The latest developments in the ESG space.

Robeco
Rotterdam-headquartered Robeco has introduced a new climate index family, comprising:

1. Robeco Developed Low-Carbon Climate Leaders Tilt Equities Index;

2. Robeco Developed Paris-Aligned Climate Leaders Tilt Equities Index; and

3. Robeco Developed Climate Leaders Equities Index.

This trio is designed to cater to a broad base of investors at different stages of their climate investing journey, the firm said in a statement.

-- The first index offers a low-tracking error alternative to a passive market-cap weighted index, suitable for climate-conscious investors aiming to mitigate climate risk and support companies aligned with the Paris Agreement while obtaining the equity premium;

-- The second index targets investors who want to meet the minimum requirements for EU Paris-Aligned Benchmark, but are keen to integrate more forward-looking climate metrics and want more exposure to climate solutions providers; and

-- The third index focuses on climate leaders, appealing to investors looking to capitalise on the climate transition by investing in solution providers expected to lead the transition to a low-carbon economy.

Robeco said that client-specific preferences in custom indices has always been a core strength of its indices team; it allows for solutions that meet specific investment universes or decarbonisation targets. The team has developed an index construction algorithm which ensures relatively low turnover and high liquidity compared with other index providers – crucial for investors coming from passive.

“Our index construction approach takes turnover and liquidity into account to provide highly investable indices. We welcome an active dialogue with clients to develop custom indices that align with their climate and financial goals,” Joop Huij, head of Robeco said.

“We decided years ago to not only focus on carbon emissions data when looking at climate investing, we invested in resources to also evaluate other climate characteristics of companies such as their alignment with the Paris Agreement, whether companies provide solutions to lower the world’s future emissions and their level of climate transition risk,” Lucian Peppelenbos, climate strategist, added.

Candriam
Global multi-asset manager, Candriam has just launched the Candriam Equities L ESG Market Neutral Fund.

This “innovative” and actively managed strategy seeks to combine robust financial and ESG analysis within a systematic market neutral framework with the aim of offering investors sustainably aligned, diversified, and uncorrelated returns, the firm said in a statement.

The fund aims to target stable, positive returns, decorrelated from traditional asset classes, by investing in liquid stocks across global developed markets. It Invests long in companies which Candriam recognises as leaders in sustainability and shorts – those identified as less sustainable.

The fund is part of the newly-integrated Candriam Alternative Investments platform, enhancing its suite of innovative investment solutions and strengthening ESG integration within its alternative offering.

The fund is managed by Bart Goosens, global head of quantitative equity and deputy global head of alternative investments, and Dave Benichou, deputy head of quantitative equity. The portfolio management team collaborates with Candriam’s dedicated ESG investment and research team, led by Wim Van Hyfte, global head of ESG investments and research, who oversees the ESG analysis used in the investment process. Both teams, which have more than 20 years’ experience in quantitative equity investing and ESG research respectively, have been collaborating for over a decade, managing a range of long only ESG strategies.

The firm said that this fund is testament to its expertise in ESG, financial analysis and quantitative equity investing. It also adds to Candriam’s commitment to evolving its offering and providing its clients with diversified, sustainable and innovative solutions.

“By combining our differentiated ESG process with the extensive expertise of our quantitative equity team, we provide our clients with access to unique solutions that seeks to offer an attractive risk-return profile, whilst supporting meaningful social and environmental change,” Steeve Brument, global head of alternative Investments, said. “We are confident that the appetite for both alternative strategies and ESG-aligned solutions will continue to grow, and this launch further represents the next step in our efforts to further embed ESG integration within our alternatives solutions.”

The fund is available for distribution in Austria, Belgium, France, Germany, Luxembourg, the Netherlands, Switzerland, and the UK.