It forms part of moves to meet the goals of the Paris Agreement, which aims to limit global warming to a maximum of 2 degrees Celsius above pre-industrial levels, and more ideally to 1.5 degrees, by the end of this century. This requires the world to become carbon-neutral by 2050 at the latest.
As a pioneer of sustainable investing, the pledge is a logical next step by Robeco in taking sustainability to the next level. It follows earlier moves to expand the scope of Robeco’s fossil fuel exclusion policy to all strategies, and hire a climate strategist and a climate data scientist to further align investments with the Paris Agreement. An updated climate change policy was published in September 2020.
We have to act now
“It is clear from scientific reports about climate change and carbon emissions that society has to act now,” says Gilbert Van Hassel, Chief Executive Officer of Robeco. “We cannot solve big problems such as climate change and the rapid decline of biodiversity on our own.”
“But what we can do is set a clear example for the broader industry, work together and encourage other financial institutions such as asset managers to follow suit. We have set this ambition with the conviction that investing is not only about creating wealth but also about contributing to well-being.”
Robeco will develop a roadmap and set interim targets to meet this ambition, in line with global efforts to limit global warming to 1.5 degrees. The targets will include the reduction of portfolio emissions, but also investment in climate solutions such as green bonds, and engagement with investee companies to drive emission reductions in the real economy and create real world impact.
Climate bond strategies
In December 2020, Robeco will become one of the first asset managers in the world to launch bespoke fixed income climate strategies. They will invest in bonds of companies and governments that are on a trajectory to meet the Paris Agreement in their operations by 2050.
“We aim to make our contribution to the Paris Agreement ambition, as climate change represents a significant threat to investors and the global economy,” says Victor Verberk, Chief Investment Officer for Fixed Income and Sustainability at Robeco.
“We acknowledge the responsibility of the investment industry towards climate change risks through the investment decisions that we make and the active dialogue we have with investee companies and other institutions. With this net-zero ambition we aim to contribute to a low-carbon economy.”
Engagement is also important
In addition to decarbonizing portfolios, Robeco aims to step up its efforts through active ownership to focus more heavily on engagement, targeting those companies that are falling behind in the transition.
Two out of five engagement themes planned for 2021 are high-carbon companies that are falling behind in their transition to lower-carbon business models, and the climate commitments of the financial sector, led by banks and insurers.
The new carbon-neutrality targets will therefore include a combination of reducing emissions, tailored solutions such as green bond strategies, and highly focused engagement. Robeco will also work together with and advise its clients on decarbonization goals that are in line with the ambition it has set for itself.
Robeco is a signatory to several international organizations that are committed to tackling climate change, including the Climate Action 100+ group, which works to reduce GHG at the world’s largest carbon emitters; the Platform Carbon Accounting Financials; the Task Force for Climate-Related Financial Disclosures, and the Transition Pathway Initiative.
In the Netherlands, Robeco is a signatory of the Dutch Climate Accord for financial institutions. In September 2020, Robeco signed the UN’s Finance for Biodiversity Pledge which aims to protect and restore biodiversity, much of which has been harmed by global warming.
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