Takeaways

• Robeco has launched its first fixed income ETF, focusing on euro government bonds aligned with climate transition goals.
• The ETF uses a climate-adjusted index to favor countries with strong policies, emission targets, and green bond issuance.
• Developed with FTSE and ING, the product aims to blend traditional government bond exposure with sustainable finance innovation.

International asset manager Robeco has announced the launch of the Climate Euro Government Bond ETF, its first fixed income ETF designed to align government bond investments with climate transition goals.

The fund provides exposure to euro-denominated government bonds but goes beyond conventional benchmarks by integrating climate-focused adjustments. Its underlying index shifts country weightings based on climate scores and green bond issuance, directing capital toward nations with credible and ambitious climate policies. This includes boosting investments in green bonds that finance projects such as renewable energy, clean transport, and sustainable infrastructure.

The ETF marks a significant step for Robeco, coming after the firm’s equity ETF listings in October 2024. With this expansion, the company aims to bring a climate transition investment strategy into the government bond market.

Nick King, Head of ETF at Robeco, said the launch gives investors the opportunity to combine broad bond exposure with a climate-focused approach. “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,” he said.

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The development of the ETF involved a collaboration between Robeco, FTSE, and ING. Together, they created an in-house system to score countries based on climate-related performance. The scoring framework draws on indicators from the Assessing Sovereign Climate-Related Opportunities and Risks (ASCOR) tool, which evaluates climate targets, national policies, and evidence of emissions reduction progress.

This system also assesses legislation on carbon pricing, fossil fuel phase-outs, and alignment with global pathways to limit warming to 1.5°C. Countries demonstrating stronger policy action and progress are given greater weight in the index.

Stephanie Maier, Global Head of Sustainable at FTSE Russell, highlighted the collaboration’s significance. “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,” she said.

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The launch reflects growing investor demand for sustainable fixed income options and illustrates how innovation in index design can help shift capital toward governments leading the climate transition.

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Source: ROBECO