Robeco has launched two new equity strategies – the Emerging Markets Climate Transition strategy, and the Transition Asian Equities strategy – in a bid to contribute towards the net-zero drive.
The former will buy stocks specifically working on the transition toward a low-carbon economy in the emerging markets, while the latter is a broader Asia fund looking at both the on the climate transition but also other environmental and social objectives.
The firm said some $125trn will be needed to reach net zero by 2050 and these funds aim to provide more opportunities for the growth of sustainable finance.
The pursuit of net zero depends on more than just investing in existing green technology, however. Non-green businesses and sectors need the tools and funding to become more sustainable over time.
Both new funds will align with the goals of the Paris Agreement, and Asia’s wider environmental objectives.
“Effective transition is about greening the entire economy and not just growing the green economy,” the firm said in a statement. “The world doesn't just need investments in solar panels and wind farms; it needs transition finance to provide the funding for businesses and sectors that are not so green today but will become greener over time.”
Robeco also repositioned two of its existing fixed-income strategies into sustainable funds: the Transition Emerging Credits strategy (formerly Sustainable Emerging Credits) and the Transition Asian Bonds strategy (formerly Sustainable Asian Bonds).
Lucian Peppenlenbos, climate and biodiversity strategist at Robeco, said there were opportunities in transition finance and that these funds would “identify companies leading the transition”.
He added the aim was to “foster positive change and ensure that high-emitting companies are a part of the solution” while also delivering value and creating alpha for investors.
Indeed, Robeco research has found that companies leading the transition to net zero have historically outperformed laggards, both in developed and emerging markets.