Robeco, a prominent global asset manager, has launched an innovative set of climate indices that meet the changing demands of today’s investors focused on climate action and sustainability. These new indices—in particular, the Robeco Developed Low-Carbon Climate Leaders Tilt Equities Index, the Robeco Developed Paris-Aligned Climate Leaders Tilt Equities Index, and the Robeco Developed Climate Leaders Equities Index—represent a leap forward in forward-looking climate data integration and equip investors with advanced means of aligning their portfolios toward both climate, sustainability, and financial goals.
As climate investing continues to evolve, the demand for more from climate indices goes beyond the delivery of solely backward-looking carbon emissions data. Investors want metrics that predict future climate impacts, in a direction that is aligned with global climate goals. The new Robeco indices are an answer to this demand, as they are designed to include advanced climate metrics developed in-house. The metrics include the Climate Traffic Light, which indicates whether the company is aligned with the Paris Agreement or not, the SDG framework to flag climate solutions, and Climate Beta, for the assessment of climate transition risk. Robeco tries to integrate these forward-looking indicators altogether to provide investors with an in-depth forward-looking view of the potential future climate impact that could arise from a company.
This is an innovative approach, underlined by Lucian Peppelenbos, Climate Strategist at Robeco: “We decided years ago to not only focus on carbon emissions data when looking at climate investing. We invested in resources to also evaluate other climate characteristics of companies, such as their alignment with the Paris Agreement, whether companies provide solutions to lower the world’s future emissions, and their level of climate transition risk. It is great to see our climate IP now being made available to an even wider investor audience.”
The Robeco Developed Low-Carbon Climate Leaders Tilt Equities Index is a low-tracking error solution for those investors who seek to reduce their exposure to climate risk while remaining within the temperature goals as set forth by the Paris Agreement. This index offers a balanced approach in order to have a minimum deviation from traditional equity benchmarks by incorporating climate factors.
The Robeco Developed Paris-Aligned Climate Leaders Tilt Equities Index is fully compliant with the EU Paris-Aligned Benchmark requirements for those investors seeking exposure to the leaders in climate solutions. The index offers additional forward-looking metrics to investors interested in actively supporting companies offering climate solutions and who are interested in a more advanced climate investment strategy.
The Robeco Developed Climate Leaders Equities Index offers concentrated exposure to those companies that are likely to be at the forefront of the transition to a low-carbon economy. As such, this customized index targets investors who seek to capture growth potential from climate transition leaders and value drivers in global sustainability.
The ability to customize solutions is one of the hallmarks of the new indices from Robeco. The company offers tailored solutions, which can also be adjusted according to a given investment universe or even decarbonization targets. This flexibility is treated through the underlying algorithm in such a manner that turnover remains low while liquidity is high-twin parameters of great interest to passive investors desiring stability and accessibility in their investments. Joop Huij, Head of Robeco Indices: “We are pleased to go live with this climate index family as it provides investors with a more advanced climate solution compared to indices that focus purely on carbon emissions. Our approach in constructing these indices is to include turnover and liquidity aspects such that the produced indices are highly investable.”. We welcome an active dialogue with clients to develop tailored indices aligned with their goals on climate and finance.
The launch of Robeco’s new climate index family represents a significant quantum leap in the climate investing arena. Indeed, Robeco is adequately prepared to cater to the growing demand by different investors as climate considerations now play an increasingly important role in their investment decisions. These indices will thus constitute indispensable tools in integrating forward-looking climate data into their investment strategies and will help them on their way to aligning their portfolios with their climate objectives while pursuing financial objectives.
In this perspective, Robeco stands at the forefront of innovation that corresponds with the rising importance attached to the integration of all-inclusive climate metrics into investment practices, where climate action is turning topical. The new indices will afford investors a sophisticated palette that caters to a variety of climate strategies with increased precision, better aligned with general goals of sustainability and care for the environment.