Asset manager Robeco has introduced a new family of climate indices to cater to a broad base of investors at different stages in their climate investing journey. The family includes the Developed Low-carbon Climate Leaders Tilt Equities Index, Developed Paris-aligned Climate Leaders Tilt Equities Index, and Developed Climate Leaders Equities Index. The first one offers a low tracking error alternative to a passive market-cap weight index, which will suit investors focused on mitigating climate risk while obtaining an equity premium. The second aims to support investors who want to meet the minimum requirements for EU Paris-aligned benchmarks and have more exposure to climate solutions providers. Meanwhile, the final index targets those considered as “leaders” in the transition to a low-carbon economy. Robeco noted that investors were increasingly seeking climate indices that go beyond reducing backward-looking carbon emissions. As such, the asset manager has incorporated forward-looking, multi-dimensional climate metrics and will further utilise its Climate Traffic Light tool to assess alignment with the goals of Paris Agreement. The metrics will be integrated into the indices to varying degrees, depending on the specific climate objectives and risk profiles of each index. “We decided years ago to not only focus on carbon emissions data when looking at climate investing,” said Lucian Peppelenbos, Climate Strategist at Robeco. “We invested in resources to also evaluate other climate characteristics of companies, such as their alignment with the Paris Agreement, whether [they] provide solutions to lower the world’s future emissions and their level of climate transition risk. We have developed these metrics in-house and integrated them into our investment solutions.”
