International asset manager Robeco has introduced the Climate Euro Government Bond ETF, a new exchange-traded fund designed to provide investors with exposure to euro government bonds through a climate transition-focused investment strategy. This launch represents Robeco’s first foray into fixed income ETFs, following the introduction of its equity ETFs in October 2024.
The ETF’s investment strategy centres on euro-denominated government bonds, with its benchmark index adjusting country weights based on factors such as climate scores and green bond issuance. This approach aims to direct capital towards countries with ambitious and credible climate strategies while promoting investment in green bonds that finance sustainable infrastructure, including renewable energy and clean transportation.
Nick King, Head of ETF at Robeco, commented, “This innovative ETF allows investors to achieve a broad allocation to government bonds that supports climate transition whilst maintaining the risk/return profile of traditional benchmarks. With this launch, we are expanding our active ETF range into fixed income and we will be adding further products in the coming months.”
Robeco collaborated with FTSE and ING to develop a proprietary methodology for the new ETF, systematically scoring countries based on emission targets, climate policies, and evidence of decarbonisation. The methodology utilises climate indicators from the Assessing Sovereign Climate-Related Opportunities and Risks (ASCOR) tool, which evaluates countries’ climate targets, policy assessments including climate legislation, carbon pricing, and fossil fuel phase-out, alongside analysis of emissions trends and alignment with 1.5 °C pathways.
Stephanie Maier, Global Head of Sustainable at FTSE Russell, stated, “At FTSE Russell, we are proud to have played a central role in this collaboration with ING and Robeco, bringing together index innovation, sustainable finance, and investor engagement to provide a transparent, rules-based solution to support fixed income investors managing the risks and returns in the climate transition.”
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