Combating climate change is humanity’s collective responsibility. While governments may be in the driver’s seat, investors can – and should – also play a leading role. They have the power to channel money towards those companies making a difference to climate change. For instance, the threat of divestment combined with engagement is particularly effective with listed companies.
Asset owners and managers are increasingly acknowledge their own accountability. Almost one in three global investors identify ‘institutional investors’ as bearing the most responsibility for reducing carbon emissions to meet the Paris Agreement targets. Only two other categories of stakeholders – governments & regulators and public & private companies – are cited more frequently.1
One of the biggest risks for asset owners and managers is not seeing the opportunities these vast issues present to create a more sustainable planet. The search for solutions to climate risk is driving technological innovation at an unprecedented rate. If investors don’t seize these chances by investing in sustainable innovations, it won’t just be their bottom line they hurt.
“Rather than treating sustainable investing as niche, we must go all-in and make it the standard way of doing business,” says Robeco’s CEO Gilbert Van Hassel. “It requires us to act together as an industry. No sustainability challenge will be solved if we don’t act collectively. A planet that is safe and healthy can only exist if sustainable investing becomes the rule rather than the exception.”
In December 2020, Robeco committed to achieving net zero greenhouse gas emissions across all our assets under management by 2050. All the companies we hold as stocks or bonds in our portfolios must meet this goal, which means, they will have to cut their greenhouse gas emissions and engage in carbon offsetting.
To achieve that, they will need to make major changes to their economic models, including transitioning away from fossil fuels into renewables. One way investors can influence them is through engagement. Robeco has long believed in engaging with companies as a means of pursuing positive change. A road map will be used by all our investment teams, which explains how we plan to gradually decarbonize our billions of euros of investments. The targets set in the roadmap include reducing portfolio emissions using our data models, which can calculate how much greenhouse gas emissions companies are producing.
To learn more about the responsibility to act on climate change, please visit the dedicated section in our climate investing hub.
1 Source: 2021 Robeco Global Climate Survey.
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