Robeco Unveils New Climate Indices Featuring Enhanced Metrics and Customization Options

Advanced Climate Metrics: Robeco's latest indices go beyond traditional carbon emissions data by incorporating forward-looking climate metrics.

Investor Diversification: The indices cater to different climate strategies, ranging from low-tracking error options to Paris-Aligned benchmarks.

Tailored Solutions: Robeco provides customizable indices, ensuring low turnover and high liquidity to meet the diverse needs of investors.

Robeco has introduced an innovative family of climate indices aimed at addressing the evolving demands of investors pursuing various climate strategies. This suite includes indices like the "Robeco Developed Low-Carbon Climate Leaders Tilt Equities Index," the "Robeco Developed Paris-Aligned Climate Leaders Tilt Equities Index," and the "Robeco Developed Climate Leaders Equities Index." These indices incorporate advanced climate metrics, offering investors refined tools to align with both climate and financial goals.

Investors are increasingly seeking climate indices that move beyond simply reducing historical carbon emissions. Robeco’s new indices integrate advanced in-house metrics, such as the Climate Traffic Light, which evaluates a company’s alignment with the Paris Agreement, the SDG framework to identify climate solutions, and Climate Beta to assess climate transition risks. These tools enable investors to make decisions based on a company’s projected climate impact.

Lucian Peppelenbos, Robeco’s Climate Strategist, emphasized this innovative approach: “We recognized early on that focusing solely on carbon emissions wasn’t sufficient for climate investing. We've invested in resources to evaluate other critical climate characteristics, including alignment with the Paris Agreement, contributions to lowering future emissions, and climate transition risks. It's exciting to now offer this expertise to a broader range of investors.”

The new indices offer a range of options to suit different investment strategies. One index provides a low-tracking error alternative, ideal for investors aiming to mitigate climate risk while staying aligned with the Paris Agreement. Another index meets EU Paris-Aligned Benchmark standards, incorporating additional forward-looking metrics for those seeking exposure to climate solution providers. The third index targets companies poised to lead the transition to a low-carbon economy, attracting investors focused on climate transition leaders.

Customization is a key feature of Robeco’s index offering. The indices can be tailored to specific investment universes or decarbonization goals, supported by an algorithm that ensures low turnover and high liquidity—crucial for passive investors. Joop Huij, Head of Robeco Indices, highlighted the value of this flexibility: “Our new climate index family offers a more nuanced approach to climate investing compared to traditional carbon-focused indices. By considering turnover and liquidity, we ensure highly investable indices. We’re eager to collaborate with clients to develop custom indices that align with their unique climate and financial objectives.”

Robeco’s new climate indices represent a significant step forward in climate investing, equipping investors with the tools to incorporate forward-looking climate metrics and tailor their portfolios to meet both climate and financial targets.