Robeco Exits Thermal Coal, Oil Sands in all Funds
International asset manager Robeco announced today that it will exclude investments in thermal coal, oil sands and Arctic drilling from all its mutual funds. The new exclusions will apply to companies that derive 25% or more of their revenue from thermal coal or oil sands, or 10% or more from Arctic drilling.
Today’s announcement is an extension of Robeco’s existing fossil fuel policy, which currently excludes thermal coal-related assets from the firms sustainable and impact strategies. The new policy applies to all of Robeco’s mutual funds, including sub-advised funds, but excludes client-specific funds and mandates.
According to Robeco, these specific areas were chosen for exclusion given their uniquely significant environmental impacts. The firm noted that thermal coal is by far the highest carbon-emitting source of energy in the global fuel mix, while oil sands are among the most carbon-intensive means of crude oil production, and Arctic drilling poses higher risks of spills compared to conventional oil and gas exploration, with potentially irreversible impacts on the sensitive Arctic ecosystem.
Robeco also stated that while it often chooses the path of engagement with companies to effect change, it believes that in the case of these companies, it is likely to have little impact, and that it prefers to concentrate its efforts on sectors and companies where engagement will be more effective.
Victor Verberk, CIO Fixed Income and Sustainability at Robeco, said:
“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’re going to be a better asset manager. 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. 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.”
Robeco’s initiative follows similar moves by other investors and companies to distance themselves from thermal coal and other fossil fuel sectors with poor sustainability profiles. Earlier this week, for example, industrial giant GE announced that it was exiting the new build coal power market. This year has seen several prominent investors, pension funds and investment banks announcing similar policies.
According to Robeco, its exclusion of fossil fuel companies will be completed by the end of Q4 2020.