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PRI reporting framework 2020

Export Public Responses

You are in Direct - Listed Equity Incorporation » ESG incorporation in actively managed listed equities » Implementation processes » (A) Implementation: Screening

A) 実施:スクリーニング

LEI 04. Types of screening applied

04.1. 組織内でアクティブ運用している上場株式に適用するスクリーニングの種類を記載し、説明してください。




Mirova applies an “absolute” ESG analysis. Hence, Mirova does not exclude any activity or sector as a matter of principle, but an entire industry might be rated “Risk” if the activity or the industry practices as a whole are not sufficient or if their current business model does not fit into a sustainable world. (e.g. Mirova does not invest in tobacco, in military industry, in coal nor in Oil Exploration and Production). Companies involved in antipersonnel mines and cluster bombs, as well as those based in non-eligible countries are also excluded.

Besides, in addition to the thematic selection of companies (please refer to the section “positive screening” hereafter for further details), an ESG filter is applied to ensure that all risks are reviewed, including an in depth review of severe controversies

The companies are assessed on a 5-level scale”, “Negative”, “Risk”, “Neutral”, “Positive” and “Committed”. Companies negatively assessed (i.e. below “neutral”) are excluded from Mirova’s investment universe.



Mirova’s RI equity portfolios are managed following a thematic or multi-thematic approach that consists in identifying and investing in sustainable business models, that is to say companies that:

- fit with its  sustainable investment themes* i.e. that provide solutions for the long term sustainable development of our economy. (“Sustainability Opportunities Exposure”).

- Correctly manage their impacts by re-internalizing their social and environmental externalities, thanks to good ESG practices (“Sustainability risk review”), and those that correctly take into sustainability issues at board and executive level (“Sustainability Governance opinion”).

The “Sustainability Opportunities Exposure” is merged with the “sustainability Risk Review” Opinion to form the overall “Sustainability Opinion” assessed on a 6-level scale: “Negative”, “Risk”, “Neutral”, “Positive” and “Committed”. Only issuers rated “Neutral”, “Positive” or “Committed” are eligible for investment at Mirova. When relevant, the investment team  overweighs “positive contributors, i.e. issuers rated “Committed” and “Positive”.


          The United Nations Sustainable Development Goals (SDGs), Ruggie Guiding Principles, International Climate
Summits & Agreements ( Paris Agreement), Nagoya Biodiversity Summit, etc.


As mentioned previously, Mirova’s equity investment process includes systematic review of companies’ ESG risk management. All companies rated below “neutral” in Mirova’s ESG rating scale are excluded from the eligible universe, among which companies exposed to severe and repeated violations of the UN Global Compact and OECD Guidelines for Multinational Enterprises.

Furthermore, Mirova’s RI research methodology takes into consideration the tenets of the main international guidelines and agreements related to sustainability issues. Should a severe breach of these international guidelines be identified, an alert system would be activated and the involved company could be downgraded, and therefore automatically be excluded from Mirova’s investment universe (after a check and potential engagement actions undertaken by the in-house RI research team).

04.2. スクリーニング基準が変更された場合に顧客や受益者に通知する方法について説明してください。

How the screening criteria are established and combined

Screening criteria, whether positive (thematic filter) or negative (ESG filter), are established by Mirova’s in-house RI research department. In order to further explore sustainable development issues and analyse their impacts on sectors and companies, Mirova has built up a robust in-house extra-financial research capacity. A dedicated team of 11 specialists in ESG issues, among which 7 dedicated to corporate issuers, undertakes analysis according to a proprietary methodology that is both demanding and practical.

In concrete terms, for each company, the RI research team produces a Sustainability Opinion, which assesses whether the investment is compatible with the UN Sustainable Development Goals. The team’s guiding philosophy is publicly available on Mirova’s website*. The formation of this Sustainability Opinion relies on two main assessments. 

-The Sustainability Opportunities Exposure which assesses the compatibility of the company’s business model with sustainable development themes. The level of exposure is calculated in terms of the environmental or social benefits presented by an activity in comparison to a business-as-usual scenario.
-The Sustainability Risks Review, which evaluates how a company addresses environmental and social challenges, regardless of the quality of its business model. It also includes an in-depth analysis of companies’ exposition to severe and repeated controversies (major violations of the UN Global Compact and OECD principles, controversial weapons)

The “Sustainability Opportunities Exposure” is merged with the “Sustainability Risk Review Opinion” to form the overall “Sustainability Opinion”, defined on a 6-level scale: “Worst Offender (WO)”, “Negative”, “Risk”, “Neutral”, “Positive” and “Committed”. Only issuers rated “Neutral”, “Positive” or “Committed” are eligible for investment at Mirova.

As regards the analysis, the RI research team has implemented two types of coverage regarding sustainability analysis:

Core scope, mostly made up of companies held in portfolio: good knowledge of the company (or event extensive for the main holdings), regular monitoring/updates and validation/review of ISS ESG’s analyses on a quarterly basis (ISS ESG is Mirova’s main external research partner), meetings with companies, etc.
Standard scope, i.e. all other companies: the analysis is fully delegated to ISS ESG.

How often the criteria are reviewed

There is no pre-defined frequency to review the RI criteria. The idea generation process and screening criteria, and generally speaking the entire process of extra-financial research, undergo constant improvement and refinement (strengthening sources, constant monitoring of sustainability issues, etc.), while offering continuity.

How Mirova notifies clients and/or beneficiaries when changes are made

Should a significant change of RI approach or criteria occur that might affect the investment process, the fund’s prospectus would be updated. In such a case, changes would be notified to AMF, the French securities regulator, and investors would be properly informed, i.e. by press release or by letter to the unitholders.



LEI 05. Processes to ensure screening is based on robust analysis

05.1. スクリーニングが徹底した分析に基づいていることを確実にするために、組織が使用しているプロセスを選択してください。

05.2. ESGスクリーニング戦略の一環で包括的なESG調査の対象となるアクティブ上場株式ポートフォリオの割合を示してください。

05.3. 第三者のESG評価がスクリーニング目的で更新される頻度を示してください。

05.4. 組織のESGスクリーニングを構築するための組織内リサーチを精査する頻度を示してください。

05.5. 補足情報 [任意]

For each company, Mirova’s RI research team produces a “Sustainability Opinion”, which assesses to what extent the investment is compatible with the UN Sustainable Development Goals. The formation of this “Sustainability Opinion” relies on two main assessments. 

-The “Sustainability Opportunities Exposure”, which evaluates the compatibility of the company’s business model with sustainable development themes. The level of exposure is calculated in terms of environmental or social benefits presented by an activity, in comparison to a business-as-usual scenario.
-The “Sustainability Risks Review”, which evaluates how a company addresses environmental and social challenges, as well as potential involvement in controversies, regardless of the quality of its business model. 

The research Committee and the buy list committee integrate non-RI research members and enable Mirova to challenge the ESG ratings applied to  companies. A CRD alert is transmitted to portfolio managers through the IT system to prevent any buying of an issuer rated as "risk" or "negative". 

In order to have a high level of information and a broad coverage of companies related to sustainability, Mirova relies on various providers regarding sustainability analysis, among which ISS ESG, its main ESG Research partner. ISS ESG, a sustainability rating agency with more than 50 analysts dedicated to sustainability issues, works hand in hand with Mirova to cover an extensive universe. Considering this close partnership:

-ISS ESG applies Mirova’s RI research methodolology ;
-Mirova’s RI Research team regularly challenges the robustness of the analysis carried out by ISS ESG’s analysts ;
-On Core Universe*, Mirova’s RI Research teams reviews and modifies ISS ESG’s analyses on a quarterly basis. Mirova’s RI Research teams set up meetings with companies
to reach a better understanding of their ESG practices, verify or further investigate specific aspects and make suggestions for improvement if necessary, as part of Mirova’s engagement approach. Companies are therefore sometimes given the opportunity to review ESG research on them and to correct potential inaccuracies during the dialogue undertaken.

As regards how often the ESG analyses are updated, for its Core Universe* the RI Research team follows the newsflow on issuers (on a real time basis for top holdings) so as to ensure that the Sustainability Opinion continually corresponds to companies’ the actual practices. The RI Research team carries out three main actions:

- A daily review of news feeds and a comment on each relevant news item every week.

- A quarterly review of ISS ESG’s updates (ISS ESG is Mirova’s main external research partner)

- A review after each company meeting.

For the Standard scope**,  ISS ESG’s analyses are annually updated and controversies and other important information (mergers etc.) are integrated in ISS ESG’s own tools as soon as their rating update is finalised. Each quarter, newly updated information is integrated in the data delivered to Mirova.

A periodic review of the quality of the research is also carried out by third parties:

- EY has conducted an audit on the robustness of Mirova’s ESG research processes in June 2014 (with a review in 2015)
- In the framework of the SRI label, that has been awarded to 21 Mirova’s funds, and of the and TEEC/ green label, awarded to 3 strategies and 5 funds,  the investment process that includes Mirova’s ESG research have been audited by external certificators (EY ).
- Very regular audits are carried out by the General Inspection Department of BPCE Group on investment processes.  

- An audit was carried out by the French Market Authority on our SRI processes in 2018. 

* mostly made up of companies held in portfolio

** All other companies


LEI 06. Processes to ensure fund criteria are not breached

06.1. ファンドの基準に違反がないことを確認するために組織が使用しているプロセスを記載してください。

06.2. ファンドのスクリーニング基準に対する違反が判明した場合、これらの違反を是正するために従うプロセスを説明してください。

Mirova is a Core RI player. As a consequence, ESG criteria are at the heart of its investment processes. The ESG guidelines are formalized and their application is strictly monitored.


To ensure the follow-up of Environmental, Social and Governance criteria in Mirova’s RI strategies, two levels of monitoring are in place:

-At the level of the RI Research team: the analysts responsible for assessing companies monitor news and alarms so as to continually ensure the consistency of their ratings with companies’ actual practices (the monitoring of companies and updates of sustainability opinions are previously explained in question LEI.05)
-At the level of the Risks Constraints and Operations teams: they monitor not only the regulatory and financial constraints of portfolios, but also their minimum level of ESG quality. Among their tools, therefore, these teams have access to the ESG ratings of each company and ensure that none rated below “neutral” is present in the portfolio continuously.

Mirova also holds regularly a dedicated Risks management Committee. 

 In addition, Mirova draws on Natixis IM’s (its parent-company) strong risk management organisation to ensure that fund screening criteria are not breached, among which ESG constraints. To this end, the process described below is strictly applied.

Considerable attention is paid to monitor compliance with established guidelines. Given the in-depth risk monitoring and the ability to pre-test trades both for consistency with the model portfolio and for guideline compliance, the potential for breaches based on portfolio management activity should be low. Further, in case a breach actually occurred (for example, due to market action), it can be quickly discovered and resolved given the systems that actively monitor guideline compliance. 

Guardian, dedicated software 

Guardian leads both pre-trade and post-trade controls and provides a daily automated audit trail. All portfolio constraints are input into the Guardian dedicated software by the Risk Constraints and Operations Team (RCO) of the Legal, Monitoring (Compliance and Internal Control) and Risk Department of Ostrum AM (another affiliate of NIM). Guardian (Compliance module of CRD) is linked to the Charles River Development order management system and to the Apollo central record keeping system for portfolio positions, which is updated daily.

The RCO Team develops and maintains pre-trade controls for the use of portfolio managers before submitting trades. These controls are performed in real time, before a broker or counterparty has been contacted by a dealer. These pre-trade controls concern mainly eligibility and investment constraint calculations, and are intended to prevent breaches. Pre-trade compliance strengthens the asset management process by reducing risk of late corrections and end-of-day non-compliance.

In addition the RCO Team uses Guardian to perform post-trade controls. Any breaches are reviewed daily and brought to the portfolio manager for resolution. There is a formal escalation procedure if the breach is not resolved in less than 2 days. Reports on breaches are sent twice each month to the heads of investment departments and the heads of Legal, Monitoring (Compliance and Internal Control) and Risk Department.



06.3. 補足情報 [任意]

Control mechanisms operate at three distinct levels.


-First level: controls at front office level – portfolio managers

Operational business lines are responsible for these front-level controls through self-regulation and the policies stipulated in the written procedures. Risk management is part of the portfolio managers’ investment process. They use an in-house developed tool for pre-trade simulations and controls. These ex-ante controls include regulatory, contractual and internal constraints that portfolio managers take into account while constructing and managing a portfolio. The Middle Officers are in charge of the first analysis. Through standardized consistency checks, Middle Officers make sure the breach is valid and raise it, through Guardian, to the portfolio manager for action


-Second level: controls at risk management team level

The second level of controls is led by the RCO Team, who monitors constraints linked to portfolios’ financial management (intelligence and validation, exhaustiveness, effective control, adjustment procedure, audit trails, reporting). Controls cover either the prospectus specifications when relevant for funds, or contractual constraints for mandates including specific investment guidelines, as well as regulatory requirements. It finally implements ex-ante constraint controls on portfolios.

The initial analysis is handled by the middle office. Through standardized consistency checks, this department checks that the breach is valid and raises it, through Guardian, to the portfolio manager for action. If after two alerts, action is not taken, risk managers take over from the middle office until the exception is corrected.


-Third level of control, called regular controls

Specific audits can be conducted by Natixis IM, and the quality and relevance of Mirova’s internal control mechanism is reviewed 3 times a year by the Risk and Compliance Committee.