SI Debate: Why being contrarian is the right approach for climate investing

Earlier this week, Robeco launched its updated Climate and Nature Transition Plan 2025-2030. As we introduce our new targets and key actions, we realize the world is now in a very different place compared to when we first released our climate roadmap in 2021.

Back then, there was a wave of net-zero commitments from governments, industry and investors, reaching well over 80% of global emissions and GDP. Now, there are increasing regional differences, as the world is marked by geopolitical conflict, deglobalization, and eroding confidence in multilateral cooperation.

The new geopolitical and economic reality demands that we rebalance, innovate and segment our approach. At the same time, as investment engineers, we look beyond the current reality to the scientific facts. We keep a long-term perspective and we have always viewed sustainable investing as common sense and commercial logic. Climate risk is real; weather extremes are increasing. The science hasn’t changed, and therefore we maintain our firm conviction about the direction of travel.

Our vision remains that safeguarding economic, environmental and social assets is a prerequisite for a healthy economy and long-term value creation. Therefore, we are staying the course in the interest of our clients.

So, what is smarter and better about our updated roadmap? We would like to highlight three steps that we are taking.

Firstly, we are committed to improving the quality of our decarbonization efforts. We want to finance real-world emission reductions, not just reduce our financed emissions. Our carbon footprint reduction in the past years was primarily based on portfolio transactions using carbon data as the primary metric.

In the years ahead, we will rely more on forward-looking climate analytics – including our in-house climate traffic light – to evaluate whether companies have credible strategies and are truly prepared for the transition to a low-carbon economy. These insights enable us to assess transition readiness and to reliably distinguish climate transition leaders and climate solution providers.

We want more of our portfolio decarbonization to be based on exposure to these companies, as they are better positioned to manage climate-related risks, seize emerging opportunities and deliver long-term value in a decarbonizing world. This is smart investing: our investment research shows that climate leaders are outperforming laggards in their sector.

Secondly, we are integrating nature targets in our stewardship. That is because climate change and nature loss are highly connected. We have identified 274 companies in our investment universe with the highest impact on water consumption, hazardous waste and deforestation. Together, they contribute to around 38% of Robeco's overall biodiversity footprint.

With our biodiversity traffic light, we have so far assessed that over 70% of these companies are laggards. This assessment will guide our selection of companies to engage with, and it will also inform our voting approach. Similar to our climate stewardship, we use the biodiversity traffic light to build comprehensive, data-driven nature stewardship, and we are integrating both topics as we execute the program.

Thirdly, we are significantly increasing the scope of our targets, from around 40% to 60% of assets under management or advice. Our roadmap is built on our work with clients on their climate and nature goals. By working with clients, we amplify our contribution.

To make this more visible, client mandates and indices with material climate objectives will be included in the scope of our roadmap. In the coming years, we will continue to innovate in research, analytics, strategy design and tailored solutions to support our clients in navigating the evolving climate landscape.

We realize that our steps are contrarian. But we are not being naive. We are acutely aware of the challenges in the current markets, the elevated political uncertainty, and the postponement of climate action.

On the other hand, we are also aware of the risk of not seeing the opportunities. Our investment research shows that climate transition leaders show good performance versus climate laggards in their sector from 2015-2024, and again in the year to date in 2025. And while global emissions have continued to rise in the past five years, an increasing number of countries have managed to decouple economic growth from emissions on a relative or absolute basis.

Perhaps the biggest lesson from the past years is the confirmation that we cannot progress in isolation. Our ability as investors to meet our targets and ambitions depends on society’s wider progress. So we have rebalanced our approach and tailored it to regional realities. Yet we stay the course, working in partnership with our clients.

Our conviction remains that addressing the risks and opportunities from climate change and nature loss is in the long-term interest of our clients and our investment performance. We are confident that such a science-based approach is smarter, better and will gain traction again in our industry and the wider economy.