.56	8.14


	Annual
	average		Annual		Annual		Annual
	(life of fund)	10 years	average	5 years	average	3 years	average	1 year	6 months
S&P 500 Index	11.24%	362.57%	16.55%	133.41%	18.47%	100.37%	26.07%	28.71%	11.67%
Russell 3000 Growth
Index - S&P 500 Index	11.08	414.53	17.80	162.18	21.26	106.70	27.38	28.71	11.67
Linked Benchmark^*
Lipper Large-Cap
Core Funds category	10.77	321.62	15.36	125.48	17.56	95.09	24.86	26.52	10.04
average^†


	Class A	Class B	Class C	Class R	Class R6	Class Y
Total annual operating expenses for the
fiscal year ended 6/30/21	1.05%	1.80%	1.80%	1.30%	0.70%	0.80%
Annualized expense ratio for the
six-month period ended 12/31/21^*	1.03%	1.78%	1.78%	1.28%	0.70%	0.78%


	Class A	Class B	Class C	Class R	Class R6	Class Y
Expenses paid per $1,000^*†	$5.40	$9.31	$9.31	$6.71	$3.67	$4.09
Ending value (after expenses)	$1,080.00	$1,076.00	$1,076.00	$1,078.70	$1,081.90	$1,081.40


	CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES


	Exact name of registrant as specified in charter:	Putnam Sustainable Leaders Fund


	Address of principal executive offices:	100 Federal Street, Boston, Massachusetts 02110


	Name and address of agent for service:	Stephen Tate, Vice President 100 Federal Street Boston, Massachusetts 02110


	Copy to:	Bryan Chegwidden, Esq. Ropes & Gray LLP 1211 Avenue of the Americas New York, New York 10036


	Registrant’s telephone number, including area code:	(617) 292-1000


	The following is a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Investment Company Act of 1940:


COMMON STOCKS (98.4%)*	Shares	Value
Banks (4.0%)
Bank of America Corp.	3,340,726	$148,628,900
First Republic Bank	563,000	116,265,130
		264,894,030
Beverages (1.4%)
Heineken NV (Netherlands)	820,435	92,341,659
Zevia PBC Class A ^{† S}	652,873	4,602,755
		96,944,414
Biotechnology (2.7%)
Amgen, Inc.	361,100	81,236,667
Ginkgo Bioworks Holdings, Inc.	5,802,091	48,215,376
Regeneron Pharmaceuticals, Inc. ^†	87,400	55,194,848
		184,646,891
Building products (1.9%)
Johnson Controls International PLC	1,591,200	129,380,472
		129,380,472
Capital markets (3.2%)
BlackRock, Inc.	132,997	121,766,733
KKR & Co., Inc.	1,282,000	95,509,000
		217,275,733
Chemicals (5.4%)
Ecolab, Inc.	298,500	70,025,115
Koninklijke DSM NV (Netherlands)	430,522	97,049,528
Linde PLC	323,700	112,139,391
Novozymes A/S Class B (Denmark)	1,078,579	88,703,032
		367,917,066
Containers and packaging (2.2%)
Avery Dennison Corp.	482,300	104,451,711
Ball Corp.	500,600	48,192,762
		152,644,473
Electric utilities (1.5%)
NextEra Energy, Inc.	1,101,800	102,864,048
		102,864,048
Entertainment (1.8%)
Walt Disney Co. (The) ^†	800,800	124,035,912
		124,035,912
Equity real estate investment trusts (REITs) (2.1%)
American Tower Corp. ^R	256,700	75,084,750
Boston Properties, Inc. ^R	591,400	68,117,452
		143,202,202
Food and staples retail (1.7%)
Walmart, Inc.	793,600	114,825,984
		114,825,984
Food products (1.1%)
McCormick & Co., Inc. (non-voting shares)	772,700	74,650,547
		74,650,547


COMMON STOCKS (98.4%)* cont.	Shares	Value
Health-care equipment and supplies (2.6%)
Cooper Cos., Inc. (The) ^S	232,500	$97,403,550
Medtronic PLC	792,700	82,004,815
		179,408,365
Health-care providers and services (1.8%)
CVS Health Corp.	1,222,700	126,133,732
		126,133,732
Hotels, restaurants, and leisure (4.1%)
Chipotle Mexican Grill, Inc. ^†	57,600	100,699,200
Hilton Worldwide Holdings, Inc. ^†	797,036	124,329,646
Vail Resorts, Inc.	172,400	56,529,960
		281,558,806
Household durables (—%)
HC Brillant Services GmbH (acquired 8/2/13, cost $69) (Private) (Germany) ^{† ∆∆ F}	104	—
		—
Independent power and renewable electricity producers (1.3%)
AES Corp. (The)	3,569,000	86,726,700
		86,726,700
Industrial conglomerates (2.8%)
Honeywell International, Inc.	476,853	99,428,619
Roper Technologies, Inc.	184,000	90,502,240
		189,930,859
Insurance (2.6%)
AXA SA (France)	3,525,410	105,098,157
Prudential PLC (United Kingdom)	4,375,794	75,486,797
		180,584,954
Interactive media and services (0.4%)
Bumble, Inc. Class A ^{† S}	720,759	24,404,900
		24,404,900
Internet and direct marketing retail (5.2%)
Amazon.com, Inc. ^†	92,177	307,349,458
Etsy, Inc. ^†	202,155	44,259,816
		351,609,274
IT Services (4.5%)
Fidelity National Information Services, Inc.	687,000	74,986,050
PayPal Holdings, Inc. ^†	227,800	42,958,524
Shopify, Inc. Class A (Canada) ^†	39,900	54,957,861
Visa, Inc. Class A	617,800	133,883,438
		306,785,873
Life sciences tools and services (4.4%)
Danaher Corp.	475,300	156,378,453
Thermo Fisher Scientific, Inc.	213,700	142,589,188
		298,967,641
Machinery (1.9%)
Deere & Co.	186,700	64,017,563
Ingersoll Rand, Inc.	1,102,300	68,199,301
		132,216,864


U.S. TREASURY OBLIGATIONS (—%)*	Principal amount	Value
U.S. Treasury Notes 1.125%, 2/28/27 ⁱ	$30,000	$29,901
Total U.S. treasury obligations (cost $29,901)		$29,901


	UNITED STATES SECURITIES AND EXCHANGE COMMISSION


	Washington, D.C. 20549


	FORM N-CSR


	Investment Company Act file number:	(811-06128)


CONVERTIBLE PREFERRED STOCKS (—%)*	Shares	Value
UNEXT.com, LLC $0.00 cv. pfd. (acquired 4/14/00, cost $10,451,238) (Private) ^{† ∆∆ F}	125,000	$—
Total convertible preferred stocks (cost $10,451,238)		$—


SHORT-TERM INVESTMENTS (2.4%)*		Principal amount/ shares	Value
Putnam Cash Collateral Pool, LLC 0.12% ^d	Shares	54,868,505	$54,868,505
Putnam Short Term Investment Fund Class P 0.13% ^L	Shares	110,084,155	110,084,155
State Street Institutional U.S. Government Money Market Fund, Premier Class 0.03% ^P	Shares	101,000	101,000
U.S. Treasury Bills 0.113%, 5/19/22 ^∆		$200,000	199,926
Total short-term investments (cost $165,253,575)			$165,253,586


TOTAL INVESTMENTS
Total investments (cost $3,776,927,979)	$6,877,545,663


Notes to the fund’s portfolio
	Unless noted otherwise, the notes to the fund’s portfolio are for the close of the fund’s reporting period, which ran from July 1, 2021 through December 31, 2021 (the reporting period). Within the following notes to the portfolio, references to “Putnam Management” represent Putnam Investment Management, LLC, the fund’s manager, an indirect wholly-owned subsidiary of Putnam Investments, LLC and references to “ASC 820” represent Accounting Standards Codification 820 Fair Value Measurements and Disclosures.
^*	Percentages indicated are based on net assets of $6,818,117,709.
^†	This security is non-income-producing.
^∆∆	This security is restricted with regard to public resale. The total fair value of this security and any other restricted securities (excluding 144A securities), if any, held at the close of the reporting period was $—.
^∆	This security, in part or in entirety, was pledged and segregated with the custodian for collateral on certain derivative contracts at the close of the reporting period. Collateral at period end totaled $110,945 and is included in Investments in securities on the Statement of assets and liabilities (Notes 1 and 8).
^d	Affiliated company. See Notes 1 and 5 to the financial statements regarding securities lending. The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period.
^F	This security is valued by Putnam Management at fair value following procedures approved by the Trustees. Securities are classified as Level 3 for ASC 820 based on the securities’ valuation inputs (Note 1).
ⁱ	This security was pledged, or purchased with cash that was pledged, to the fund for collateral on certain derivative contracts (Note 1).
^L	Affiliated company (Note 5). The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period.
^P	This security was pledged, or purchased with cash that was pledged, to the fund for collateral on certain derivative contracts. The rate quoted in the security description is the annualized 7-day yield of the fund at the close of the reporting period.
^R	Real Estate Investment Trust.
^S	Security on loan, in part or in entirety, at the close of the reporting period (Note 1).
	At the close of the reporting period, the fund maintained liquid assets totaling $628,230 to cover certain derivative contracts.
	The dates shown on debt obligations are the original maturity dates.
	Unless otherwise noted, the rates quoted in Short-term investments security descriptions represent the weighted average yield to maturity.


FORWARD CURRENCY CONTRACTS at 12/31/21 (aggregate face value $143,399,085) (Unaudited)
Counterparty	Currency	Contract type*	Delivery date	Value	Aggregate face value	Unrealized appreciation/ (depreciation)
Bank of America N.A.
	British Pound	Sell	3/16/22	$15,905,874	$15,652,457	$(253,417)
Barclays Bank PLC
	British Pound	Sell	3/16/22	4,151,565	4,084,506	(67,059)
HSBC Bank USA, National Association
	British Pound	Sell	3/16/22	2,447,693	2,408,749	(38,944)
JPMorgan Chase Bank N.A.
	Euro	Sell	3/16/22	54,151,672	53,977,034	(174,638)
State Street Bank and Trust Co.
	Euro	Sell	3/16/22	18,779,317	18,717,190	(62,127)
UBS AG
	Euro	Sell	3/16/22	48,716,472	48,559,149	(157,323)
Unrealized appreciation						—
Unrealized (depreciation)						(753,508)
Total						$(753,508)
* The exchange currency for all contracts listed is the United States Dollar.