RobecoSAM Launches Circular Economy Strategy
The investment specialist RobecoSAM, focused exclusively on Sustainable Investment, announced the launch of the RobecoSAM Circular Economy Equities strategy last January. The strategy is now also available on the Italian market. The goal is to achieve long-term capital growth by investing in companies that work on circular economy and to uncover attractive investment opportunities and implement them in concentrated, conviction-based equity portfolios.
Revolutionizing the global economy
The traditional linear economy based on the take-make-dispose consumption model is not sustainable anymore. A growing global middle class is putting pressure on our planet’s limited resources and endangering the environment.
Currently the linear economy consumes 1.75 times the annual regenerative capacity of the planet. In response, the circular economy is rapidly taking hold.
The Circular Economy model is disrupting traditional patterns of production and consumption. A growing number of countries and companies are facing the inefficiencies in linear production and waste and are instituting recycling policies.
The circular economy creates value in a continuous cycle
With such important changes, interesting investment opportunities are opening up. The transition to a circular economy will reach USD 4.5 trillion by 2030. The RobecoSAM Circular Economy Equities strategy offers investors a unique opportunity to take part in a largely untapped growth story.
The RobecoSAM Circular Economy Equities strategy aims to identify and invest in leading companies that create value in a continuous cycle. In particular, the strategy invests in companies operating in the following investment clusters:
- Input redesign (consumer packaging, renewable raw materials and fibres, building materials, precision agriculture)
- Circular practices (nutrition, fashion and leisure, home and lifestyle, sharing economy)
- Enabling technologies (product as service, logistics and control)
- Cycle resources (Extending the product lifecycle, collecting and disposing, recovering and recycling)
Investment approach
The portfolio construction is mainly based on bottom-up stock selection and takes into account the attractiveness of sub-clusters. The financially relevant ESG (Environmental, Social, Governance) aspects are integrated into the company’s valuation analysis. The strategy also has a positive impact on the Sustainable Development Goals (SDGs) as it targets the recyclability of packaging products or solutions, waste prevention in production, sustainable supply, food waste reduction, landfills and greenhouse gas emissions (CO2 emissions). Active ownership is an essential part of the investment process.
