Robeco launches Global Climate Leaders Tilt Indices

Robeco has launched new Global Climate Leaders Tilt Indices, which will draw on a number of Robeco's proprietary sustainability and investment intellectual property (IP) to identify future transition leaders and avoid potential laggards.

The indices focus on financing reduced emissions, not just reducing financed emissions, Robeco said.

"Using only backward-looking approach can result in reduced exposure to transition leaders, unintended sector concentrations, limited recognition of forward-looking climate progress, and insufficient allocation to companies enabling real-world decarbonisation," Robeco's whitepaper read.

"As investors increasingly seek to support the transition to a net-zero economy, there is a growing need for climate indices that go beyond carbon reduction and identify companies that are best positioned to drive and benefit from the transition."

The indices take a multi-dimensional approach and combine four complementary climate dimensions to identify the companies best positioned to benefit from and contribute to the low-carbon transition.

The framework is backed by Robeco's forward-looking Climate Traffic Light methodology and Climate Beta insights. The Climate Traffic Light assesses the credibility of a company's transition journey, evaluating factors such as emissions pathways, climate governance, capital allocation and decarbonisation commitments to distinguish future leaders from laggards.

A forward-looking tilting approach helps increase the investable universe by making space for companies with high current emissions that may be investing aggressively in decarbonisation technologies and possess credible transition plans.

"Climate investing is no longer simply about reducing emissions. It is about identifying future winners, financing the transition and delivering measurable real-world impact without compromising investment outcomes," it said.

"Robeco's Global Climate Leaders Tilt Indices have been designed for this next phase of climate investing. By combining forward-looking climate insights, proprietary sustainability expertise, proven factor investing and disciplined portfolio construction, the strategies offer institutional investors differentiated solutions that seeks to deliver climate alignment, alpha potential and robust risk control within a single framework."