When national governments are starting to actually implement global warming policies after COP21, stranded assets will become an unprecedented problem for sectors relying on fossil fuels. Research by Nature magazine published in January 2015, suggests that one-third of oil reserves, half of gas reserves and 80% of coal reserves might go unused up until 2050. The research identified the largest risks as being to coal reserves in China, India, the former Soviet Union, and oil & gas reserves in the Middle East.
The call to limit global warming has fallen at investors’ doors as the owners of companies whose activities are contributing to climate change. One thing investors can do is simply divest high-carbon companies., In our view this is not the most effective way to decarbonize portfolios or deal with stranded assets. Most of these fossil fuel reserves are owned by governments, not companies. For those reserves that are held by corporates, divestment simply means one institution buying what another is selling.
The better solution is to encourage carbon companies to change their business models. Our team has been engaging with carbon-intensive companies for some time now exactly trying to do so. The focus is on the biggest generators of C02. These are the utilities, including electricity generators which burn fossil fuels to generate energy and account for one-third of all global carbon emissions. Other sectors are real estate, oil & gas and transportation.
Our engagement with the utilities sector is already well underway. It is aimed at encouraging the implementation of proactive and ambitious environmental strategies, operational excellence in thermal generation, business model innovation, and participation in public policy debate. Over the course of the engagement, we expect to see electric utilities taking steps towards their own de-carbonization.
The owners of retail buildings which can generate large quantities of C02 have also been targeted in our engagements. Here the engagement is aimed at climate change management, license to operate, environmental management systems, owner engagement with occupiers, and energy and carbon reductions. For 2016 we plan to engage the oil & gas sector in our carbon engagements.
Engagement with companies is not only about having a dialogue. It's also about seeing the company’s impact for yourself and be prepared to interact in depth with the industry. Thus we went on a field trip to West Canada to visit the third-largest oil reserves in the world - the Athabasca oil sands. To see how the oil companies recover oil from the oil sands, and under which conditions its environmental impact can be reduced. An important part of the trip focused on the Carbon Capture and Storage technology, which could be such a condition for the sustainable recovery of oil from oil sands.
A number of large asset owners, including the Norwegian Government Pension Fund and CalPERS of the US have joined us in selecting engagement as their main approach to deal with carbon-intensive investee companies. Another approach would be to join co-file initiatives of shareholder resolutions such as the ‘Aiming for A’ campaign in the UK, which has successfully persuaded Royal Dutch Shell and BP to disclose their climate strategy and the resilience of their portfolios against carbon limits. Shareholder resolutions are appearing now at mining companies and utility companies as well and we are preparing ourselves to co-filing some of these resolutions.
The content displayed on this website is exclusively directed at qualified investors, as defined in the swiss collective investment schemes act of 23 june 2006 ("cisa") and its implementing ordinance, or at “independent asset managers” which meet additional requirements as set out below. Qualified investors are in particular regulated financial intermediaries such as banks, securities dealers, fund management companies and asset managers of collective investment schemes and central banks, regulated insurance companies, public entities and retirement benefits institutions with professional treasury or companies with professional treasury.
The contents, however, are not intended for non-qualified investors. By clicking "I agree" below, you confirm and acknowledge that you act in your capacity as qualified investor pursuant to CISA or as an “independent asset manager” who meets the additional requirements set out hereafter. In the event that you are an "independent asset manager" who meets all the requirements set out in Art. 3 para. 2 let. c) CISA in conjunction with Art. 3 CISO, by clicking "I Agree" below you confirm that you will use the content of this website only for those of your clients which are qualified investors pursuant to CISA.
Representative in Switzerland of the foreign funds registered with the Swiss Financial Market Supervisory Authority ("FINMA") for distribution in or from Switzerland to non-qualified investors is Robeco Switzerland AG, Josefstrasse 218, 8005 Zürich, and the paying agent is UBS Switzerland AG, Bahnhofstrasse 45, 8001 Zürich. Please consult www.finma.ch for a list of FINMA registered funds.
Neither information nor any opinion expressed on the website constitutes a solicitation, an offer or a recommendation to buy, sell or dispose of any investment, to engage in any other transaction or to provide any investment advice or service. An investment in a Robeco/Robeco Switzerland product should only be made after reading the related legal documents such as management regulations, articles of association, prospectuses, key investor information documents and annual and semi-annual reports, which can be all be obtained free of charge at this website, at the registered seat of the representative in Switzerland, as well as at the Robeco/Robeco Switzerland offices in each country where Robeco has a presence. In respect of the funds distributed in Switzerland, the place of performance and jurisdiction is the registered office of the representative in Switzerland.
This website is not directed to any person in any jurisdiction where, by reason of that person's nationality, residence or otherwise, the publication or availability of this website is prohibited. Persons in respect of whom such prohibitions apply must not access this website.