Mirova has developed an innovative qualitative analysis over 5 levels
To carry out this evaluation, Mirova has developed its own methodology based on four main principles.
A risk / opportunity approach
Achieving the SDGs implies taking into account two dimensions, which can often complement each other.
Capturing opportunities: positioning on technological and societal innovation when it becomes a structuring element of the economic project enables companies to capture opportunities related to achieving the SDGs.
Managing risks: a "re-internalisation of social and environmental externalities", often in the form of management of diffuse sustainable development issues, makes it possible to limit the risks associated with achieving the SDGs.
This analytical structure, which gives equal importance to opportunities and risks, is our first prism for reading sustainable development issues.
A vision of the entire life cycle
In order to identify the issues likely to have an impact on an asset, the analysis of environmental and social issues requires consideration of the entire life cycle of products and services, from the extraction of raw materials to the end of product life. For example, if in the textile sector there is a strong focus on working conditions among suppliers, among car manufacturers, there will be more emphasis on the issue of energy consumption when using products.
Targeted and differentiated issues
Our risk and opportunity analysis seeks to focus on the issues most likely to have a concrete impact on the assets under consideration and on society as a whole. Moreover, the challenges faced by the various economic actors are very different from one sector to another and may even differ significantly within the same sector1.
Therefore, our analysis approaches focus on a limited number of issues adapted to the specificities of each asset studied.
A qualitative rating scale
The main result of these analyses is the production of an overall qualitative opinion in five levels to assess the level of asset adequacy with the achievement of the SDGs. As this rating scale is defined in relation to the achievement of sustainable development goals, it does not presuppose any particular a priori distribution of ratings, either overall or by sector. All Mirova investments are valued at least Neutral, with a desire to invest in the best valued assets being a priority. Therefore, in the energy sector, companies involved in coal and oil extraction are rated at best Risk, while companies in the renewable energy sector are generally well rated.
Mirova also develops innovative strategies
Mirova has been selected by Global Mechanism (GM) of the United Nations Convention to Combat Desertification (UNCCD) to get involved in a large-scale project aimed at tackling the major issue of Land Degradation Neutrality in a tangible way. The ‘Land Degradation Neutrality Fund’ initiative promoted by the United Nations Convention to Combat Desertification (UNCCD) and Mirova (Natixis) to support sustainable land use practices globally has been highlighted during as a concrete and innovative climate action during the Paris December 2017 One Planet Summit. Beyond its sustainability objectives, it is innovative in terms of the format of the fund, mixing public and private investors in a blended finance fund. As early supporter of the fund, all the way through the design and structuring phases, the European Investment Bank was joined by the Agence Française de Développement to become the anchor investors. Other institutional investors include Fondaction, the first north-American private investor, foundation Fondation de France, insurance companies, BNP Paribas Cardif and Garance. The initiative is also backed by de-risking partners including the Government of Luxembourg, IDB Invest and the Global Environment Facility. In total, investors have announced commitments of over USD 100 million out of a target of USD 300 million.
Climate Ambition and 2°C strategies
Mirova has also developed dedicated climate ambition investment strategies, and bespoke 2°C investment strategies for some clients on the basis of the development of a 2°C sustain index.
Green labels for funds
Mirova has 4 investment strategies labeled by the French public green "greenfin" label recognised and verified by the French State, and aimed at financing the energy transition.