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).  

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.