Investing in Response to Climate Change

RobecoSAM focuses on thought leadership and actions supporting sustainability investing. This is the starting point for proactively managing the many ESG issues that arise. When it comes to fossil fuels, we are focusing on reducing the carbon emissions associated with our portfolios while exploring avenues for selective engagement.

The divestment campaign aimed at fossil fuels (comprising producers of crude oil, natural gas and thermal coal) has placed a spotlight on the role of asset owners and managers in the run up to a global climate agreement at the upcoming UNFCCC meeting in Paris in December 2015. Global population is rising, average incomes are increasing, and more people are seeking to be included in the managed energy system. The use of fossil fuels represents the largest contributor to atmospheric carbon dioxide and concentrations of carbon dioxide are rising to levels that risk triggering serious climate change. Yet, in the past, adjustments to the energy system have been very slow and usually measured in decades. Today’s problem is neither small nor simple.

The investment industry is still adjusting to the magnitude of this challenge. The Asset Owners Disclosure Project (AODP) reports that among the top 500 asset owners, only 7% of assets owners are able to calculate the emissions associated with their portfolios, only 1.4% of asset owners have reduced the carbon intensity of their investments from the previous year, and only 2% of asset owners have an emissions intensity reduction target for the coming year.

In this debate, RobecoSAM recognizes that climate change is the largest and most complex of sustainability issues, and that it is inextricably linked to many of the other challenges that we are concerned with, such as water scarcity, sustainable agribusiness, and resource efficiency. We are therefore keen to play our part in ways that reflect our role, approach and strategies. As an asset manager, RobecoSAM’s approach is defined by our mission to achieve maximum returns for minimum risk while also delivering thought leadership and actions supporting sustainability investing. With respect to climate change, several of our thematic strategies already do this by identifying and investing in companies that enable the more efficient use of energy and natural resources and we now want to broaden this approach.

In June 2015, RobecoSAM became a signatory of the Portfolio Decarbonization Coalition. As part of this important move, we now provide background on our commitments to:

  • Review the merits of selective fossil fuel divestment
  • Commence engagement with the fossil fuel sector by focusing on electric utilities
  • Aspire to reduce the GHG emissions attributable to our core investment strategies by 20% before 15th December 2015