As explained in detail the LEA section and in question FI.15 of this report, Mirova regularly engages in dialogue with issuers as part of its engagement strategy, through individual and collaborative initiatives. A specific engagement strategy notably targets green bond-issuers*.
Engagement themes are selected based on both sustainability matters (significant externalities or impacts, opportunities to efficiently address E and or S issues, etc.) and financial reasons (potential materiality of ESG factors, systemic risks to global portfolios). Mirova primarily issuers that represent Mirova’s key assets under management.
Such dialogue can be held either upstream before investing, as part of the ESG due diligence, or on an ex-post basis as part of the monitoring of ESG practices and updates of analysis. Issuers are mostly targeted individually, but sometimes, the RI Research team engages in dialogue with several issuers from a same industry when a specific sectorial ESG-related issue or risk is identified (collaborative engagement).
Engagement actions are generally carried out proactively in anticipation of specific ESG risks and/or opportunities identified, but the dialogue can sometimes occur in reaction to ESG issues that have already affected the issuer.
In terms of outcomes, a report of each engagement action is logged in “OCTAVE”**, a proprietary centralized database that notably tracks the history of the engagement’s goals for each company, the progress achieved, and the resulting impact on ESG analysis. This database is available to all Mirova’s teams, including PMs. With regards to "Establishing mechanisms to rebalance portfolio holdings based on levels of interaction and outcomes of engagements", portfolio managers take this information into account.
Besides, in addition to the dialogue related to green and social bonds issuance, Mirova carries out some kind collaborative engagement towards SSA issuers, particularly governments: individual and /or collaborative dialogue is regularly held with public policy-makers to support higher standards towards sustainability, CSR and responsible investment. Mirova is a member of the Excom of the Green Bonds Principles. Mirova was also for instance particularly active in 2018/2019 within the EU Technical Expert Group (TEG) on sustainable finance to promote higher standards for sustainable financial products, including green bonds, in response to the need to finance the SDGs and the energy transition [SF1] [LC2] and prevent greenwashing. A detailed description of Mirova's approach to public policy engagement is provided in "Strategy & Governance" section, question SG.11.
We systematically engage prior to ESG-related divestment, for green bonds funds.
*Both SSA (supranational organizations and government agencies) and corporate issuers
**Online Collaborative Tool for Analysis, Voting and Engagement