RobecoSAM, the investment specialist focused exclusively on Sustainability Investing (SI), today unveiled three innovations before more than 360 participants from around the world at its annual RobecoSAM Forum. The “Smart ESG” methodology, which identifies sustainability information as an investment factor with a positive information ratio was launched along with two new investment solutions that specifically consider children’s rights and corporate gender equality. RobecoSAM thus continues to expand its Impact Investing platform, launched in April, by offering solutions to investors looking for investments that deliver financial returns as well as measurable positive social impact.
Michael Baldinger, CEO, RobecoSAM: “The development of the Smart ESG methodology and our impact investing solutions underscores RobecoSAM’s strength in innovation. For the past 20 years, we have been developing investment tools that offer an attractive risk/return profile while helping to preserve our environment for future generations. We can draw strong parallels between the sustainability goals to be adapted by the UN in the coming days and the goals of our own existing and new solution set. This is a clear reaffirmation of our leading position as the global leader in Sustainability Investing.”
The “Smart ESG” methodology is RobecoSAM’s latest innovation. It reduces biases in ESG data sets and emphasizes specific ESG criteria to build portfolios with a favorable risk/return profile. As a result, sustainability information can be identified as a factor in portfolio construction, like conventional factors (e.g., value or momentum). The sustainability factor which RobecoSAM has determined offers an attractive information ratio and is already being applied to selected solutions. Further applications will follow.
Daniel Wild, PhD, Head of SI Research & Development, RobecoSAM: “Conventional ESG integration models are limited by the bias of the underlying data. This can lead to unintentional risks in the portfolio, lead to distortions and entail an overlay of financially material information. With the Smart ESG methodology, we can eliminate these biases and identify sustainability information as a factor for the portfolio construction. This factor has a very low correlation with other factors, offers an attractive risk/return profile and is easy to apply.”
Both investment strategies are based on bottom-up stock selection, which alongside the financial attractiveness of a company also considers its endeavors regarding children’s rights and gender equality. At the heart of both investment strategies lie the “Global Child” and “Gender Equality” company ratings generated by RobecoSAM’s ESG-database, which monitors over 3,000 companies.
Rainer Baumann, Head of Public Equities, RobecoSAM: “Diversity has become increasingly important to companies and their stakeholders over the past few years. Aside from a higher proportion of female board members, this includes such issues as equal and fair pay as well as talent management and fostering. Our strategies invest in companies that excel in these areas while at the same time offering high long-term performance potential. “