With a growing team in Asia and a year of thematic engagement coming to a close, ESG Clarity sits down with Ghislaine Nadaud, senior sustainable investing specialist at Robeco, in the firm’s Singapore offices to discuss sustainable regulation, regional concerns and the firm’s engagement process.
What’s driving sustainable investing in Singapore?
Here in Singapore the [Monetary Authority of Singapore] MAS is really driving [sustainable investing]. The guidelines are voluntary but require follow up, and its environmental risk management guidelines have led to more dialogue. There’s a lot of capacity building here, and we hope to contribute to that. For example, we share our approach on climate, how we measure emissions in our portfolios, our approach to biodiversity. At the same time, we try to learn from the local context.
It can be tricky with so many different frameworks, would you say MAS is broadly aligned with global initiatives?
It’s closely following what’s happening overall – it refers to the EU taxonomy but also the Asia context. There is a lot of focus on transition here and because of the different context we might need a different approach. So [regulators] here are especially focused on hard-to-abate sectors, blended finance and the just transition.
What are the social issues unique to the region?
We’ve had a global focus to engagement but now we have a team here we’re looking into APAC-focused engagement next year. The just transition looks different here than in Europe where it’s mainly focused on the workforce. Here there’s more community focus because there are still so many Indigenous People here.
How do you plan to grow that team here?
We’re three in total in Singapore, we have our sustainable investing research specialist as well, and we have one engagement specialist in Hong Kong. We are part of the Sustainable Investing Centre of Expertise, which Carola [van Lamoen, Robeco’s head of sustainable investing] is heading up – that’s around 50 people now. Soon we’re going to start working with universities for interns or juniors.
And what’s been the focus for your engagement team?
This year it was natural resources, diversity and inclusion, and net zero, and Nature Action 100+ (which will be launched at COP15 this year). Next year, it’s likely to be the just transition in APAC, biodiversity, and then we’re focusing on forced labour. The next step will be a client panel to see what our clients are also interested in.
Robeco launched a biodiversity equities strategy in Europe this week, read more in ESG Clarity EU.
How receptive do you find companies in Asia are to engagement?
Because of growing investor pressure, companies are more responsive, and that will only continue. Our engagements address specific topics but we have always tried to give guidance or suggestions for the company rather than being prescriptive.
What’s your escalation strategy for engagement and when would you consider divestment?
Our engagement process is normally three years and we engage at least quarterly. Then we have enhanced engagement, which is event-driven, such as if there is a breach of the UN Global Compact principles. That’s also three years and if it is not successful we would consider divesting. [For the latter type of engagement] we have a controversial behaviour committee that can make a proposal and the fund decides on the proposal, and then finally the sustainability decides, which is chaired by our CIO.
Tell us about the progress on the Sustainable Investing Open Access Initiative.
Clients can now use it and test it, but we’re aiming to add more information because for now it’s only the fundamental scores. We are aiming to include automatic automated scores and other IP data as well.