RI Europe 2015: RobecoSAM makes offer to asset owners; ‘forceful stewardship’ is described

Kicking off our on-the spot coverage of RI Europe

RobecoSAM made an interesting offer to asset owners and the concept of ‘forceful stewardship’ kicked off the RI Europe event in London today.

In his introduction to the two-day conference, RobecoSAM’s CEO Michael Baldinger made an offer to asset owners in the room to reduce environmental impact by 20% “for free – with very, very low tracking error”.

He had 10 business cards with a voucher on the reverse side. “Call me – together we can have a positive impact. This is a call to action from me to you.”

He went on: “Sustainable investing can do so much more than exclude one single stock in the investment universe.”

Then the new ‘forceful stewardship’ project was explained in greater detail. It’s the brainchild of Preventable Surprises’ Raj Thamotheram and Howard Covington, the former New Star Asset Management CEO. Covington, citing research from Dietz and Stern, spoke of the coming ‘carbon damage to dividends’ as climate change takes hold – with asset liability models potentially in trouble.“The market will completely ignore these numbers until it can’t ignore it,” he said. “Then it will suddenly wake and we’ll see values adjusted.” He went on to describe the potential obsolesence of oil and coal into “an extrapolation of how the stranding of assets will take place”.

Thamotheram said the pair had been influenced by the ‘Aiming for A’ initiative at BP, Shell and Statoil but called for a more forceful version next year. He described how they are building a coalition of investors (which he declined to name) to get companies to reveal their low carbon business plans.

Speaking to a roomful of investors, Covington said: “We will be coming to see you” to discuss a “well-considered, forceful request for a low carbon business plan. He put the ‘The Gorbachev Question’: “If you don’t, who will? If not now, then when?”