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Mirova

PRI reporting framework 2020

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Pre-Investment (Selection)

INF 05. Incorporating ESG issues when selecting investments

05.1. Indicate if your organisation typically incorporates ESG issues when selecting infrastructure investments.

05.2. Describe your organisation`s approach to incorporating ESG issues in infrastructure investment selection.

Considering Mirova’s positioning as a Core SRI player, we systematically analyse ESG factors for each investment project alongside conventional criteria. This analysis relies on a proprietary approach that covers the whole lifecycle of projects: development, construction, operation and maintenance, end-of-life.

The in-house RI research team thus provides investment teams with several extra-financial inputs (for further details about the ESG process, please refer to INF.01), among which an overall “Sustainability Opinion” that covers both sustainable opportunities and ESG risk review, on a 5-level scale: “Negative”, “Risk”, “Neutral”, “Positive”, “Committed”. Mirova’s funds are currently invested only in the projects assessed as “Neutral”, “Positive” or “Committed”.

The conclusions of ESG analysis are disclosed and discussed during investment committees gathering Mirova’s investment teams and the RI analysts. Extra-financial inputs therefore contribute to the final selection of projects and investment decision-making.


INF 06. ESG advice and research when selecting investments

06.1. Indicate whether your organisation typically uses ESG advice and research sourced internally and/or externally when incorporating ESG issues into the infrastructure investment selection process.

          Mirova’s in-house RI Research team
        

06.2. Additional information. [Optional]

In order to implement its investment philosophy, Mirova relies on a research team of analysts with sectorial expertise, permitting a deep understanding of the sustainability challenges inherent to each domain.

The first source of information is based on a continuous exchange with companies. Understanding the risks of each business and its operational levers is essential for finding and supporting best practices. In addition to these exchanges, the research team relies on external supports: sustainability analysis of listed companies from the rating agency Oekom, opinions of the voting agency ISS for general meetings, the carbon methodology produced by Carbone 4 (Mirova, 2015), a partnership with Cambridge University, discussions and working shops in groups of investors (AFG, FIR, etc.), and more specifically in relation with infrastructure investments, commitment to the GRESB Infrastructure (GRESB, 2015) and membership in the Global Investment Basel (GIB) board to launch the standard for sustainable and resilient infrastructure SuRe (Global Investment Basel, 2015)

Furthermore, for all the funds, the services of engineering, technical advisors (TA) and consulting firms specialized in the sectors are hired, as well as lawyers whose responsibility it is to supervise and verify the legal aspects of transactions (for instance, in the case of renewables: permits, lease, connection contracts, energy buyback contracts, and, of course, applicable regulations).  


INF 07. Examples of ESG issues in investment selection process

07.1. Indicate which E, S and/or G issues are typically considered by your organisation in the investment selection process and list up to three typical examples per issue.

ESG issues

List up to three typical examples of environmental issues

          Carbon impact of the project integrating both : - Induced emissions (tCO2eq) and avoided emissions (tCO2eq) generated by the activity of the infrastructure on a broad perimeter
        
          Biodiversity (wild life, flora), e.g. impacts or not on biodiversity, measures to reduce or compensate impacts during the construction and once project is commissioned
        
          Management of resource and pollution e.g. smart use of resource, mitigation of pollutions generated during the construction and once commissioned.
        

List up to three typical examples of social issues

          Social contribution related to the project’s purpose: access to energy, housing, health, education, information,communication and mobility.
        
          Commitment on health safety of employees, subcontractors, users during the construction and once commissioned
        
          Local project integration e.g. disturbances for local population (noise, visual pollution, stench) during the construction and once commissioned.
        

List up to three typical examples of governance issues

          Balance of the board
        
          Handling conflicts of interest
        
          Business ethics
        

07.2. Additional information. [Optional]

The philosophy of our sustainability analysis distinguishes the environmental and social contribution of the project from the practices stemming from its management. Thus, we firstly identify environmental and social opportunities to assess to what extent a project addresses sustainability issues. In a second step, we assess to what extent the companies responsible for the project mitigate environmental and social risks throughout the project’s lifecycle.

In terms of opportunities, Social criteria measure social impact; this may concern, for example, access to green energy, reduction of pollution in urban areas through the electric mobility expansion, local development with resource to SMEs or artisans, job creation over the long-term during operation phase. Regarding risk review, we assess issues such as the respect for human rights, local externalities, working conditions and health and safety practices during the construction and operation phases.Environmental opportunities can include projects allowing a significant reduction of GHG emissions or energy consumption, for example. Concerning environmental risks, all potential risks relative to a project are considered in terms of biodiversity, energy, water consumption, waste, etc. Depending on the projects, some issues can be more important than others.

Governance is embedded in the very foundation of contracts in the form of clauses covering conflicts of interest and provisions as to the tenure and composition of the board designed to protect the long-term interests of unit holders. Business ethics are also systematically reviewed to ensure responsible practices.

Documents related to both the project itself (such as environmental impact assessment) and companies involved in the project are reviewed to assess all these sustainability aspects.

For more information about how these issues are then monitored after investment, as part of our engagement approach, please refer to INF.12.

And for further details about Mirova’s RI Research methodology suited to infrastructures, please refer to INF.01.


INF 08. Types of ESG information considered in investment selection

08.1. Indicate what type of ESG information your organisation typically considers during your infrastructure investment selection process.

08.2. Additional information.


INF 09. ESG issues impact in selection process (Private)


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