In our white paper we explain how transition investing requires a comprehensive approach, balancing impact with financial health, operational track record and the sector’s competitive dynamics. Climate change demands broad solutions beyond just clean technologies, addressing equity for different stakeholders dependent on fossil fuels, and improving efficiency in sectors like food, transport, and buildings. While renewables and clean-tech sectors face challenges from higher interest rates, they still present growth opportunities. High-performing categories include energy efficiency solutions for buildings and waste management, which have both shown consistent returns, outperforming the MSCI All Country World Index over three- and ten-year periods.
Using Robeco’s in-house Climate Analytics toolbox, a useful framework to identify so-called transition leaders and laggards, we’ve found that transition leaders, particularly in high-impact sectors like energy and utilities, are likely to outperform laggards due to improved resource efficiency and better access to capital. This investment approach also highlights the difference between developed and emerging markets, with DM laggards outperforming EM counterparts due to sector biases. A diversified strategy focusing on practical climate solutions and transition leaders can capture the potential upside from improved efficiency and reduced environmental impact, making transition investing a viable path to achieving net zero with the potential for strong alpha generation.
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The contents of this document have not been reviewed by the Securities and Futures Commission ("SFC") in Hong Kong. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice. This document has been distributed by Robeco Hong Kong Limited (‘Robeco’). Robeco is regulated by the SFC in Hong Kong. This document has been prepared on a confidential basis solely for the recipient and is for information purposes only. Any reproduction or distribution of this documentation, in whole or in part, or the disclosure of its contents, without the prior written consent of Robeco, is prohibited. By accepting this documentation, the recipient agrees to the foregoing This document is intended to provide the reader with information on Robeco’s specific capabilities, but does not constitute a recommendation to buy or sell certain securities or investment products. Investment decisions should only be based on the relevant prospectus and on thorough financial, fiscal and legal advice. Please refer to the relevant offering documents for details including the risk factors before making any investment decisions. The contents of this document are based upon sources of information believed to be reliable. This document is not intended for distribution to or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. Investment Involves risks. Historical returns are provided for illustrative purposes only and do not necessarily reflect Robeco’s expectations for the future. The value of your investments may fluctuate. Past performance is no indication of current or future performance.