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Spearheading the sustainable investing movement

Spearheading the sustainable investing movement

21-11-2019 | Interview

Gilbert Van Hassel discusses leadership in sustainable investing and the S&P Global partnership deal.

If you look at the asset management industry today, sustainability seems to have taken over the scene. How do you feel about that?

“The asset management industry has seen many changes recently, perhaps the most exciting of which being the rate that sustainable investing has gained in popularity. Initiatives to tackle the major global problems of our times are opening up new markets, creating opportunities and producing more jobs. Clients are increasingly looking to build more sustainable portfolios, to meet the demands of their sponsors, participants and regulators.”

“And then there is the socioeconomic perspective and the many associated global challenges faced by our generation. While prioritizing growth above issues such as climate-change risks might lead to better returns in the short term, the long-term prospects for such a strategy are less rosy.”

“Rapidly becoming mainstream in Europe, we have seen sustainable investing gain ground in Asia and the US, too. But while many asset managers have added ESG integration to their list of services, the way in which they go about this differs greatly. However, with investors showing an increasing interest in the impact of their investments, one thing is certain – the impact has to be tangible.“

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Is this development an opportunity or a threat to Robeco?

“Sustainability is important for everyone these days. We have seen many asset managers claiming to be leaders in this field, but only a few can say that it’s been part of their core business for more than 20 years. Robeco launched its first sustainability product in 1999. It’s not something we just do on the side; it’s part of the company’s DNA and fully integrated into all our investment processes. This won’t change – we will stay at the forefront and keep pushing the boundaries; so it is certainly an opportunity.”

In these changing times, with a growing focus on sustainable solutions, what does it take to be successful?

“When I think about what we’ve done over the years, I believe it is the ability to translate intellectual property into investment solutions. We aim to add value by really understanding what is happening in the markets. Data is sourced from multiple parties, analyzed across the company and combined with a layer of proprietary research to find true value. We use the results of this process to create innovative solutions, including factor and sustainability-based investment strategies.”

“We integrate ESG across the board and have more than EUR 128 billion of ESG-integrated assets under management. Although our clients have now come to expect this from us, we want to stay at the forefront of SI and respond to the ongoing shift in client focus to other important areas. We have nearly EUR 15 billion of assets under management in sustainability-focused investments aimed at reducing greenhouse gas emissions, water consumption, and tackling other major global development issues of our times. We have also been very successful with our new range of SDG strategies. But as logical as it may sound, integrating SDGs into investment processes requires an enormous amount of work and research. So, as we often say, research really forms the basis of everything we do.”

Tell us about your recent agreement with S&P Global

“We have agreed to build on our successful relationship with S&P Global by transferring our ESG data collection activities and Corporate Sustainability Assessment to them. These are currently carried out by our sustainable investing center of expertise, RobecoSAM. We have been working with S&P DJI since 1999, when the DJSI World was launched based on CSA data.”

“The teams on both sides have known each other for many years and successfully completed many projects together. Providing financial markets with market insights, like ESG data, is the core competence of S&P Global and thus strategically a perfect fit. The embedding of RobecoSAM’s CSA activities into S&P Global will enhance the scale of the operations, usage and volume of the data and services – which will benefit all stakeholders. Companies providing the data are better off when the data is used as broadly as possible, which will be much more the case when S&P has taken over the CSA .”

The deal with S&P Global is in line with Robeco and RobecoSAM’s strategy, in which we focus on our key asset management capabilities. We rank among the best in the world for these areas of expertise.”

“Once the deal with S&P is finalized and the ESG data collection activities are part of S&P Global, Robeco will still work closely with S&P Global and provide advice on the CSA methodology. Robeco and RobecoSAM will continue to use their resources and collective research expertise to interpret ESG data and use it for investment purposes. We will pull from as many data sources as possible, including the CSA, to understand this information, research it and integrate it into our decision-making processes.”

What does this mean for your clients?

“We are absolutely convinced that this is in the best interest of all our clients. Robeco will continue to use the very powerful SI data in the same way. Transferring the data team to S&P Global means we are putting them in the best possible position for future growth and to stay relevant. While the CSA data will remain one of the main ESG data sources for our SI research, we will also continue to use other valuable data sources alongside it.”

“RobecoSAM and Robeco will be involved in the further development of the CSA methodology. This will ensure that emerging and financially material ESG issues relevant to investors continue to be captured in the assessment.”

What role will sustainability play at Robeco?

“We also see a responsibility beyond the company’s bottom line. We are accountable to society as a whole. That’s why we care about well-being, in which wealth plays a part but is not the only factor. From that perspective, it is only natural we are involved in sustainability and believe that we need to take action. That conviction remains as strong as it has ever been.”

How does Robeco differentiate itself from competitors?

“We incorporate ESG factors into all our investment processes, which is a huge undertaking, as it is a fundamentally different way of doing things. Whereas traditionally investing has been all about alpha, we work to create both wealth and well-being. Many fund managers are still struggling to raise their game with respect to ESG integration and often keep ESG teams on the side.”

“At Robeco, SI drives our decisions across the company and is a long-term force for change. We firmly believe that ESG should be integrated into mainstream investing, and are moving increasingly towards outcome and impact-oriented solutions. Our strong focus on research and intellectual property gives us the tools to provide tailor-made SI solutions that meet modern-day investing needs. And that is precisely how we stand out from the crowd.”

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