Robeco has launched two equity strategies, and repositioned two fixed income strategies, to allow investors to tap into the growth potential of the sustainable transition, both from financial and sustainability perspectives.
The Emerging Markets Climate Transition Equities strategy focuses specifically on the transition toward a low-carbon economy, aligning with the goals of the Paris Agreement. The broader Transition Asian Equities strategy also focuses on climate transition, but takes into consideration other environmental and social objectives at the same time.
Alongside to the new strategies, Robeco has repositioned two existing fixed income strategies: Transition Emerging Credits strategy (formerly Sustainable Emerging Credits) and the Transition Asian Bonds strategy (formerly Sustainable Asian Bonds); the latter was previously announced in April.
An estimated $125trn is needed to transform global emerging economies to net zero by 2050. As the biggest change is taking place in Asia and emerging markets, Robeco said it was focusing its strategies on those markets.
Transition investing includes investing in companies who may be at the beginning of their sustainability journeys, greening the entire economy rather than just growing the green economy. The world “doesn’t just need investments in solar panels and wind farms; it needs transition finance to provide the funding for businesses and sectors that are not so green today but will become greener over time”, according to Robeco.
Additionally, Robeco’s research indicated that transition leaders have historically outperformed laggards, both in developed and emerging markets.
“We acknowledge the significance and opportunities of transition finance. Our expertise in equities and credits, our deep understanding of emerging markets, as well as our sustainability background are key ingredients to drive successful transition investments,” said Lucian Peppelenbos (pictured), climate and biodiversity strategist at Robeco.
“With Robeco’s forward looking frameworks, we can identify companies leading the transition and support them with financing. In this way, we foster positive change and ensure that high-emitting companies are a part of the solution. Over time this creates broad-based value, and thus provides alpha opportunities.”
