Robeco positions Asian bonds fund for transition investing

16 april 2024

• Finding alpha in companies that are making the sustainable transition across all sectors
• Identifying transition leaders from laggards, by integrating forward-looking metrics
• Robeco will bring a range of transition investing strategies to market across several asset classes

Robeco today announces the transformation of its Asian Bond fund into a transition investing-ready vehicle. To transform global emerging economies to net zero by 2050, an estimated USD 125 trillion is needed. Acknowledging the significance of transition finance, Robeco makes use of specific frameworks producing forward-looking metrics that can credibly distinguish transition leaders from laggards. In the coming months, Robeco will launch a series of new transition investing strategies across several asset classes, seeking alpha in all industries including those in high carbon- intensive sectors that are making the sustainable transition.

Currently, transition investing is mostly focused on private markets and real estate. With its public market frameworks (for bonds and listed equities), Robeco makes transition investing available to broader audiences, starting where the investment opportunities are most stark – in Asia and emerging markets. Regulators are already indicating they would like listed companies to make transition plans with a view of making them public. This highlights the importance of listed companies as part of the transition effort.

Mark van der Kroft, Chief Investment Officer at Robeco: “Today, Robeco offers multiple strategies with clear climate targets and funds investing in transition enablers. However, recognizing the urgent need for transition finance to support global sustainability goals, Robeco is pleased to also introduce investing in actual transition assets in public markets. Our commitment stems from the understanding that effective transition is about more than just investing in green technologies; it’s about driving meaningful change across all sectors.

“Investing in green technologies and renewable energy is important, but they make up less than 8% of the global economy. To get to net zero, a progressive decarbonization of all sectors of the economy is needed. Positive change is expected when we make today’s high emitting companies part of the solution by supporting their transformation towards a low carbon future. Vice versa the risk lies with transition laggards without adaption prospectives.”

Leveraging its expertise in equities, credits and sustainability, Robeco’s transition investing approach focuses on financing companies that make progress in sustainable development, while adhering to key principles such as intentionality, measurability, and credibility.

Thu Ha Chow, Head of Fixed Income Asia at Robeco: “The strategies that we anticipate to launch in the coming period perfectly combine Robeco’s core strengths in alpha generation and sustainability expertise. Transition investing presents challenges due to the scarcity of publicly available data and metrics. Leveraging our 25 years of experience in sustainable research and investing, we’ve developed proprietary data and frameworks to overcome this lack of transparency. Investments have always been about forward-looking metrics, and this applies as much to sustainability metrics as it does to financial metrics. Our frameworks allow for diversified, balanced portfolios without imbedded sector biases. Our approach emphasizes a clear intention to contribute to real-world transition, alongside measurable outcomes and credible progress reporting.”

Source: Robeco