Momentous year for SI highlighted in 2021 Stewardship Report

As the world continued to battle Covid-19, the focus on what nature can throw at us – and the growing urgency not to cross planetary boundaries on our fragile Earth – became ever more apparent. Robeco has long believed that part of the answer lies in sustainable investing, and there was no shortage of subject matter in 2021.

Stark warnings from the Intergovernmental Panel on Climate Change (IPCC) that we don’t have much time left to limit global warming to within the Paris Agreement goals were confirmed by a summer of forest fires, floods and other natural disasters. The COP26 summit in Glasgow did bring about some renewed pledges to set net-zero targets and make greater efforts to decarbonize.

But this can only really be backed up by action. This led to Robeco launching a range of climate and decarbonization funds, stepping up engagement to tackle the highest emitters, and publishing an extensive roadmap of plans to achieve net-zero emissions across all assets under management by 2050, in line with international agreements.

But it is impossible to tackle climate change without also addressing biodiversity loss at the same time. That’s why we redoubled our efforts here as well. Social issues continued to play a key role in the wider engagement program, reflecting the increasing focus that the Covid-19 pandemic has placed on topics like labor practices. Finally, as a key pillar in our sustainable investing strategy, we launched a new human rights theme, focused on companies operating in areas that could be deemed controversial.

“Sustainability is not for believers; it has become hard science, with a growing number of scientific studies and papers being published on it,” says Victor Verberk, Robeco’s Chief Investment Officer, Fixed Income and Sustainability, in the introduction to the report. “As such, anyone in the financial industry who wants to keep up with developments needs to educate themselves.”

Robeco has a long history in sustainability, with our current approach built upon 25 years of knowledge and experience in the field. And whilst many things have changed in that time, the need for investors to be responsible stewards of the companies in their portfolios remains critical.

“Effective stewardship plays a central role in any credible sustainable investment strategy, and that’s why we’ve continued to build on our work of previous years, whilst increasing our focus on many of the sustainability megatrends we see today,” says Carola van Lamoen, Robeco’s Head of Sustainable Investing.

“We’ve focused on topics like climate change, biodiversity and human rights for many years, but this year represented a redoubling of our efforts in these areas, reflecting the urgent nature of the challenges we as a society face.”

The 80-page report provides an in-depth analysis of much of the work that Robeco has done to further SI across its investments, with the members of our SI Center of Expertise working in close collaboration with Robeco’s Investment teams, and members of the wider Robeco organization. And within the SI Center, many new staff members were added, including data specialists to try to tackle the thorny issue of getting reliable information on emissions.

The report has sections devoted to responses to climate change and the related issues of biodiversity, water and waste, and the partnerships we are cementing. The work of Robeco’s governance specialists is also reflected, including the extensive engagement work conducted in emerging markets, as well as extensive reports on how Robeco voted in 2021.

We detail how exclusions are handled, introducing the new Controversial Behavior Committee and other enhancements to add an additional layer of analysis to our assessment of potentially contentious companies. We also report on social and employee matters, and the shape that Robeco is in generally. The year saw assets under management surpass EUR 200 billion for the first time, and many new funds and capabilities give us much confidence for the coming years.

“2021 marks another year of hard work by Robeco’s SI Center, and our investment colleagues who form the center of all our sustainable investing approaches,” says Van Lamoen. “I’m proud of all our achievements, many of which are outlined in this report, and I look forward to continuing to further our sustainable investing strategy in 2022.”