Asset manager Robeco says it has launched the first active equity fund focused on engagement with the fashion industry that is plagued by issues, such as the low level of recycling and poor pay for workers.
The Fashion Engagement Equities Strategy, designated as Article 8 under the EU sustainable investment rules, looks for long-term returns from the fashion industry, which generates US$ 2.5 trillion annual sales but pays its employees 45% less local living wages, according to the firm, quoting industry research.
Every year about 100 billion articles of clothing are produced of which less than 1%4 is recycled into new clothing, and the industry is responsible for up to 10% of global greenhouse gas emissions, the firm said, quoting the Ellen McArthur Foundation.
The fund will invest in and engage with 30 to 40 publicly listed companies across the fashion value chain, from sourcing, to production, consumption and end-of-life.
Companies exposed to “casualisation, premiumisation, circularity and automation megatrends” are considered in the stock-selection process.
Dora Buckulčíková, portfolio manager at Robeco, said: “There is increasing demand for the fashion industry to transform. Companies with leading sustainability characteristics are likely to do better than laggards in the long run. It is our responsibility as long-term shareholders to encourage transparency and sustainable business practices at the individual company level.
“We believe this strategy positions investors to benefit from and contribute to the fashion industry’s sustainable transition.”
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