The Green Bonds strategy is actively managed with a diversified exposure to the green bond market. It aims to create positive environmental impact while generating outperformance relative to the Bloomberg MSCI Green Bond index over the long run. It exploits both active interest rate and credit strategies by investing in green bonds issued by governments, government-related agencies and corporates.
The outperformance target is based on three sources of return:
Fixed income asset allocation
Green bond investments are now an integral part of most Robeco fixed income strategies across our macro and credit portfolios. Our total investments in green bonds amount to more than EUR 3.5 billion (as of December 2021) and are expected to further increase.
Green bond framework
To ensure the bonds are truly green, Robeco uses a proprietary five-step bond selection framework to determine the eligibility of green bonds and ensure that these are in line with the most recent regulatory developments on sustainable finance. Only those green bonds that truly have an impact and adhere to internationally accepted principles are eligible for the portfolio.
The green bond framework is based on the following five criteria:
The issuer’s green bond framework is aligned with green bond market standards.
Allocation of proceeds
The proceeds of the green bond make a positive contribution to one of the six environmental objectives as defined by the EU Taxonomy.
The issuer reports at least annually on the use of proceeds and the contribution to the environmental objective.
Credible environmental strategy of issuer
Issuers that are not making significant steps towards becoming more sustainable are avoided.
Investing that aims to generate beneficial social and/or environmental effects
Unmoved by market sentiment and herd behavior, and instead making decisions based on research, conviction and long-term focus
Team has long-term experience and low turnover