Asset manager Robeco has unveiled a new range of climate indices, including the “Robeco Developed Low-Carbon Climate Leaders Tilt Equities Index,” “Robeco Developed Paris-Aligned Climate Leaders Tilt Equities Index,” and “Robeco Developed Climate Leaders Equities Index.” These indices cater to investors at various stages of their climate investment journey.
With a growing demand for sophisticated climate indices that move beyond traditional carbon emissions metrics, Robeco has leveraged its advanced climate intellectual property (IP) to develop these indices. This includes tools like the Climate Traffic Light for assessing alignment with the Paris Agreement, the SDG framework for identifying climate solutions, and Climate Beta for evaluating climate transition risks. These metrics are incorporated into the indices based on their specific climate goals and risk profiles.
The first index provides a low-tracking error alternative to market-cap weighted index, ideal for climate-conscious investors seeking to manage climate risk and support Paris Agreement-aligned companies while benefiting from equity returns.
The second index targets investors who want to meet the minimum requirements for EU Paris-Aligned Benchmark, but are keen to integrate more forward-looking climate metrics and want more exposure to climate solutions providers.
The third index is designed for investors looking to invest in climate leaders and capitalise on transitioning to a low-carbon economy by targeting companies expected to drive this change.
Robeco’s expertise in creating custom indices allows for tailored solutions that meet specific investment and decarbonisation targets. The team’s index construction algorithm ensures low turnover and high liquidity, which is essential for passive investors.
Joop Huij, Head of Robeco Indices said, “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 said, “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 inhouse 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.”