Jé
The water strategy
of Robeco's SAM
There will never be
a global market in water
trading rights. If there is
a market opportunity
it will be about buying
and selling entitlements
on a local basis 9
Domenic Carratu:
Daniël Wild
Daniël Wild, Senior Equity Analyst at SAM
offsets, and explains how that process could influence the trading
of water rights. 'The fact that the carbon markets only just got going
and then stalled indicates how complex these issues are. It sounds
good to suggest that we can solve global warming by launching
a global market for carbon offsets, but it is a completely different
matter creating a working market place. Water rights are even
more esoterie than carbon offsets. I do not think this will be a large
market when developed, and a bank has no natural position in that
market. The real question is a global dilemma: should you support
a erop like cotton, which requires a lot of water, in a location that is
arid or semi-arid? From a macro-perspective the answer is clearly
no. However, on local levels it can look like a different issue. For the
farmer, for the local government and for the local bank it might
seem important to support local business."
Domenic Carratu
"Sustainable Asset Management (SAM) was founded in 1995
and is fully owned by Rabobank's asset-manager subsidiary
Robeco. We realised early on that sustainability would be an
important development, offering a wide range of interesting
investment opportunities. This allowed us to develop our
research and investment vehicles ahead of the curve. Currently
we run specific theme funds which concentrate on, for example,
water, smart materials, energy, climate and healthy living.
Additionally, we run global and European core sustainability
investment products and compile the Dow Jones Sustainability
Indexes.
Our water strategy has been around since 2001 and with that
strategy we have had the same risk as the overall equity market.
At the same time, we were able to beat the market by four
percent every year, on average, which results in very favourable
risk/return characteristics.
"As well as running water funds independently, we have con-
tributed to Rabobank cliënt events on the topic of water and
agriculture. We have also shared knowledge with Rabobank
on a professional level. And we are in the process of creating a
water index for Rabobank, which will be part of the bank's effort
to diversify into sustainability themes. SAM will create five new
theme indices for Rabobank on water, energy, waste, health
and transportation.
"There is huge potential for exchanging information with
Rabobank for the benefit of F&A clients, and collaboration can
still grow. I currently see particular benefits in the combination
of know-how. We have developed a comprehensive sustain
ability assessment, which looks at a broad spectrum of risks and
opportunities. This year, the whole section on water-related
corporate risks has been rewritten. Through our assessments
we have excellent access to data from companies worldwide,
and although this information is used for our own investments
and the indices that we create, parts of the results can be used
for other purposes. We have the information on water, while
Rabobank has a strong presence in F&A. An exchange of views
and knowledge could be very beneficial for both sides."
ISSUE 24 JULY 21 I Rl WORLD
