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- Advanced Climate Metrics: Robeco’s new indices integrate forward-looking climate data, going beyond traditional carbon emissions.
- Diverse Options for Investors: The indices cater to various climate strategies, from low-tracking error alternatives to Paris-Aligned benchmarks.
- Customizable Solutions: Robeco offers bespoke indices, ensuring low turnover and high liquidity for diverse investor needs.
Robeco has launched a groundbreaking climate index family designed to meet the evolving needs of investors at various stages of their climate journey. The new suite includes 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.” These indices integrate forward-looking climate metrics, providing sophisticated tools for investors to align with their climate and financial goals.
Investors are increasingly looking for climate indices that do more than just reduce carbon emissions based on past data. Robeco’s new indices incorporate advanced climate metrics developed in-house, 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 evaluating climate transition risk. These metrics allow investors to make informed decisions based on a company’s future climate impact.
Lucian Peppelenbos, Climate Strategist at Robeco, highlighted this approach: “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. It’s great that our climate IP is now being made available to an even larger group of investors.”
The new indices offer diverse options to suit varying investor strategies. The first index provides a low-tracking error alternative, ideal for those who want to mitigate climate risk while maintaining alignment with the Paris Agreement. The second index meets the EU Paris-Aligned Benchmark requirements and integrates additional forward-looking metrics, making it perfect for investors seeking exposure to climate solution providers. The third index focuses on companies expected to lead the transition to a low-carbon economy, appealing to investors looking to capitalize on climate transition leaders.
Robeco’s ability to tailor indices based on client-specific preferences is a core strength. The indices can be customized to meet specific investment universes or decarbonization targets, supported by an algorithm that ensures low turnover and high liquidity—essential for passive investors. Joop Huij, Head of Robeco Indices, emphasized the value of this customization: “We’re excited to launch this climate index family to offer investors a more nuanced approach to climate index investing, compared to carbon emissions’ focused 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.”
Related Article: FTSE Russell Expands Climate-Aligned Bond Indices to Include High-Yield and Emerging Markets
Robeco’s new climate index family represents a significant advancement in climate investing, offering investors the tools to integrate forward-looking climate metrics into their portfolios and tailor their investments to meet their unique climate and financial objectives.