Robeco today launched its new Sustainability Report 2022, which provides a detailed description and comprehensive assessment of how the Dutch investment management firm integrates sustainability into all its activities. The report also highlights the sustainable investment solutions Robeco offers its clients and how it implements its active engagement initiatives.
Robeco’s Sustainability Report 2022 includes a materiality analysis conducted over the past year, with the objective of identifying the most relevant issues in terms of both investments and internal operations. To this end, the concept of “dual materiality” was applied, taking into account both material and financial impact. Among the highlights of 2022 was the launch of Robeco’s Sustainable Investment Open Access Initiative. Through this initiative, Robeco took the first step in providing access to data related to the Sustainable Development Goals (SDGs) to a community of academic experts and clients. In addition, Robeco has partnered with the World Wide Fund for Nature (WWF) on biodiversity issues, a topic relevant to both Robeco’s investment processes and responsible engagement initiatives.
“At Robeco, we want to promote integrated thinking throughout the organisation. This means that decisions made at all levels of our company must take into account not only the usual financial and operational considerations, but also environmental, social and governance (ESG) factors. The Sustainability Report covers both aspects. I hope that all stakeholders will enjoy reading this report and find it enlightening and informative. I also hope you will share your views with us and make a critical judgement of the actions we are taking, as this is the only way to improve every day and make a difference.
Karin van Baardwijk, Robeco CEO.
The importance of sustainability risk management in the current context
The manager recognizes four categories of risk that it considers particularly important because of their potential impact on the execution of its strategy, the conduct of its business, and the maintenance of a sound financial position.
- Sustainability risks: There are risks associated with environmental, social, and governance (ESG) aspects that may negatively affect the value of investments in Robeco’s managed portfolios, such as climate change. If not mitigated, these risks could have a direct impact on clients and, indirectly, represent a risk for the company as a whole.
- Strategic risks: External factors, such as changes in the economy on a large scale, increased pressure on fees, and growing competition, can have a negative impact on profitability. It is important to constantly monitor these developments and maintain a diversified client, asset, and product base to reduce their potential impact.
- Financial risks: We are exposed to the risk that our cash balances and receivables may be subject to default by counterparties on credit terms. To mitigate this risk, Robeco carefully selects and monitors our financial counterparties. We also manage market risks by offering a wide range of products and services across regions, currencies, and asset classes. In addition, we have established a framework to ensure that we have a strong liquidity position to mitigate the risk of illiquidity and ensure we meet capital requirements.
- Operational and compliance risks: At Robeco, we offer a wide range of services and products to various types of clients in different regions of the world. This means we are exposed to operational risks, such as process failures, cybersecurity events, and non-compliance with laws and regulations. To manage these risks, we have a robust control framework that identifies key risks throughout the investment process. In addition, we implement measures to reduce the likelihood of these risks occurring and minimize their impact (risk mitigation). We have an incident management system that evaluates operational incidents with the aim of improving the quality and robustness of our operational processes. In addition, we inform our customers about mistakes made and their consequences, in order to maintain transparent and accountable communication.
Sustainable investing remains an essential part of Robeco’s strategy for the period 2021-2025. During 2022, the number of assets under management by Robeco reached EUR 171 billion, while engagement activities of EUR 350 billion were conducted.
