The effects of rapid industrialisation and commercialisation in Asian emerging markets have placed sustainability in the spotlight, and the next generation is increasingly taking note.“What I see in Asia is the transferral of hard assets from the first generation to soft assets in the second generation,” says Tony Edwards, managing director and CEO, Asia Pacific, at Robeco. “This next generation is more aware of the impact of industrialisation over the last two or three decades and is keen on the opportunity – not cost – of investing into companies that address these issues.”
According to Edwards, Robeco’s long heritage of investing responsibly is not a value-added feature but rather a philosophy. And for Robeco, which has its headquarters in Rotterdam, the approach is not so much about altruism as it is about enhancing performance with non-traditional metrics.
For example, Robeco made a call to sit on the sidelines during enormous debt issuances by smaller gas-related energy companies last year, despite the sector making up 15% of the index. It did this on concerns over fracking and the sustainability of energy supplies. It subsequently decided have zero holdings in this space. And, as a result, the major sell-off in late 2014 was completely avoided.
“We see sustainability as a way of expressing our belief that management, companies and investors need to look at not just the hard financial facts, like you do in accounts, but also soft financial facts,” Edwards says.
Partnering with Japanese financial services provider ORIX and the Asian Development Bank, Robeco is about to rollout a private equity strategy in the region focused on addressing resource inefficiency, ranging from inefficient heating, waste management, to water treatment.
With an established practice of measuring and reporting ESG (environmental, social and governance) issues in its portfolios and an inherently rooted philosophy of innovating sustainable investment solutions, selectors took note of the prowess of Robeco and proudly voted it as this year’s Best Fund Provider – Socially Responsible Investment.