Dutch asset managed intends to complete process of integrating new investment policy by the end of 2020
Robeco is to exclude investments in thermal coal, oil sands and Arctic drilling from all of its mutual funds, with the process expected to be completed by the end of 2020, it said on Thursday.
From now on, companies that derive 25 per cent or more of their revenues from thermal coal or oil sands, or 10 per cent or more from Arctic drilling, will be exluded from all investment portfolios, the Dutch investor, which manages $144bn in ESG-integrated assets.
Previously, a thermal coal exclusion policy already applied to the firm's most sustainable and impact strategies. The new policy will apply to all of the firm's mutual funds, excluding client-specific funds and mandates but including sub-advised funds, it said.
Robeco cited concerns that thermal coal is the highest carbon-emitting source of energy, while oil sands are among the most carbon-intensive means of crude oil production. In addition, it said Arctic drilling poses higher risks of spills compared to conventional oil and gas exploration and has potentially irreversible impacts on the sensitive Arctic ecosystem.
The firm added that while it believes actively engaging with its investee companies is a strategy that can benefit clients and the wider society, it does not believe that engagement with these particular companies will lead to significant change and therefore prefers to focus its efforts elsewhere.
"Investing is not only about creating wealth but also about contributing to wellbeing, and we are fully convinced that if you focus on sustainability, you are going to be a better asset manager," said Victor Verberk, CIO for fixed income and sustainability at Robeco. "Our move to exclude investments in fossil fuels from our funds is a further step in our efforts to lower the carbon footprint of our investments, transitioning to a lower carbon economy."
He added: "As global leader in sustainable investing we are committed to the Paris agreement, which aims to limit the rise in global temperatures to well below 2°C. This will require substantial reductions in global greenhouse gas emissions over the next few decades."
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