Robeco has said it will be launching a range of public markets transition investing strategies in the coming months, starting with Asian emerging market equities and bonds.
Robeco defines transition investing as “investing in strategies that focus on preparing for, being aligned to, benefitting from, and/or contributing to the transition to a low-carbon economy”. This is in contrast to investing in companies that are already sustainable.
Investment opportunities are most stark in Asia and emerging markets, it said, which is where it would start with its strategies. Asia accounts for half of the world’s greenhouse gas emissions and is home to about 60% of the global population but has struggled to draw the financial flows towards investments supporting a low energy transition.
Robeco said its new strategies would be seeking alpha in all industries that are making the sustainability transition, including those in high-carbon intensive sectors.
“Today, Robeco offers multiple strategies with clear climate targets and funds investing in transition enablers,” said Mark van der Kroft, chief investment officer at Robeco. “However, recognising the urgent need for transition finance to support global sustainability goals, Robeco is pleased to also introduce investing in actual transition assets in public markets.
“Our commitment stems from the understanding that effective transition is about more than just investing in green technologies”
Mark van der Kroft, CIO at Robeco
“Our commitment stems from the understanding that effective transition is about more than just investing in green technologies; it’s about driving meaningful change across all sectors,” he added.
According to Robeco, the asset manager is able to apply transition investing to public markets because of the proprietary forward-looking metrics it has developed that can “credibly distinguish transition leaders from laggards”.
Thu Ha Chow, head of fixed income Asia at Robeco, said: “Investments have always been about forward-looking metrics, and this applies as much to sustainability metrics as it does to financial metrics. Our frameworks allow for diversified, balanced portfolios without imbedded sector biases.
“Our approach emphasises a clear intention to contribute to real-world transition, alongside measurable outcomes and credible progress reporting.”
Last month Robeco’s head of sustainability described the departure of five of the world’s biggest asset managers from Climate Action 100+ as revealing of an “inherent contradiction” in their approach to net zero, accusing them of ”doubling down on transition finance, seemingly as an alternative to engaging on real-world emissions reductions”.
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