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Principal Adverse Impact StatementROBECO INSTITUTIONAL ASSET MANAGEMENT
July 2021
2 • Principal Adverse Impact
Contents
1. Summary 3
1.1 Principal adverse impact 3
1.2 Identifying and prioritizing principal adverse impact 3
1.3 Addressing principal adverse impact 3
2. Description of principal adverse sustainability impacts 5
2.1 Sustainable Investing at Robeco 5
2.2 Principal adverse impact 5
2.3 Planned actions to mitigate principal adverse impact 5
3. Description of policies to identify and prioritize principal adverse sustainability impacts 7
3.1 Governance of principal adverse impact 7
3.2 Identifying principle adverse impact 7
3.3 Prioritizing principle adverse impact at product level 8
4. Engagement policies 9
4.1 Corporate Engagement 9
4.2 Public Policy Engagement 9
4.3 Proxy Voting 10
5. Reference to international standards 11
5.1 Approach to Human Rights 11
5.2 Approach to Climate change 11
5.3 Approach to Biodiversity 12
Appendix: Principal adverse impact indicators 13
Principal Adverse Impact • 3
1. Summary
1.1 Principal adverse impactRobeco acknowledges the responsibility of the asset management industry towards climate change
risks and other principal adverse impacts through the investment decisions that we make and the
contact we have with investee companies and other institutions. The concept of Principal Adverse
Impact (PAI) is as follows1:
“Negative, material or likely to be material effects on sustainability factors that are caused,
compounded by or directly linked to investment decisions and advice performed by the legal entity.”
Under SFDR, Robeco considers 18 mandatory indicators on greenhouse gas emissions, biodiversity,
water, waste, and social indicators applicable to companies, sovereigns and supranationals, and real
estate assets. In addition, there are 22 additional climate and other environment-related indicators
defined, as well as 24 additional indicators related to social factors and employees, respect for
human rights, anti-corruption and anti-bribery matters on which reporting and integration is
encouraged.
1.2 Identifying and prioritizing principal adverse impactRobeco has a long history of ESG integration and the use of ESG data in its investment processes and
has due diligence policies in place to identify and prioritize relevant adverse impacts and indicators
on sustainability factors. The requirements under the SFDR RTS are detailed and require additional
ESG data, predominantly on asset-level, that are currently not fully available within Robeco. Robeco
has performed an initial data analysis and is in the process of acquiring additional data from
external data providers to meet reporting obligations under the EU SFDR. Once the relevant data are
available, the methodologies to measure principal adverse sustainability impacts can be finalized
and will be added to this statement (expected in Q4 2021).
On an entity level, taking into account the available sustainability data, Robeco has identified and
prioritized the PAIs and indicators relevant to the organization’s overall investment strategy (see
table on the next page). If the availability of data improves, more indicators may be added.
1.3 Addressing principal adverse impactRobeco takes both mandatory and non-mandatory adverse impacts into account in its due
diligence procedures in the selection and ongoing monitoring of investments through various
methods ranging from ESG Integration, exclusions, reduction of emissions thresholds, voting and
engagement, amongst other planned actions. In addition, as an entity, Robeco has joined the Net
Zero Asset Manager Initiative and signed the Finance for Biodiversity Pledge, which are relevant
to mitigating potential adverse impact as a company. The actions Robeco has taken to avoid and
reduce adverse sustainability impacts are reported on in our annual Sustainability Report which
can be found on our website. As of 2022 reporting will be presented via the template related to PAI
reporting as referred to in the ESA’s final report on the SFDR regulated technical standards2.
1. https://www.esma.europa.eu/press-news/esma-news/three-european-supervisory-authorities-publish-final-report-and-draft-rts
2. JC 2021 03
4 • Principal Adverse Impact
Table 1: Overview of current PAIs identified
Scope Theme PAI indicator Table Number
Investee companies Climate and other environment-
related indicators
GHG emissions 1 1
Carbon footprint 1 2
GHG intensity of investee companies 1 3
Exposure to companies active in the fossil fuel sector 1 4
Share of non-renewable energy consumption and production 1 5
Energy consumption intensity per high impact climate sector 1 6
Activities negatively affecting biodiversity sensitive areas 1 7
Emissions to water 1 8
Hazardous waste ratio 1 9
Investing in companies without carbon emission reduction initiatives 2 4
Natural species and protected areas 2 14
Social and Employee, Respect for
Human Rights, Anti corruption and
Anti Bribery matters
Violations of UN Global Compact principles and Organisation for
Economic Cooperation and Development (OECD) Guidelines for
Multinational Enterprises
1
10
Lack of processes and compliance mechanisms to monitor compliance
with UN Global Compact principles and OECD Guidelines for
Multinational Enterprises
1
11
Unadjusted gender pay gap 1 12
Board gender diversity 1 13
Exposure to controversial weapons (antipersonnel mines, cluster
munitions, chemical weapons and biological weapons)
1 14
Excessive CEO pay ratio 3 8
Sovereigns and Supranationals
Climate and other environment-
related indicators
Share of bonds not certified as green under a future EU act setting up an
EU Green Bond Standard
2 17
GHG intensity 1 15
Social and Employee, Respect for
Human Rights, Anti corruption and
Anti Bribery matters
Investee countries subject to social violations
1
16
Real Estate Fossil fuels Share of investments in real estate assets involved in the extraction,
storage, transport or manufacture of fossil fuels
1 17
Energy efficiency Share of investments in energy-inefficient real estate assets 1 18
Principal Adverse Impact • 5
2.1 IntroductionAs of 1 January 2022, Robeco will describe in this section adverse impacts that qualify as principal,
as well as the actions planned or targets set for the first reference period to avoid or reduce principal
adverse impact. For now, the following paragraphs aim to provide an introduction to how Robeco
plans to set targets and integrate principal adverse sustainability impacts, given that sustainability is
an essential component of Robeco’s 2021-2025 strategy. This strategy includes, but is not limited to,
the following:
- In line with our Net-Zero Commitment, we will establish an ambitious climate strategy,
including a decarbonization trajectory and forward-looking indicators. Carbon objectives will be
set for all our funds, aiming for an average of 7% reductions per annum, to help meet our net-
zero 2050 ambition. Initially confined to Robeco funds only, the scope of our decarbonization
strategy will gradually increase to include client mandates and reach 100% of AUM.
- Biodiversity loss will have a large impact on the ability of companies to produce food at the
current scale of production. In line with the Finance for Biodiversity Pledge, Robeco will have
assessed its individual biodiversity footprint, set targets and report on progress against these
biodiversity targets by 2024 the latest. In addition, Robeco will continue to collaborate and
engage with stakeholders, continuing to develop thought leadership, and building on the
knowledge gained in advocating for sustainable palm oil production.
- Robeco embraces ‘doing no significant harm’ to the Sustainable Development Goals in its
operations and in its asset management activities.
Robeco’s current approach to doing no significant harm, and thereby mitigating negative impact,
allows for the integration of principal adverse impact, as introduced by the EU SFDR Framework, in
our investment processes.
2.2 Principal adverse impact The concept of Principal Adverse Impact (PAI) is described in the EU Regulation on sustainability-
related disclosures in the financial services sector (SFDR) . The definition of PAI is as follows:
“Negative, material or likely to be material effects on sustainability factors that are caused,
compounded by or directly linked to investment decisions and advice performed by the legal entity.”
More concretely, the SFDR framework will require the consideration of 18 mandatory indicators on
greenhouse gas emissions, biodiversity, water, waste, and social indicators applicable to companies,
sovereigns and supranationals, and real estate assets. In addition, there are 22 additional climate
and other environment-related indicators defined, as well as 24 additional indicators for social and
employee, respect for human rights, anti-corruption and anti-bribery matters on which reporting
and integration should be determined based on the materiality of the financial entity’s investments
and availability of data.
2.3 Planned actions to mitigate principal adverse impactRobeco takes principal adverse impacts into account in its due diligence procedures for investment
selection and ongoing monitoring. Principal adverse impact is also taken into account through
various methods such as ESG Integration, exclusions, reduction of emissions thresholds, and voting
and engagement. In addition, as an organization, Robeco has made several commitments related
to climate change and biodiversity, amongst other topics, which are relevant to mitigating potential
2. Description of principal adverse sustainability impacts
6 • Principal Adverse Impact
adverse impact as a company. These approaches are explained in the following paragraphs. Robeco
acts in accordance with applicable regulation and aims to lead in the implementation of relevant
Stewardship codes. More information can be found on our approach to the Shareholder Rights
Directive II as well as in in our Stewardship Policy. More detailed descriptions on Robeco’s strategy
to address PAI indicators will be provided by January 2022.
Methods to address principle adverse impact
Method Explanation Example More information
Exclusions
Robeco believes that some products and business
practices are detrimental to society and incompatible
with sustainable investment strategies. Therefore,
certain exclusion criteria are applied.
Applied to Exposure to controversial weapons (Table
1, indicator 14).
Robeco’s Exclusion Policy
ESG Characteristics
For its investment strategies, Robeco applies
different scores (e.g. Smart ESG or Country
Sustainability Ranking) and frameworks (e.g. SDG
Framework or Green Bonds Framework) that shall
integrate PAI indicators. More information on how
PAIs will be integrated will be provided once a data
provider has been selected.
Many strategies integrate reduction targets on GHG
emissions (Table 1, indicator 1 and 2) and aim for a
20% better than benchmark performance.
Robeco is calculating the water footprints of
portfolios vs. benchmarks, and for selected funds
applies a minimum reduction target (20% vs.
benchmark).
Robeco’s Sustainability Policy
Proxy Voting
By Proxy Voting we aim to encourage good
governance principles and address poor governance
by voting against management or filing shareholder
resolutions.
Applied to equity holdings for Board gender diversity
(Table 1, indicator 13)
Robeco Stewardship Policy
Corporate Engagement
Engagement consists of a constructive dialogue
between institutional investors and investee
companies to improve long-term value creation.
Applied to equity and credit holdings, for example in
relation to GHG emissions (Table 1, indicator 1 and
2) and remuneration (Table 3, indicator 8).
Robeco Stewardship Policy
Public Policy Engagement
Engagement with governments, government
related agencies, or regulators can add value to our
engagement program. Therefore, we take part in
consultations and provide feedback on regulations
that facilitate a better or level playing for ESG issues.
In 2020, Robeco has participated in multiple
collaborative sovereign engagement efforts to
address deforestation (Table 2, indicator 14), for
example in Brazil and Indonesia.
Robeco Stewardship Policy
Principal Adverse Impact • 7
3. Description of policies to identify and prioritize principal adverse sustainability impacts
3.1 Governance of principal adverse impact Robeco’s Sustainable Investing Center of Expertise acts as the focal point for our sustainable
investment activities and delivers expertise and insights to the investment teams, who are then
responsible for the integration of ESG into their individual investment capabilities. Day-to-day
activities are overseen by the Head of Sustainable Investing. The CIO Fixed Income and Sustainability
is ultimately responsible for sustainable investing. Internal controls and monitoring are in place as
described in (docu-robeco-sustainability-risk-policy.pdf). At this point in time, the ownership of
the Principal Adverse Impact Statement is within the Sustainability Impact and Strategy Committee
(SISC). The purpose of the Sustainability and Impact Strategy Committee (SISC) is to oversee,
coordinate and drive sustainability matters from a company-wide perspective. In some cases,
expertise may be requested from the relevant working groups, illustrated below.
Governance may evolve throughout the following months. The first update of this statement will be
made by 1 January 2022.
3.2 Identifying principle adverse impactRobeco has performed an initial data analysis and stakeholder inventarisation, and is in the process
of acquiring additional data to meet reporting obligations under the EU SFDR. Based on the initial
analysis, we have categorized data availability and quality according to the outline in Table 2.
More information on the specific indicators can be found in Appendix A. At this point in time, the
methodologies to measure principal adverse sustainability impacts are not yet finalized. Once
known, the methodologies will be added to this statement (expected in Q4 2021).
8 • Principal Adverse Impact
Table 2: Data availability and quality of principle adverse impact indicators
Data availability and quality Action Example
Low
Acquire additional data from external data providers
Increase data availability through engagement with
companies and industry stakeholders
Participation in collaborations to enhance data, for
example via the Platform for Living Wage Financials.
Medium
Data available for a number of sectors, but with
limited coverage and/or quality
Where possible: integrate in investment decision-making
Increase data availability through engagement with
companies and industry stakeholders
Participation in collaborations to enhance data, for
example via the Climate Action 100+ initiative.
High
Sound data availability and quality across majority
of sectors and sovereigns
Integrate in investment decision-making
Optional: prioritize in invest-ments and include as
binding element in investment strategy
Data in relation to breaches of the UNGP/OECD
Guidelines inform our engagement program.
3.3 Prioritizing principle adverse impact at product levelIn line with the fund classification outlined in the SFDR , Robeco will take into account PAI indicators
per strategy. It is expected that the prioritization of PAI for the different investment strategies will
be following the ESG priorities and sustainable objectives of the funds, and meet our general
expectations of companies to commit to good governance principles outlined in our Stewardship
Policy, and act in accordance with the UNGP and OECD Guidelines for Multinational Enterprises as
captured in the Exclusion Policy.
More detailed descriptions on the prioritization will be provided in the Principal Adverse Impact
Statement and product disclosures by January 2022.
Principal Adverse Impact • 9
4. Engagement policies
We believe that our engagement with investee companies on financially material sustainability
issues will have a positive impact on our investment results and on society. Robeco’s SI Center of
Expertise and investment teams work closely together in engagement. We focus on a wide range of
themes, jointly determined by the SI Center for Expertise, investment teams, and our clients.
Robeco distinguishes two types of engagement: corporate engagement and public policy
engagement.
4.1 Corporate Engagement Robeco actively uses its ownership rights to engage with companies on behalf of our clients in a
constructive manner. Robeco engages with companies worldwide, in both our equity and credit
portfolios. The outcomes of our engagement efforts are communicated to analysts, portfolio
managers, and clients, enabling them to incorporate this information into their investment
decisions as part of Robeco’s integrated Sustainable Investing framework.
Engagement consists of a constructive dialogue between institutional investors and investee
companies to discuss how they manage ESG risks and seize business opportunities associated with
sustainability challenges. Robeco carries out two different types of corporate engagement with
companies in which we invest: value engagement and enhanced engagement.
- Value engagement is a proactive approach focusing on long-term, financially material ESG
opportunities and risks that can affect companies’ valuation and ability to create value. The
primary objective is to create value for investors by improving sustainability conduct and
corporate governance.
- Enhanced engagement focuses on companies that severely and structurally breach minimum
behavioral norms in areas such as human rights, labor, environment and anti-corruption.
The primary objective of enhanced engagement is to address reported shortfalls against
internationally accepted codes of conduct for corporate governance, social responsibility,
the environment and transparency such as the UN Global Compact and OECD Guidelines for
Multinational Enterprises. In this approach, we monitor companies on several PAI indicators in
relation to human rights, labor standards, the environment and anti-corruption.
Within our engagement program, we consider the principal adverse impacts in relation to
greenhouse gas emissions, biodiversity, water and social and employee matters.
More information can be found in our Stewardship Policy and via a dedicated page on Active
Ownership.
4.2 Public policy engagementRobeco engages in public policy engagement. Engagement with governments, government related
agencies, or regulators can add value to our engagement program. Therefore, we take part in
consultations and provide feedback on regulations that facilitate a better or level playing for ESG
issues. Engagement is never intended to unduly influence the political process and Robeco only
conducts engagement on public policy where it is deemed appropriate and transparent. Most of
our engagement activities on this topic are coordinated through the various investor associations
10 • Principal Adverse Impact
and collaborative groups of which we are members (for example AGCA and Eumedion). Policy
engagements that are done via these collaborative platforms can be relevant from an equity
investor perspective, from a bondholder perspective, or from both perspectives.
Also, as part of our commitment to making financial markets more sustainable, Robeco works
together with a diverse range of institutions. Our active contribution to these important global
platforms for collaborative action on sustainability issues enables us to help shape the global
investment agenda.
More information on our commitments can be found in the overview of Sustainable Investing
Memberships, Statements, and Principles.
Within our public policy engagement, we focus on the principal adverse impacts in relation to
greenhouse gas emissions and biodiversity. More information can be found in our Stewardship
Policy, via a dedicated page on Active Ownership and in our Sustainability Report.
4.3 Proxy Voting As a shareholder Robeco is co-owner of many companies and has a right to vote on shareholder
meetings for those companies. We use our voting rights with the aim to influence a company’s
corporate governance and other relevant investment related decisions in the best interest of our
clients and society. The Robeco voting policy consists of principles, guidance, and example scenarios
to assist in determining our voting instructions. Broadly, Robeco votes against management
recommendations in case of poor corporate governance practices, when proposals are not in the
best interest of long-term shareholders and on any other proposal that is out of line with our policy
principles. By Proxy Voting policy we aim to encourage good governance principles and address
poor governance by voting against management or filing shareholder resolutions. In our policy,
we outline our principle with regards to several PAI indicators, amongst other in relation to board
diversity and separation of the Chairman/CEO roles.
With our proxy voting activities, we take into account a wide number of principal adverse impacts,
amongst others in relation to remuneration and gender pay gap. In addition, we vote for Robeco
votes for shareholder proposals which aim to increase transparency on material ESG issues, enhance
long term shareholder value creation, address material ESG risks, except when management and
the board have demonstrated appropriate efforts to mitigate such risks in a transparent way and
aim to enforce appropriate conduct, except when their implementation would additionally reward
fundamental behavioral norms. These shareholder proposals could relate to a number of principal
adverse impacts, amongst others in relation to greenhouse gas emissions.
More information can be found in our Stewardship Policy.
Principal Adverse Impact • 11
5. Reference to international standards As part of our commitment to making financial markets more sustainable, Robeco works together
with a diverse range of institutions. Our active contribution to these important global platforms
for collaborative action on sustainability issues enables us to help shape the global investment
agenda. The document Sustainable Investing Memberships, Statements, and Principles lists the
SI memberships Robeco participates in, statements we have signed, as well as principles and best
practices that we adhere to. In the next paragraphs, we highlight our approach to Human Rights,
Climate Change and Biodiversity.
5.1 Approach to human rights Part of Robeco’s corporate responsibility is its duty to respect and uphold human rights, as outlined
in the Universal Declaration of Human Rights, and to integrate human rights considerations into its
daily business operations. Robeco expects its employees, suppliers, business partners and portfolio
companies to respect Human Rights in their business activities. Any transgressions will be monitored
and discussed and may lead to enhanced engagement or exclusions. Robeco has signed the United
Nations Global Compact (UNGC) and endorses the OECD Guidelines for Multinational Enterprises
and lives by these principles and guidelines. Robeco’s human rights approach is thus aligned with
the UNGC and OECD Guidelines, as well as the United Nations Universal Declaration of Human
Rights, the International Labor Organization’s (ILO) labor standards and the United Nations Guiding
Principles for Business and Human Rights (UNGPs). Robeco’s efforts in relation to human rights,
relate directly to principal adverse impacts from Table number 1, indicator 10 and 11.
More information on our Human Rights approach can be found in the Sustainability Policy.
5.2 Approach to climate changeRobeco is committed to contribute to the goals of the Paris Agreement and to achieving net zero
carbon emissions by 2050. To this end, Robeco is developing a net zero roadmap with interim
targets for 2025 and 2030 and will publish this roadmap prior to the COP26 in November 2021. Our
interim targets will include carbon footprint reduction targets that apply to all Robeco’s funds.
The portfolio decarbonization targets will be derived from the P2 pathway from the IPCC 1.5-degree
scenario of 2018. This is an ambitious scenario that disrupts from business-as-usual but is also well
aligned with the broader societal development goals.
The P2 pathway is composed of the following emission milestones: 49% reduction of GHG emissions
in 2030 and -89% reduction of GHG emissions in 2050, both relative to 2010 baseline. Initially
confined to Robeco funds only, the scope of our decarbonization strategy will gradually increase to
include client mandates and reach 100% of AUM.
Robeco is partnering with the Inevitable Policy Response Consortium to develop high-conviction
scenarios with the intention to use the corresponding datasets for valuation research and
investment decisions.
Robeco’s efforts in relation to climate change relate directly to principal adverse impacts in relation
to greenhouse gas emissions.
More information on our Climate Change approach can be found in the Sustainability Policy.
12 • Principal Adverse Impact
5.3 Approach to Biodiversity Biodiversity loss will have a large impact on the ability of companies to produce food at the current
scale of production, due for example to soil depletion, decrease in crop diversity, and ecosystem
collapse. Robeco collaborates with different stakeholders related to this issue, such as universities,
NGOs and the DNB Working Group on Biodiversity, Platform Biodiversity Accounting Financials and
the Taskforce for Nature-related Financial Disclosure (TNFD) to gain input on how to approach this
topic from an investor perspective. In addition, Robeco is one of the 55 financial institutions from
around the globe that have signed the Finance for Biodiversity Pledge. In the Pledge the signatories
call upon world leaders to reverse nature loss this decade and commit to collaborating, engaging,
and assessing their own biodiversity impact, setting targets and reporting on biodiversity matters by
2024 at the latest.
In addition to the formation of a working group to meet those commitments, Robeco has started an
engagement program on Biodiversity, with a focus on the biodiversity impact of deforestation that is
linked to five high-risk crop commodities – cocoa, natural rubber, soy, beef, and tropical timber and
pulp.
Within our efforts to prevent biodiversity loss, we aim to mitigate principal adverse impacts in
relation to the biodiversity metrics.
More information on our approach to Biodiversity can be found in the Sustainability Policy.
Principal Adverse Impact • 13
Appendix: Principal adverse impact indicators
Adverse
Sustainability
Indicator (Group)
Adverse Sustainability
Indicator
Metric
Current data
availability
Targets and/or planned actions
Greenhouse gas
emissions
1. GHG emissions
2. Carbon footprint
3. GHG intensity of
investee companies
4. Exposure to
companies active in
the fossil fuel sector
Scope 1 GHG emissions
Scope 2 GHG emissions
Scope 3 GHG emissions (from
January 1st 2023)
Total GHG emissions
Carbon footprint
GHG intensity of investee
companies
Share of investments in
companies active in the fossil fuel
sector
High
High
Medium
Medium
High
Medium
High
In the fall of 2021, Robeco will announce its climate strategy that
include specific targets. In addition, Robeco conducts engagement
with high-emitting companies.
Current controls on GHG emissions are expressed in both GHG
intensity (indicator #3) and Carbon Footprint (indicator #2) and
applicable to a subset of funds. SI Focus quant funds aim <20%
intensity below benchmark and SI Inside quant funds aim <0% below
benchmark. Fundamental inside strategies aim for <0% footprint
below benchmark and fundamental focus strategies aim <20%
footprint below benchmark.
In addition, Robeco excludes the most impactful fossil fuel activities
based on company revenue thresholds. Companies that derive 25%
or more of their revenues from thermal coal or oil sands, or 10%
or more of their revenue from Arctic drilling are excluded from our
inside strategies. , or 10% from Arctic drilling, are excluded from
our funds. For SI Focus and Impact funds, these thresholds are 10%
(thermal coal or oil sands) and 5% (Arctic drilling) respectively.
Energy
performance
5. Share of non-
renewable energy
consumption and
production
6. Energy
consumption intensity
per high impact
climate sector
Share of non-renewable energy
consumption and non-renewable
energy production of investee
companies from non-renewable
energy sources compared to
renewable energy sources,
expressed as percentage
Energy consumption in GWh per
million EUR of revenue of investee
companies, per high impact
climate sector
Medium
Medium
Within Robeco’s engagement themes that relate to climate, energy
performance is an important element of discussion.
Within Robeco’s engagement themes that relate to climate, energy
performance is an important element of discussion.
Biodiversity
7. Activities negatively
affecting biodiversity
sensitive areas
Share of investments in investee
companies with sites/operations
located in or near to biodiversity
sensitive areas where activities
of those investee companies
negatively affect those areas
Low
Robeco is developing methods to measure the materiality of
biodiversity for our portfolios, and the impact of our portfolios on
biodiversity. Based on such measures we will set quantified targets in
order to combat biodiversity loss, latest by 2024.
In addition, Robeco has an exclusion policy in relation to Palm
oil and a company engagement program on commodity-related
deforestation
Water
8. Emissions to water
Tonnes of emissions to water
generated by investee companies
per million EUR invested,
expressed as a weighted average
Medium
Robeco is calculating the water footprints of portfolios vs.
benchmarks, and for selected funds (Sustainability Focus) applies a
minimum reduction target (20% vs. benchmark).
Our current controls are that in case our controversy assessment finds
a company with significant negative impact on local water supply or
waste issues which is a breach of UN Global Compact principle 7, we
will apply enhanced engagement that could, in case of insufficient
remediation, lead to the exclusion from our investment universe.
EU SFDR ANNEX 1 - Table 1
14 • Principal Adverse Impact
Adverse
Sustainability
Indicator (Group)
Adverse Sustainability
Indicator
Metric
Current data
availability
Targets and/or planned actions
Waste
9. Hazardous waste
ratio
Tonnes of hazardous waste
generated by investee companies
per million EUR invested,
expressed as a weighted average
Medium
Robeco is calculating the waste footprints of portfolios vs.
benchmarks, and for selected funds (Sustainability Focus) applies a
minimum reduction target (20% vs. benchmark).
Social and
employee matters
10. Violations of
UN Global Compact
principles and
Organisation
for Economic
Cooperation and
Development
(OECD) Guidelines
for Multinational
Enterprises
Share of investments in investee
companies that have been
involved in violations of the UNGC
principles or OECD Guidelines for
Multinational Enterprises
High
Robeco acts in accordance with the UNGC Principles and OECD
Guidelines for Multinational Enterprises to assess the behavior
of companies. An enhanced engagement process is applied with
companies that have severe breaches of these principles and
guidelines. If this enhanced engagement, which may last up to a
period of three years, does not lead to the desired change, Robeco
will decide to exclude a company from its investment universe.
11. Lack of processes
and compliance
mechanisms to
monitor compliance
with UN Global
Compact principles
and OECD Guidelines
for Multinational
Enterprises
Share of investments in investee
companies without policies
to monitor compliance with
the UNGC principles or OECD
Guidelines for Multinational
Enterprises or grievance /
complaints handling mechanisms
to address violations of the UNGC
principles or OECD Guidelines for
Multinational Enterprises
Medium
12. Unadjusted
gender pay gap
Average unadjusted gender pay
gap of investee companies
Low Via proxy voting, Robeco encourages good pay practices across all
pay levels.
13. Board gender
diversity
Average ratio of female to male
board members in investee
companies
Low
Via proxy voting, Robeco encourages board gender diversity.
Human rights
14. Exposure to
controversial weapons
(antipersonnel mines,
cluster munitions,
chemical weapons
and biological
weapons)
Share of investments in investee
companies involved in the
manufacture or selling of
controversial weapons
High
For all strategies Robeco deems anti-personnel mines, cluster
munitions, chemical, biological weapons, white phosphorus,
depleted uranium weapons and nuclear weapons that are tailor
made and essential to be controversial weapon. These are excluded
from all investments.
Environmental 15. GHG Intensity GHG intensity of investee countries High For climate fixed income funds data is used for the construction of
the benchmark as well as the investment strategy.
Principal Adverse Impact • 15
Adverse
Sustainability
Indicator (Group)
Adverse Sustainability
Indicator
Metric
Current data
availability
Targets and/or planned actions
Social
16. Social violations
Number of investee countries
subject to social violations
(absolute number and relative
number divided by all investee
countries), as referred to in
international treaties and
conventions, United Nations
principles and, where applicable,
national law
High
Social violations scoring data are part our Country Sustainability
Ranking (CSR) as well as the country SDG ranking which is currently
being developed. Via the CSR they are part of the country research
process and F-scores.
Social violations scoring data are part of our screening for country
exclusions.
Fossil fuels
17. Exposure to fossil
fuel through real
estate assets
Share of investments in real estate
assets involved in the extraction,
storage, transport or manufacture
of fossil fuels
NA
Robeco manages a portfolio of listed real estate assets and are not
directly involved in the day to day management of individual assets.
Robeco does manage the overall portfolio in terms of GHG reduction
(>20% lower footprint versus benchmark).
Energy efficiency
18. Exposure to
energy-inefficient real
estate assets
Share of investments in energy-
inefficient real estate assets
NA
16 • Principal Adverse Impact
Adverse
Sustainability
Indicator (Group)
Adverse Sustainability
Indicator
Metric
Current data
availability
Targets and/or planned actions
Emissions
1. Emissions of
inorganic pollutants
2. Emissions of air
pollutants
3. Emissions of ozone
depletion substances
4. Investing in
companies without
carbon emission
reduction initiatives
Tonnes of inorganic pollutants
equivalent per million EUR
invested, expressed as a weighted
average
Tonnes of air pollutants
equivalent per million EUR
invested, expressed as a weighted
average
Tonnes of ozone depletion
substances equivalent per million
EUR invested, expressed as a
weighted average
Share of investments in investee
companies without carbon
emission reduction initiatives
aimed at aligning with the Paris
Agreement
Low
Low
Low
Medium
In the fall of 2021, Robeco will announce its climate strategy that
include specific targets. In addition, Robeco conducts en-gagement
with high-emitting companies.
Energy
performance
5. Breakdown of
energy consumption
by type of non-
renewable sources of
energy
Share of energy from non-
renewable sources used by
investee companies broken down
by each non-renewable energy
source
Low
Water, waste and
material
6. Water usage and
recycling
Average amount of water
consumed and reclaimed by the
investee companies (in cubic
meter) per million EUR of revenue
of investee companies
Weighted average per-centage
of water recy-cled and reused by
inves-tee companies
Low
Low
7. Investments in
companies without
water management
policies
1. Share of investments in
investee companies with no water
management initiatives
Low
8. Exposure to areas
of high water stress
1. Share of investments in
investee companies with sites
located in areas of high water
stress
Low
9. Investments in
companies producing
chemicals
Share of investments in investee
companies the activities of which
fall under Division 20.2 of Annex I
to Regulation (EC) No 1893/2006
Low
EU SFDR ANNEX 1 - Table 2
Principal Adverse Impact • 17
Adverse
Sustainability
Indicator (Group)
Adverse Sustainability
Indicator
Metric
Current data
availability
Targets and/or planned actions
10. Land degradation,
desertification, soil
sealing
Share of investments in investee
companies the activities of
which cause land degradation,
desertification or soil sealing
Low
11. Investments in
companies without
sustainable land/
agriculture practices
Share of investments in investee
companies without sustainable
land/agriculture practices or
policies
Low
12. Investments in
companies without
sustainable oceans/
seas practices
1. Share of investments in investee
companies without sustainable
oceans/seas practices policies
Low
13. Non-recycled
waste ratio
Tonnes of non-recycled waste
generated by investee companies
per million EUR invested, expressed
as a weighted average
Low
14. Natural species
and protected areas
1.Share of investments in investee
companies whose operations
affect threatened species
Low
Robeco currently engages with companies in the engagement
themes ‘Palm oil’ and ‘Biodiversity’. In addition, Robeco has an
exclusion policy in relation to Palm oil. By 2024, Robeco will set
targets in order to combat biodiversity loss.
2.Share of investments in
investee companies without a
biodiversity protection policy
covering operational sites owned,
leased, managed in, or adjacent
to, a protected area or an area of
high biodiversity value outside
protected areas
Low
15. Deforestation
Share of investments in companies
without a policy to address
deforestation
Medium
Deforestation due to expansion of palm oil production is one of
the key drivers of biodiversity loss due to the destruction of tropical
forest habitat. By investing in companies that have not committed
to the principles & criteria of RSPO Robeco runs a significant risk to
negatively impact biodiversity. Therefore, Robeco has an exclusion
policy with regards to unsustainable production of Palm oil.
Green securities
16. Share of securities
not certified as green
16. Share of securities not certified
as green under a future EU legal
act setting up an EU Green Bond
Standard
High
Green securities
17. Share of bonds
not certified as green
under a future EU
act setting up an EU
Green Bond Standard
Share of bonds not certified as
green
High
18 • Principal Adverse Impact
Adverse
Sustainability
Indicator (Group)
Adverse Sustainability
Indicator
Metric
Current data
availability
Targets and/or planned actions
Greenhouse gas
emissions
18. GHG emissions Scope 1 GHG emissions generated
by real estate assets
Low Robeco does not invest directly in Real Estate Assets
Energy
consumption
19. Energy
consumption intensity
Energy consumption in GWh of
owned real estate assets per
square meter
Low
Waste
20. Waste production
in operations
Share of real estate assets not
equipped with facilities for
waste sorting and not covered
by a waste recovery or recycling
contract
Low
Resource
consumption
21. Raw materials
consumption for new
construction and
major renovations
Share of raw building materials
(excluding recovered, recycled
and bio sourced) compared to the
total weight of building materials
used in new construction and
major renovations
Low
Biodiversity
22. Land
artificialisation
Share of non-vegetated surface
area (surfaces that have not been
vegetated in ground, as well
as on roofs, terraces and walls)
compared to the total surface
areas of the plots of all assets
Low
Principal Adverse Impact • 19
Adverse
Sustainability
Indicator (Group)
Adverse Sustainability
Indicator
Metric
Current data
availability
Targets and/or planned actions
Social and
employee matters
1. Investment in
investee companies
without workplace
accident prevention
policies
2. Rate of accidents
3. Number of days
lost to injuries,
accidents, fatalities or
illness
4. Lack of a supplier
code of conduct
5. Lack of grievance/
complaints handling
mechanism related to
employee matters
6. Insufficient
whistleblower
protection
1. Share of investments in
investee companies without a
workplace accident prevention
policy
Rate of accidents in investee
companies expressed as a
weighted average
Number of workdays lost to
injuries, accidents, fatalities or
illness of investee companies
expressed as a weighted average
Share of investments in investee
companies without any supplier
code of conduct (against unsafe
working conditions, precarious
work, child labour and forced
labour)
Share of investments in
investee companies without any
grievance/complaints handling
mechanism related to employee
matters
1. Share of investments in entities
without policies on the protection
of whistleblowers
Low
Low
Low
Low
Low
Low
7. Incidents of
discrimination
1. Number of incidents of
discrimination reported in
investee companies expressed as
a weighted average
2. Number of incidents of
discrimination leading to
sanctions in investee companies
expressed as a weighted average
Low
Low
8. Excessive CEO pay
ratio
Average ratio within investee
companies of the annual total
compensation for the highest
compensated individual to
the median annual total
compensation for all employees
(excluding the highest-
compensated individual)
Low
Poor remuneration practices are addressed via Proxy Voting and
Engagement.
EU SFDR ANNEX 1 - Table 3
20 • Principal Adverse Impact
Adverse
Sustainability
Indicator (Group)
Adverse Sustainability
Indicator
Metric
Current data
availability
Targets and/or planned actions
Human rights 9. Lack of a human
rights policy
Share of investments in entities
without a human rights policy
Low In Q4 2021, Robeco will expand its global controversy engagement
program.
10. Lack of due
diligence
Share of investments in entities
without a due diligence process
to identify, prevent, mitigate and
address adverse human rights
impacts
Low
In Q4 2021, Robeco will start an engagement program focused on
improving human rights due diligence.
11. Lack of processes
and measures for
preventing trafficking
in human beings
1. Share of investments in
investee companies without
policies against trafficking in
human beings
Low
In Q4 2021, Robeco will expand its global controversy engagement
program.
12. Operations and
suppliers at significant
risk of incidents of
child labour
1. Share of the investments in
investee companies exposed
to operations and suppliers at
significant risk of incidents of child
labour exposed to hazardous work
in terms of geographic areas or
type of operation
Low
In Q4 2021, Robeco will expand its global controversy engagement
program.
13. Operations and
suppliers at significant
risk of incidents of
forced or compulsory
labour
1. Share of the investments in
investee companies exposed
to operations and suppliers at
significant risk of incidents of
forced or compulsory labour in
terms in terms of geographic
areas and/or the type of
operation
Low
In Q4 2021, Robeco will expand its global controversy engagement
program.
14. Number of
identified cases of
severe human rights
issues and incidents
Number and nature of cases of
severe human rights issues and
incidents connected to investee
companies on a weighted average
basis
Low
Poor performing companies under this PAI will become part of the
Enhanced Engagement program.
Anti-corruption
and anti-bribery
15. Lack of anti-
corruption and anti-
bribery policies
1. Share of investments in
entities without policies on
anti-corruption and anti-bribery
consistent with the United Nations
Convention against Corruption
Low
16. Cases of
insufficient action
taken to address
breaches of standards
of anti-corruption and
antibribery
Share of investments in investee
companies with identified
insufficiencies in actions taken to
address breaches in procedures
and standards of anticorruption
and anti-bribery
Low
Poor performing companies under this PAI will become part of the
Enhanced Engagement program.
Principal Adverse Impact • 21
Adverse
Sustainability
Indicator (Group)
Adverse Sustainability
Indicator
Metric
Current data
availability
Targets and/or planned actions
17. Number of
convictions and
amount of fines for
violation of anti-
corruption and anti-
bribery laws
Numbers of convictions and
amount of fines for violations of
anticorruption and anti-bribery
laws by investee companies
Low
Social
18. Average income
inequality score
The distribution of income and
economic inequality among
the participants in a particular
economy including a quantitative
indicator
Medium
Similar metrics are part of the Country Sustainability Ranking
(CSR) as well as the country SDG ranking which is currently being
developed. Via the CSR they are part of the country research process
and F-scores.
19. Average freedom
of expression score
Measuring the extent to which
political and civil society
organisations can operate freely
including a quantitative indicator
explained
Medium
Human rights
20. Average human
rights performance
Measure of the average human
right performance of investee
countries using a quantitative
indicator
Medium
Governance
21. Average
corruption score
Measure of the perceived level of
public sector corruption using a
quantitative indicator
Medium
22. Non-cooperative
tax jurisdictions
Investments in jurisdictions on
the EU list of noncooperative
jurisdictions for tax purposes
Medium
23. Average political
stability score
Measure of the likelihood that the
current regime will be overthrown
by the use of force using a
quantitative indicator
Medium
24. Average rule of
law score
Measure of the level of
corruption, lack of fundamental
rights, and the deficiencies in
civil and criminal justice using a
quantitative indicator
Medium
22 • Principal Adverse Impact
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Contact Robeco Institutional Asset Management B.V.
Carola van Lamoen
Head of Sustainable Investing
Weena 850
3014AD Rotterdam
The Netherlands
www.robeco.com