Manager of the year, Award for innovation (funds & portfolios) - Robeco

Asset manager Robeco aims to "remain at the cutting edge" of environmental, social and governance (ESG) financing as it develops into the mainstream, said Peter Walsh, managing director and head of Robeco UK.

"This has been an extremely important year for Robeco, that has demonstrated leadership in multiple areas," commented the judges who gave the company two awards, for 'Best Manager' and 'Best Innovation for funds and portfolios'.

Robeco saw the year as further progression in its sustainability strategy: "We've been incorporating sustainability into our investment processes for years," said Walsh.

"We will always incorporate sustainability throughout our processes and we'll continue to lead the industry in the way we do that. However, as the market catches up and sustainability becomes mainstream, we will look to stay one step ahead.

"Looking out on the horizon we see impact investing becoming more important, a trend that we will continue to innovate around," Walsh added.

One example of the firm's innovation is its integration of sustainability criteria into its credit portfolios. This led to the launch of the RobecoSAM Global SDG Credits strategy in May 2018.

"When you look at sustainability alone, it's something that typically pertains to the equities world.  Most asset managers talking about sustainability will focus on their equities propositions. I think Robeco is quite unique, as we've been incorporating sustainability into our credit strategies for over 10 years. We've built a very strong credit business, that has sustainability built into its core."

Over 2018, the company grew its sustainable assets under management (AUM) by 70% to €27 billion ($30 billion). But it has also integrated ESG factors into its mainstream investment process, which had €117 billion in AUM as of March.

Robeco's ESG activities also include a significant commitment to active ownership. Last year it began three-year engagements on climate change relating to high carbon emitters, food security, cyber security, good governance and waste management, specifically in the solar and technology industries.

2018 also saw the publication of Robeco's Big Book of Sustainability Investing, a guide for investors looking to enter the market. The book looks at the current state of sustainable investing and market trends as well as Robeco's approach to the area. A follow-up publication this year – Sustainability Inside – focuses on ESG integration.

The RobecoSAM Global SDG Credits strategy was launched in response to pressure from pension funds who wanted to target the Sustainable Development Goals (SDGs) but felt there were insufficient ways to quantify a company's contribution to the goals, according to Robeco.

The fund attempts to measure companies' impact on the SDGs, integrates financially material ESG information of debt issuers and applies a values-based exclusion policy. It will invest only in bonds of companies that achieve a positive, or at least neutral, SDG rating.

"With regards to SDGs, it is an area we are beginning to see investment solutions in equities, but in credit we have not seen any innovation.   We believe we are the first manager to build a strategy around the SDGs in credit, demonstrating our thought leadership in this space," added Walsh.

In its first year the fund has seen returns of 6.18%, which is 0.91% above its benchmark, the Bloomberg Barclays Global Aggregate Corporates.

As for its impact, it has saved 7,362 tonnes of carbon emissions, compared with the footprint of its benchmark.

Figure 1: Annualized performance RobecoSAM Global SDG Credits (hedged into EUR)

Figure 2