Robeco introduces innovative Sustainable Index family                      

by | Feb 24, 2022

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Robeco has launched a Sustainable Index family, the Robeco SDG Low-Carbon Indices. The launch follows the introduction of its Multi-Factor Index range back in 2017.

Similar to the Multi-Factor Index range, the SDG Low-Carbon Indices are available for seven regions: Global AC, Global DM, Emerging Markets, US, Europe, Asia-Pacific and Japan. The index aims to make a positive contribution to the UN Sustainable Development Goals and applies Robeco’s proprietary SDG Framework. Negatively scored stocks based on the SDG Framework are excluded from the index universe. The index also aims to make a positive contribution to a low-carbon economy and obtains a significant carbon footprint reduction compared with market cap indices. The forward-looking view of Robeco’s Climate Strategy team, led by Lucian Peppelenbos, and the SDG Framework are used to lower the carbon footprint and to differentiate between climate laggards and climate leaders.

The Robeco SDG Low-Carbon Indices build on Robeco’s sustainability expertise and its index construction & delivery expertise. They offer a solution that combines two trends in the market: index investing and sustainable investing and are a sustainable alternative to passive market cap indices. Robeco’s indices are transparent to its clients only so as to aim to mitigate the risk of other market participants benefiting from public information, which is a concern with publicly transparent indices as proven by earlier Robeco research.

Joop Huij, Head of Sustainable Index Solutions: “We’re very excited to have launched the new set of indices for our clients. In addition to private transparency for our clients, the SDG Low-Carbon Indices have low turnover, liquidity and transaction costs taken into account in the index construction and the high capacity is monitored and managed. This all allows for efficient implementation for our clients. Our team works closely together with Robeco’s SI Center of Expertise to ensure the new Indices will remain state-of-the-art and we will keep innovating them for our clients”.

Lucian Peppelenbos, Climate Strategist: ”The biggest risk of climate change is inaction. Launching these Indices and making these available to our clients is a tangible example of our efforts to combat climate change. The Indices go beyond traditional carbon data sources. By using input from my team and the SDG Framework, the Indices differentiate between climate laggards and climate leaders. Climate leaders are companies that might have a relatively high carbon footprint based on their current and past emissions, but are driving green innovations and are therefore essential in the transition to a low-carbon economy. Together with Joop’s team, we keep innovating in order to lower climate risk in our clients’ investments”.

Jan Anton van Zanten, SDG Strategist: “Sustainable investing is shifting from avoiding ESG risks towards aligning with positive impact. Our SDG Framework identifies which companies are positively contributing to people’s wellbeing and environmental sustainability and therefore leading this shift, and which are hindering progress. Robeco’s SDG Framework has been used in the management of Fixed Income and Equity strategies since 2018, currently covering approximately EUR 9 bn in assets. We expect this to grow further as the world moves towards positive impact and the sustainable indices are an innovative investment solution for those investors looking to make this move”.

 

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