• First active equity strategy in the market focused exclusively on fashion
• Dual objectives: attractive investment returns and promoting change in fashion industry

Robeco launched its Fashion Engagement Equities Strategy (Article 8, SFDR). The new equity strategy focuses on the generation of attractive long-term investment returns, while engaging with all the companies in the portfolio.

Fashion is a growing industry generating USD 2.5 trillion in sales per annum¹ and employing more than 300 million people globally² across its supply chain. Future growth will be driven by rising global population growth, increasing disposable incomes and conspicuous consumption.

However, the fashion industry faces several social and environmental challenges. Garment worker pay is on average 45% below local living wages³. Moreover, every year about 100 billion articles of clothing are produced of which less than 1%⁴ is recycled into new clothing, and the industry is responsible for up to 10% of global greenhouse gas emissions⁵. It is critical that sustainable solutions are implemented to transform the sector’s operations from a linear, take-make-waste model to a circular one, and that pressing social issues including workers’ rights and living wages are addressed.

The new equity strategy will invest in, and engage with, 30 to 40 publicly listed companies across the entire fashion value chain, from sourcing, to production, consumption and end-of-life. Companies exposed to casualization, premiumization, circularity and automation megatrends are considered in the stock-selection process. The team combines disciplined fundamental analysis with tailored, multi-year engagements on key sustainability challenges to construct an investment portfolio with potential for growth and positive change.

Robeco believes that safeguarding economic, environmental, and social assets is a prerequisite for a healthy economy and to generate attractive returns in the future.

Related Article: Robeco Raises €130 Million for New Sustainable Loan Fund

Dora Buckulčíková, Portfolio Manager at Robeco: “Our conviction is that profit and positive change can go hand in hand. There is increasing demand for the fashion industry to transform. Companies with leading sustainability characteristics are likely to do better than laggards in the long run. It is our responsibility as long-term shareholders to encourage transparency and sustainable business practices at the individual company level. We believe this equity strategy positions investors to benefit from and contribute to the fashion industry’s sustainable transition.”

Footnotes:

¹UN Fashion Alliance, 2017
²Euromonitor Apparel, Footwear, Sportswear and Personal Luxury categories, 2022
³The Industry We Want, 2022
⁴Ellen MacArthur Foundation, 2022
⁵United Nations, 2018