Sustainable Index Solutions

The Sustainable Index Solutions team transforms the broad market index universe into a sustainable index universe. The solutions:

1. Positive impact
   Exclude worst scoring stocks based on Robeco's time-tested SDG Framework. By doing so, our sustainable index solutions give more weight to companies that are aligned with positive impact.
2. Lower carbon footprint
   Significantly lower the carbon footprint based on fundamental forward-looking view of Robeco Climate Strategy team and SDG Framework: exclude climate laggards and polluters.
3. Driving green innovation
   Retain climate leaders, which are companies that might have a high carbon footprint based on their current and past emissions but are driving "green innovation" and therefore essential in the transition to a low-carbon economy. We identify these climate leaders through the Robeco SDG Framework.
4. Optimize the index
   Optimize the index constituents' weights towards the SDGs (sustainability) for the SDG Low-Carbon indices and towards high and balanced factor exposure (return) for the Sustainable Multi-Factor indices.

Research shows that public transparency of indices causes a key disadvantage to a public index investor. Other market participants try to benefit from this public information, resulting in hidden implicit costs. Robeco's indices are only transparent to you, our client, and we do not share this transparency with all market participants, thereby mitigating these risks and that of overcrowding.

The Sustainable Index Solutions team comprises passionate thinkers who challenge the status quo. We incorporate their award-winning research into our investment process. Senior members of the team have developed and scaled up multiple investment capabilities at Robeco. The team consists of many complementary skillsets with academic specializations in climate finance, computer science, econometrics and financial economics. Our PhD program ensures we are able to recruit some of the best talent in the fields of climate finance and econometrics.

SDG Low-Carbon Equity Indices
Our SDG Low-Carbon Equity Indices aim to both positively contribute to the UN Sustainable Development Goals and a low-carbon economy while earning market-like returns over the long run. Robeco's SDG Framework, the Climate Strategy team's forward-looking view and proprietary index construction algorithm are used to provide clients sustainable indices with positive impact, a significantly lower carbon footprint and cost-effective implementation.

Sustainable Multi-Factor Equity Indices
Our SDG Low-Carbon Multi-Factor Equity Indices provide clients with high and balanced factor exposure in a sustainable, transparent and low-cost way. We apply enhanced factor definitions that avoid unrewarded risks. We provide balanced exposure to a diversified set of factors: value, momentum, quality and low volatility, with the objective of stable outperformance over time. In addition, we significantly reduce the carbon footprint of the index and exclude the worst scoring stocks, based on Robeco's SDG Framework, to align with positive impact and mitigate potential reputational risks.

High and balanced exposure to enhanced factors, transparency to clients only and a cost-effective, sustainable implementation set us apart from generic factor indices.

The Sustainable Index Solutions team integrates sustainability in all their indices. They strive for positive impact through the integration of Robeco's SDG Framework in their indices and to contribute to a low-carbon economy through the integration of both the forward-looking fundamental view of Robeco's Climate Strategy team and our SDG Framework.

This strategy is available for various investment regions: Global All Country, Developed Markets, Emerging Markets, US, Europe, Asia-Pacific and Japan.