Robeco Launches Carbon Offset Funds

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by KnowESG
KnowESG_Robeco Launches Carbon Offset Funds
Image courtesy of Jan Kopriva via Unsplash

Robeco is embarking on a new sustainability initiative with the introduction of its inaugural Carbon Offset Share Classes.

By engaging in these unique share classes, Robeco provides clients with a powerful tool to not only advance their ongoing decarbonisation efforts in alignment with the Paris Agreement but also go the extra mile.

Carbon markets serve as dynamic trading platforms where carbon credits are bought and sold. When clients opt for the carbon offset share classes, a portion of their investments is earmarked for acquiring carbon credits.

To counterbalance their existing financed emissions, encompassing scope 1 and 2 emissions, Robeco grants clients an equivalent in carbon credits. These can be directed towards supporting eco-friendly endeavours like reforestation projects.

Robeco's introduction of carbon offsetting share classes encompasses three climate-centric investment strategies:

  • RobecoSAM QI Global SDG & Climate Conservative Equities.

  • RobecoSAM Climate Global Credits.

  • RobecoSAM Net Zero 2050 Climate Equities.

Through these specialised share classes, Robeco's clients can actively contribute to climate projects that extend beyond emissions reduction within their investment portfolios.

By investing in these classes, they finance initiatives that not only combat climate change but also foster economic growth and benefit local communities.

For instance, in Bangladesh, there's a project focused on repairing leaking gas infrastructure through the acquisition and use of specialised leak detectors. This initiative also involves training local residents to detect and address gas leaks, ultimately reducing emissions.

While carbon markets face significant challenges related to their integrity and reliability, Robeco has strategically addressed these concerns in the design of the Carbon Offset Share Classes. They adhere to a stringent mitigation hierarchy:

  • First and foremost, the primary goal is to reduce emissions. Carbon offset share classes are exclusively available for Climate funds with a clear carbon footprint reduction objective tied to a Paris-Aligned Benchmark of Climate Transition Benchmark, both of which encompass a 7% year-on-year decarbonisation trajectory.

  • Additionally, these carbon credits are not employed to render the funds carbon-neutral but are utilised to bolster climate action in other sectors of the economy. Essentially, financed emissions are voluntarily compensated.

To ensure the quality of the credits provided to clients, Robeco maintains stringent standards for vetting partners and their projects. Carbon credits are sourced exclusively from reputable partners who conduct rigorous due diligence on the projects they offer.

Robeco also employs a comprehensive quality framework for project assessment and due diligence. Additionally, they collaborate with a specialised rating agency to conduct independent third-party quality assessments of carbon projects.

Lucian Peppelenbos, Climate Strategist at Robeco, underscores the significance of the launch of carbon offset share classes in reinforcing the company's commitment to sustainability and responsible investing.

Research indicates that carbon markets can significantly reduce the costs associated with implementing the Paris Agreement. Currently, approximately EUR 1 trillion is invested globally in climate solutions, with the majority of these funds allocated to industrialised nations.

Nevertheless, an estimated EUR 4 trillion is needed to achieve a net-zero transition, and a significant portion of this investment must be directed toward developing countries to promote global decarbonisation. Robeco's carbon share classes provide clients with an opportunity to contribute to this crucial objective.

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Source: Robeco

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