Additional information about Mirova’s screening approaches,
suited to each category of issuers
A/ a positive screenings
- Corporate issuers and SSA (supranational organizations / agencies / local authorities):
a growing exposure to sustainable bonds, issued by corporate issuers, Supranational organizations or government agencies (a detailed explanation of how Mirova defines the eligible universe is provided in questions FI.8 to FI.10)
a selection of well-rated issuers in portfolios: For each corporate issuer, the RI research team produces a Sustainability Opinion, which assesses whether the investment is compatible with the UN Sustainable Development Goals. This Sustainability Opinion, which is obtained by merging a “Sustainability Opportunity exposure” with a “Sustainability Risk Review”, is defined on a 5-level scale: “Negative”, “Risk”, “Neutral”, “Positive” and “Committed”. Only issuers rated “Neutral”, “Positive” or “Committed” are eligible for investment at Mirova.
we prioritize Green and Social bonds compared to conventional bonds for an equivalent return
- Corporate issuers specifically:
An additional focus on sustainability-leaders and Positive Contributors. It consists in selecting primarily corporate issuers that have the ability to perform over the long term through business models that address Sustainable Development Goals. These issues are classified on 8 macro-sectors* enabling the identification of investment opportunities along the entire value chain and across all sectors of activity. The RI Research assesses the “Sustainability Opportunity exposure” of each corporate issuer, after analysing to what extent their business models fit with one or several of the above-mentioned themes.
Overall, we prioritize green bonds issuers and issuers rated as “committed” or “positive” by the ESG research team.
B/ negative screening (including norms-based screening)
- Corporate issuers and SSA (supranational organizations / agencies / local authorities)**: issuers that are badly rated for an ESG reason are excluded from Mirova's investment universes, and are therefore not allowed in portfolios (i.e. "sustainability opinions" below neutral: risk or negative). In particular, issuers exposed to severe and repeated violations of the UN Global Compact and OECD principles are badly rated and therefore excluded..
- Non-financial corporate issuers specifically: As a result of its absolute ESG analysis that differentiates between sectors in order to favour those with positive environmental and/or social externalities (and not for dogmatic reasons), Mirova does not invest in coal, in tobacco, in military industry nor in oil E&P. Controversial weapons (antipersonnel mines and cluster bombs) are also systematically excluded.
- SSA (Sovereign Issuers specifically): based on 31 ESG indicators, the RI Research team assigns to each country a Sustainable Impact Opinion on a 5-level scale: “negative”, “risk”, “neutral”, “positive” and “committed”. Countries that have a negative score on Governance Pillar automatically obtain a negative overall Sustainable Impact Opinion and are therefore excluded from the investment universe. Countries that have an Environmental or Social Pillar assessed as negative obtain a “Risk” overall opinion and are not eligible. Only sovereign issuers with a “neutral”, “positive” and “committed” overall Sustainable Impact Opinion can be held in Mirova’s portfolios.
*Energy, mobility, resources, consumption, buildings and cities, health, finance, information and communication technologies.
** Supranational organizations, government agencies and local authorities, are assessed as corporate issuers as long as they have a distinct governance from their country