Sustainable stories
How to shift investing from creating wealth, to wealth AND well-being
Robeco’s sustainability investing team reveals why meeting the needs of the present generation without compromising the next will take innovation, ingenuity and an investment strategy that puts ESG integration front and centre.
When more than half of your country’s population lives at or below sea level, you can be sure that innovation is part and parcel of everyday life. The low-lying Netherlands has been fighting back water since the 14th century when a system of windmills and dykes was conceived to protect its farmland from flooding. The system enabled farmers to reclaim land from the sea by pumping water from soggy marshes leaving behind ‘polders’, essentially islands of dry, arable land.
Over seven hundred years later the polderlands are now home to more than 60% of the country’s population and generate 70% of the Netherland’s gross domestic product. If building a modern economy from a former seabed wasn’t innovative enough, the social impact of poldering has also been profound. Historically those who lived on the marshlands had to co-operate to share the costs of maintaining the system of windmills and dykes.
Over the years this collaborative culture became so embedded amongst the Dutch that the government started to adopt similar principles in its running of the country. The resulting ‘polder model’ which came to prominence in the early 1980’s encouraged dialogue between three social partners; trade unions, employers and the government, with consensus-building across all three parties the ultimate objective. For many years the polder model helped to create social harmony, improved international competitiveness and increased employment. All conditions that irrespective of geography, provide a sustainable basis for investment.
To find all you need to know about Sustainability Investing, check out the Robeco Essentials educational website
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To find all you need to know about Sustainability Investing, check out the Robeco Essentials educational website |
Walk the talk
Dutch asset manager Robeco, are specialists in sustainable investing. With over €100 billion of assets under management it has been keeping a constant dialogue with companies on their commitment to ESG principles. By integrating this data into its investment processes it has built up a wealth of information and expertise. ‘I think sustainability is quite ingrained in the Dutch society,’ says Masja Zandbergen, Robeco’s head of ESG Integration. ‘We believe in coming to a compromise by listening to all stakeholders when making decisions rather than just looking at the financial stakeholders or the non-financial stakeholders, so it’s also very much in our culture to think long-term and to think sustainably.’
As a firm Robeco doesn’t just talk the talk, but it also walks the talk, as not only is sustainability at the centre of its investment process, but it also plays a big part in its operations as well. Its headquarters in Rotterdam were designed by architects Fokkema & Partners with connectivity between employs and sustainability topping the brief. Since 2003 Robeco has also been an active owner so that means voting and engaging on all of its shares. Its emerging markets team has had its own questionnaire on corporate governance issues since 2000, that’s nearly twenty years of thinking sustainably in markets that are just beginning to come to prominence today.
Add to this the acquisition of Sustainable Asset Management (SAM) in 2005 which enabled Robeco to incorporate SAM’s sustainability data into its analysis. ‘Robeco SAM has been gathering sustainability information of companies since 1995 so they have been thinking carefully about how value is being created across all sorts of industries for some time,’ says Zandbergen.
Understanding the sustainability trends and how companies will be affected by them is no small task but it is vital work if Robeco is to ensure it is backing the business models that not only will stay relevant, but will thrive in an increasingly resource restrained world. ‘What we’re doing here is making sure we invest in the right companies that innovate towards a sustainable future,’ she adds.
A virtuous circle
However while the polder model is all about compromise, Zandbergen is very clear that investors needn’t have to sacrifice returns to invest in a sustainable fashion. ‘It’s about having a profitable investment, and doing the right thing when it comes to using resources, C02 emissions and labour. This takes a very holistic approach to investing and sustainability.’ That means looking right the way across equity and bond markets in search of companies big and small and governments developed or emerging that, just the like the Dutch marshland dwellers, are working together to build systems to innovate their way out of the confines and risks environmental, social or governance factors may bring in the future.
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Are you keen to join the Sustainability Investing revolution, but not sure where to start? Download Robeco’s Big Book of SI here. |
It’s a process Zandbergen believes creates a virtuous circle, as when investment teams get involved with sustainability and gain more experience they also become more confident and are able to take positions with more conviction. Evidence of this growing confidence was borne out in a recent research paper Robeco undertook which revealed approximately 50% of its equity and 36% of its credit and fixed income allocations are now influenced by its Environmental, Social and Governance (ESG) analysis. ‘Given these numbers, I would say sustainability is pretty integral to what we do here at Robeco,’ concluded Zandbergen.
Watch our mini documentary series to hear more on how Robeco’s suitable investing team identifies the companies that will lead us into a future where the planet and profits can co-exist.
It’s a process Zandbergen believes creates a virtuous circle, as when investment teams get involved with sustainability and gain more experience they also become more confident and are able to take positions with more conviction. Evidence of this growing confidence was borne out in a recent research paper Robeco undertook which revealed approximately 50% of its equity and 36% of its credit and fixed income allocations are now influenced by its Environmental, Social and Governance (ESG) analysis. ‘Given these numbers, I would say sustainability is pretty integral to what we do here at Robeco,’ concluded Zandbergen.
Watch our mini documentary series to hear more on how Robeco’s suitable investing team identifies the companies that will lead us into a future where the planet and profits can co-exist.
Are you keen to join the Sustainability Investing revolution, but not sure where to start? Download Robeco’s Big Book of SI here.
[1] https://link.springer.com/article/10.1007/s11356-009-0156-y
[2] https://file.scirp.org/pdf/NS20120100003_72866800.pdf
[3] International Monetary Fund, “List of Countries by Projected GDP”, October 21, 2016, http://statisticstimes.com/economy/countries-by-projected-gdp.php