Karin van Baardwijk (Robeco): ‘What Matters Is The Change I Bring’
After 17 years at Robeco, Karin van Baardwijk, CEO since 2021, is well versed in investing. But she sees her mission primarily in what she calls ‘being effective.’ Continuously and incrementally improving the company. And when possible, society as well. For example, by conceiving better sustainable investment solutions, or by getting people from different generations and backgrounds to work together in teams. These incremental changes suit Robeco, which currently manages 176 billion. Robeco has a long history: the Rotterdamsch Beleggings Consortium which was founded in 1929 by seven Rotterdam harbor barons, is now 94 years old. Started as an asset manager for private investors, Robeco now mainly serves Dutch and international institutional clients. For a long time, the asset manager was part of Rabobank, until its sale in 2013 to the Japanese investment company ORIX.
Van Baardwijk knows the company inside out. She joined 17 years ago as risk and internal control manager and worked as COO and substitute CEO until her appointment as CEO. Before that, she was head of global information services and head of operational risk management, among other positions. She herself acknowledges it as a non-traditional career path. ‘At Robeco, people were used to the person at the helm being the specialist. But I am not. My foremost question when taking on a new role is always: what is the issue, am I the right person to solve it? What would success look like? From that insight, I, together with the stakeholders, determine what needs to be done to achieve it.’
After various other roles in the organization, you have now been CEO for a year and a half. How do you like that?
‘I am immensely proud to have been given the opportunity to grow in this company, which has had my heart for 17 years. It is a jacket that fits me well. I enjoy having the final responsibility. To be able to take the decisions myself, together with an incredibly good team.’
That ultimate responsibility emphatically distinguishes the CEO from all other management roles in an organization. How do you experience that?
‘It is not always easy. That is not in the complexity of the issues. I have been on the Board of Directors and the EXCO for many years and in recent years have supported our former CEO Gilbert van Hassel. So, the CEO’s agenda and associated dilemmas were not new. One difference is that as CEO I cannot always share everything. Also, so as not to burden the people around me. It takes some time to get used to that, because transparency is one of the focal points of my leadership style. But by now I manage it well. Whether it is lonely? No, because I have worked here for so long, I have a large formal and informal network which I often use.’
You said in a previous interview that effectiveness is an important condition for taking on a new role. For example, to become chief information officer at Robeco without an IT background. What do you need to be effective?
‘When I was asked to take on the role of CIO, the lack of a background in technology did not prove to be a problem. The change which I could bring was important. I suddenly had the responsibility of over 100 people and a large budget. I took the time to fully understand what was needed in terms of technology in the organization: for the Board of Directors, but also all the other stakeholders, the employees and investors who are all very dependent on technology.
It quickly became clear to me that we had to move from traditional planning and budgeting to a more agile, project-driven way of working. The way of communicating about tech also had to change. Tech is at the heart of what we do here, and we could do so with a bit more elan and pride. Maybe it also has to do with the fact that I am wired differently from many others within Robeco. I did not graduate cum laude in mathematics, physics, or econometrics. I think intrinsically different. And I think I look at issues with an open mind: where can we strengthen each other and where not. I find that a factor which expedites gaining new insights and creating solutions.’
Because of your role as COO, you were integrally involved in the company’s strategy. Did you adjust the strategy with your start as CEO?
‘As COO, I was already able to incorporate much of my own vision into the current strategy. Momentous changes are not necessary, not revolution but evolution. We are an active asset manager, therein lies our strength. The countries in which we do business and the products may change but the focus remains on sustainable investing, fixed income, quantitative investing, thematic investing - investing in themes that contribute to improving sustainability - and emerging markets.’
Robeco was one of the first Dutch asset managers to engage in sustainable investing in the 1990s. Sustainability is something that concerns many CEOs. How did you approach it?
‘We have been working on sustainability for a long time and have gone through various stages of development. We are now benefiting from that accumulated knowledge. Especially now that laws and regulations are increasing. Take the introduction of the sustainable finance disclosure regulation (SFDR). Complying with this requires major investments in time and money, but I see the wheat separating from the chaff eventually. This makes this regulation more of a blessing than a burden. Parties who, like us, have been working on sustainability for years know how important it is that sustainability is embedded in all your products and processes.’
Because of that view, greenwashing, when companies pretend to be more sustainable than they are, is probably a thorn in your side.
‘Parties that approach sustainability solely as a marketing topic lack the experience and historical sustainability data. You do not do sustainability ‘overnight.’ As we have been working on sustainability for several years, we can distinguish ourselves well; it is fully embedded in our investment processes. You also must have the right expertise in-house to be able to follow and interpret developments. Consider for example determining whether a company you want to invest in is sustainable, it is complicated and subject to change.’
Can you give an example of this?
‘For a long time, the sustainability of companies was measured using ESG indicators, including at Robeco. The question now is how much ESG criteria about the environment, society and good governance say about a company’s sustainability. The criteria mainly show how those indicators impact the company’s profitability, but that says very little about actual sustainability of the company and the impact of its activities on society. If you are not careful, you are comparing apples with oranges. Especially since there is no sustainability standard in the financial sector yet. Not for nothing did The Economist magazine recently headline an article: ‘ESG: three letters that won’t save the planet.’
What yardstick would you then choose to map the sustainability of investments?
‘Since 2017, we have been working with the sustainable development goals. Where the ESG factors focus on profitability, sustainable development goals allow you to link the company to society and nature. This creates a framework that allows us to much better demonstrate how sustainable a company is. It also provides a basis for talking to clients about their definition of sustainability, which remains a catch-all term. We ask about concrete objectives and ambitions. You can tailor the investment solution to that, for example by excluding certain sectors or focusing on a specific subject such as climate change.’
Is the need for a better sustainable standard also the reason for starting the sustainable investing open access initiative? Through that platform, Robeco shares sustainable data with the outside world.
‘Yes indeed. We make scores that we assign to companies to indicate their impact on sustainable development goals available free of charge to some clients and academics. We do this to promote the quality of SRI (socially responsible investing) and to contribute to the sustainable standard for the market. This is an immense amount of valuable information, we should not keep it to ourselves. We are hugely interested in feedback from clients and academics: How they use the data, what they notice, what could be done better. That completes the circle: you share the data, get feedback, and that in turn improves your data.’
When, as an organization, you allow yourself to judge other companies, you must invest in sustainability yourself?
‘Certainly, sustainability is not just a product solution, it is also our identity. After all, what you propagate, you must show yourself. We have mapped the sustainability of our entire value chain, from catering to our IT suppliers. To make all those parts more sustainable, we also developed a net zero roadmap for ourselves.’
The human factor is also not to be underestimated. How do you get people on board with sustainability?
‘It is always a combination of knowledge and intrinsic conviction. For example, our investment specialists know that they do not have to choose between return or sustainability. It goes hand in hand. We encourage acquiring knowledge, also about sustainability. Our investors work together with sustainability specialists in various fields. Think of climate strategists and people with a chemical background and specialists who are deeply knowledgeable about water, energy production or biodiversity. When the knowledge of our investors comes together with that of our sustainability specialists, you can feel the energy and innovation in the room. It helps that research is in the DNA of every Robeco employee. People here are used to challenging each other. Our payoff is the investment engineers; our people are incredibly proud of them.’
It is difficult for any company to retain talent right now. How do you deal with this?
I am glad you mentioned ‘retain.’ For Robeco, bringing in talent is not a problem. People like working here because of our purpose; you can achieve not only financial, but also sustainable objectives for your client. That does bring with it a responsibility, though: we must keep the organization’s knowledge level high. Otherwise, people will leave. Our people like to cooperate with other smart people with ideas. Our workforce has a high density of physicists, mathematicians, and econometricians from all parts of the world. The atmosphere of conceiving innovative solutions together is in the culture. I heard the other day that the average number of days people are in the office in the banking industry is 1.8 days. With us it is almost 3 days. That says something.’
The arrival of the younger generation, Generation Z, does present a challenge for many organizations. Their interpretation of work does not always match that of the other generations in the company.
‘The question of how to merge a new generation entering the labor market with the incumbent population in the organization is extremely relevant. For new generations, ownership is much less important, for example. When I started as a trainee years ago, I was very proud of my laptop and lease car. Young people now mainly want a steep learning curve and lots of experience, preferably internationally. What matters is that you do not just select the best brains, but also choose people who are the lubricant in the organization. People who know how to get the best from the diverse talent. We are achieving success with that in different departments. We recently made a twenty-something team leader of a team with people who have worked here for much longer. Her arrival provides new impetus. Change needs guidance: if you can offer that, people are willing to embrace it.’
Back to your own experience. What character trait was most valuable to you in your career? And what development you went through did you have to pay very conscious attention to?
‘I continue to develop myself along the lines of what I think the company needs. For about ten years I have been doing that with a coach, a different one every two years. There are always different issues that I discuss. About getting people moving, or how to get the best out of my EXCO team, or the topic of authentic leadership. I think it is important to always keep learning.
The trait that was enormously valuable to me is not wanting to give up. You can give up only once, then it is over. I have a lot of energy and always see new possibilities or a different perspective. I often come to a different approach to a solution during a walk.’
Interview by Susanne Guntermann, partner at Valcon. Published in Management Scope 08 2023.
This article was last changed on 04-10-2023