Robeco Introduces Advanced Climate Indices for Investors
Highlights
Robeco launches a new climate index range for all types of investors.
Indices include advanced climate metrics, looking at forward-looking, multi-dimensional factors.
Three indices to suit different investor goals, from climate risk mitigation to Paris Agreement-aligned companies.
Robeco has launched a new climate index range: the "Robeco Developed Low-Carbon Climate Leaders Tilt Equities Index", the "Robeco Developed Paris-Aligned Climate Leaders Tilt Equities Index" and the "Robeco Developed Climate Leaders Equities Index". This is for investors at all stages of their climate journey.
As investors look for more than just historical carbon reduction from their climate indices, Robeco has added forward-looking, multi-dimensional climate metrics to its indices.
Over the years, Robeco has developed advanced climate intellectual property (IP), such as the Climate Traffic Light, which assesses a company’s alignment with the Paris Agreement, the SDG framework for identifying climate solutions and Climate Beta for measuring climate transition risks. These metrics are applied to different degrees in each index depending on the climate goal and risk profile of the index.
The first index is a low-tracking error alternative to a market-cap-weighted index for climate-aware investors looking to reduce climate risk, support Paris Agreement-aligned companies and get equity returns.
The second index is for investors who want to meet the minimum requirements of the EU Paris-Aligned Benchmark and add more forward-looking climate metrics and more climate solution providers.
The third index is for climate leaders, for investors who want to invest in companies that will lead the transition to a low-carbon world.
Robeco’s ability to incorporate client preferences into custom indices is one of the strengths of the Robeco Indices team. This means tailored solutions for specific investment goals or decarbonisation targets. The team also has an index construction algorithm that minimises turnover and maximises liquidity, which is key for investors switching from passive.
Joop Huij, Head of Robeco Indices: “We’re excited to launch this climate index family to offer investors a more nuanced approach to climate index investing, compared to carbon emissions’ focussed indices. Our index construction approach takes turnover and liquidity into account to provide highly investable indices. We welcome an active dialogue with clients to develop custom indices that align with their climate and financial goals.”
Lucian Peppelenbos, Climate Strategist: “We decided years ago to not only focus on carbon emissions data when looking at climate investing. We invested in resources to also evaluate other climate characteristics of companies such as their alignment with the Paris Agreement, whether companies provide solutions to lower the world’s future emissions and their level of climate transition risk. We have developed these metrics in-house and integrate them into our investment solutions. It’s great that our climate IP is now being made available to an even larger group of investors.”
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Source: Robeco
