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Robeco

PRI reporting framework 2020

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Investment policy

SG 01. RI policy and coverage

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

          ESG integration policy: https://www.robeco.com/docm/docu-esg-integration.pdf
        

01.3. Indicate if the investment policy covers any of the following

01.4. Describe your organisation’s investment principles and overall investment strategy, interpretation of fiduciary (or equivalent) duties,and how they consider ESG factors and real economy impact.

Robeco's mission is to enable our clients to achieve their financial and sustainability goals by providing superior investment returns and solutions. We are offering a compact, client-oriented and distinctive range of actively managed investment strategies.  This offering includes bespoke sustainability funds, multi-asset strategies, private equity strategies and alternative investments.

Our mission is supported by our key investment beliefs that a research-based, quality-driven process delivers the best possible long-term results for our clients. We uniquely integrate fundamental, quantitative and sustainability research. Portfolio managers use the insights from all three, allowing them to make better-informed investment decisions. 
We routinely integrate into the entire fundamental equity, fixed income and quant ranges. We believe ESG integration leads to better-informed investment decisions and better risk-adjusted returns throughout an economic cycle.

We also believe we can create socio-economic benefits alongside competitive financial returns. We measure real economic impact for our engagements (https://www.robeco.com/nl/visie/2019/04/robeco-publishes-q1-active-ownership-report.html) and are developing this for our investments . 

https://www.robeco.com/en/about-us/our-philosophy.html

ESG integration is applied for all strategies that have direct investments in fixed income and equities. For all pooled public funds Robeco's stewardship policy, engagement policy, voting policy and exclusion policy apply.

 

01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

Consistent with our activities as an institutional and retail asset manager, Robeco's responsible investment policy is principally focussed on the investment process and active ownership practices. Key elements of this approach are:

  • ESG integration in the investment process;
  • Engagement on ESG issues with invested companies;
  • Proxy voting;
  • Exclusion policy;

Robeco publishes a Stewardship Policy that clarifies our approach towards stewardship activities. The Robeco Stewardship Policy is regularly updated, lastly end 2019. https://www.robeco.com/docm/docu-robeco-stewardship-policy.pdf 

Apart from integrating ESG in our investment processes we also take ESG considerations into account in our business operations such as:

  •  Using a responsible purchasing policy including assessment of the ESG footprint of new suppliers;
  •  A social commitment policy;
  •  Evaluation of our external managers on corporate responsibility;

The described policies apply to all pooled public funds managed by Robeco. Clients of discretionary mandates may have specific policies for their voting or exclusion activities. ESG integration is standard also for discretionary mandates.

Robeco's funds are managed by different investment teams. The investment teams are fully accountable for their own philosophy, style and process. All investment teams systematically incorporate ESG factors into their investment and portfolio construction processes, where relevant and possible. we are convinced that taking ESG criteria into account results in better-informed investment decisions. The ESG information is integrated at both company and country levels in our equity and fixed income products. The way in which we incorporate extra-financial factors into our investment processes is tailored to the characteristics of each individual investment strategy. For all funds a basic description of the ESG integration process can be found on portfolio factsheets.

Our clients sustainability preferences are taken into account in several ways:

  • We offer a standard sustainable and impact range of funds;
  • We offer bespoke solutions of existing strategies incorporating specific clients sustainability requirements;
  • We develop new strategies based on our clients’ ideas and sustainability preferences;
  • We ask their opinion when selecting engagement themes. 

01.6. Additional information [Optional].

          
        

SG 01 CC. Climate risk

01.6 CC. Indicate whether your organisation has identified transition and physical climate-related risks and opportunities and factored this into the investment strategies and products, within the organisation’s investment time horizon.

Describe the identified transition and physical climate-related risks and opportunities and how they have been factored into the investment strategies/products.

Robeco acknowledges the responsibility of the asset management industry towards climate change. We aim to make our contribution to the ambition of the Paris agreement to keep temperature well below 2 degrees Celsius above pre-industrial levels.We identify two types of Climate Change risk:

  • Transition risks, stemming from policy and legal developments, technology obsolescence, changed consumer preferences and reputation damage from shifting public opinion;
  • Physical risk, which can be acute or chronic.

Combatting climate change also gives rise to opportunities, for instance from:

  • New technologies contributing to resource efficiency and different energy sources;
  • Shifted consumer preferences, creating opportunities for other products and services, creating new markets.

A climate change task force is in place to make sure Robeco complies among others with the TCFD recommendations and assess which further steps need to be taken. In 2019 the climate change task force made further progress on calculating the carbon footprint of all Robeco's holdings. Climate related stress test were conducted by the risk management department. A carbon accounting prototype was developed to assess the impact of setting a reduction pathway and climate strategy and eco-efficiency are key material issues for certain sectors and are part of our ESG analysis for all strategies.

01.7 CC. Indicate whether the organisation has assessed the likelihood and impact of these climate risks?

Describe the associated timescales linked to these risks and opportunities.

The identification of climate risks and opportunities in our climate risk scenarios, is based on the IPCC. The most common timeline is until 2050, with net carbon neutrality by then. For the translation into our target setting, we focus on the interim milestone of a reduction in global emission of 50% by 2030. This year is crucial in our scenario planning. Based on this, we derive the medium-long term risk scenarios run until 2025.

Transition risks: certain industries are already being affected by climate change, where we observe changing public opinion and investor sentiment and new regulation. For example, studies already indicate that the cost of capital for companies in the energy and utility sectors that rely on fossil fuel has increased in the past 5 years relative to renewable energy providers. We believe more sectors will become impacted in the next 5-10 yrs as regulations increase. Ultimately (10+ yrs) all companies have to become significantly more efficient as energy efficiency is a major contributor to getting to net zero carbon emissions.

Opportunities: we have been seeking opportunities from climate adaptation and mitigation since the launch of our Smart Energy fund in 2006, and expect the opportunities will accelerate significantly as society recognizes the risks we face from a significantly changing climate. The need to reduce emissions by 50% by 2030 and to net zero by 2050 gives a concrete idea of how things should develop. We continue to assume that society will act in its best interests, although we are clearly procrastinating and expect much of the investment to come at the last minute.

Physical risks: these have the longest timescales for broad-based impacts, but we already see major events making the acute risks clear in the short term. For example, the drought in Europe in 2018 disrupted supply chains on the continent, surprising many investors. Fires in California were another early example (2014-2017), the risks from which are now perfectly clear to most from Australia in late-2019. In the medium term (10+ yrs), severe weather will continue to increase and loss from floods and severe storms is a concern. However, the largest impacts come from potential sea level rise of several meters on one side and water shortages on the other if glacier melting accelerates in the long term.

 

01.8 CC. Indicate whether the organisation publicly supports the TCFD?

01.9 CC. Indicate whether there is an organisation-wide strategy in place to identify and manage material climate-related risks and opportunities.

Describe

The Sustainability & Impact Strategy Committee (SISC) of Robeco and RobecoSAM, the committee overseeing the sustainability strategy of Robeco, has commissioned a task force to develop a climate change strategy for Robeco and RobecoSAM, in September 2018. The climate change strategy is a further evolution of the current climate change policy. The aim is to put our climate change objectives into practice, in acknowledgement of the responsibility of the asset management industry towards climate change risks through the investment decisions that we make and the contact we have with investee companies and other institutions.

 The SISC approved the outline of the strategy and trajectory for the development and implementation in three phases:

  • Assessment: this first phase has been initiated and consists of acquiring the carbon footprint data and measuring the current position of portfolios. Also, financial risk management has developed a methodology for measuring climate risk in portfolios, and the active ownership team is working on the development of an engagement strategy on climate change risk.
  • Implementation: phase two will cover the implementation of the integration of climate change transition risk, physical risk and opportunities in the investment process; and the measurement of climate risk (on portfolio and firm level) as part of risk management.
  • Communication: phase three focuses on educating the sales force on climate change and reporting to clients and our broader stakeholder base.

The reduction of our carbon footprint from our own business operations follows a parallel trajectory.  

Both Robeco and RobecoSAM aim to contribute to the ambition of the Paris Climate Agreement: to keep temperature rise well below 2 degrees Celsius above pre-industrial levels. We also want to meet the commitment we made to the Task Force on Climate-related Financial Disclosures. Our climate change strategy plays a significant role in helping us do that.

1.10 CC. Indicate the documents and/or communications the organisation uses to publish TCFD disclosures.

specify

          Annual Sustainability report
        

SG 02. Publicly available RI policy or guidance documents

 

02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

Other, specify (1) description

          ESG integration policy: https://www.robeco.com/docm/docu-esg-integration.pdf
        

URL/Attachment

02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

URL/Attachment

URL/Attachment

URL/Attachment

02.3. Additional information [Optional].

Robeco’s mission is to enable our clients to achieve their financial and sustainability goals by providing superior investment returns and solutions. We are offering a compact, client-oriented and distinctive range of actively managed investment strategies and pension/investment solutions. This offering includes bespoke sustainability funds, multi-asset strategies, private equity strategies and alternative investments

To help achieve sustainability goals, environmental, social and governance (ESG) factors are routinely integrated into the entire fundamental equity, fixed income and quant ranges. We believe ESG integration leads to better-informed investment decisions and better risk-adjusted returns throughout an economic cycle.

Our mission is supported by our key investment beliefs that a research-based, quality-driven process delivers the best possible long-term results for our clients. We uniquely integrate fundamental, quantitative and sustainability research. Portfolio managers use the insights from all three, allowing them to make better-informed investment decisions.

Robeco serves their clients via different investment strategies with different investment processes. ESG integration is tailored to the characteristics of each individual investment strategy. ESG integration is applied for all strategies that have direct investments in credits and equities. For all pooled public funds Robeco’s stewardship policy, engagement policy, voting policy and exclusion policy apply

https://www.robeco.com/en/about-us/our-philosophy.html


SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

Robeco has a well-developed policy and framework to manage conflicts of interest. A 'Conflict of Interest procedure' is applicable for all our employees. Robeco maintains a policy to ensure objectivity in the investment process. As a crucial part of our business is about investment decisions it is important to be objective and avoid potential conflicts of interests. Robeco's guidelines on entertainment, gifts and anti-bribery state what type of conduct with parties in the investment community is acceptable.

Conflict of interests could arise when executing active ownership practices. Conflicts in relation to our stewardship responsibilities are covered by our ´Conflict of interest procedure´, by our policy ´Regulations regarding private investment transactions' and by our stewardship policy. If a possible conflict of interest is identified, our compliance department is always consulted.

An outline of the 'Conflict of Interest policy and the Robeco Stewardship policy are published on Robeco's website:

https://www.robeco.com/docm/docu-outline-conflicts-of-interest-policy.pdf

https://www.robeco.com/docm/docu-robeco-stewardship-policy.pdf

03.3. Additional information. [Optional]

Information on how we manage potential conflicts of interest in the investment process can be found via the policies below.

https://www.robeco.com/docm/docu-outline-conflicts-of-interest-policy.pdf

https://www.robeco.com/docm/docu-robeco-stewardship-policy.pdf


SG 04. Identifying incidents occurring within portfolios

04.1. Indicate if your organisation has a process for identifying and managing incidents that occur within investee entities.

04.2. Describe your process on managing incidents

The UN Global Compact and the OECD Guidelines for Multinational Enterprises outline minimal behavioral standards that serve as the basis for the enhance engagement program. The desired outcome is the identifiable elimination or remediation of any breach and enhancements in management processes aimed at avoiding any repeated breach. An enhanced engagement can finally be escalated with an exclusion from the investment universe of a company that does not improve its ESG behavior after the engagement has concluded. The process for enhanced engagement is a formal part of Robeco's exclusion policy and also described in Robeco’s stewardship policy. On a quarterly basis Robeco screens pre-defined data sources on companies that breach the UN Global Compact or the OECD Guidelines for Multinational Enterprises. The specialists in the Active Ownership team define if such an issue is both structural and severe and if engagement is warranted. This is the starting point for the enhanced engagement program. Unsuccessful engagement might lead to exclusion of the investment universe. We publicly report on companies that are excluded following unsuccessful engagement via our exclusion list. 

https://www.robeco.com/docm/docu-robeco-stewardship-policy.pdf

https://www.robeco.com/docm/docu-exclusion-policy-and-list.pdf


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