In the field of responsible investment, Mirova is a pure player, fully dedicated to invest in sustainability. Given this positioning, ESG matters are deeply embedded in all its strategies and processes. Its RI policy therefore:
- relies on the most advanced standards in the industry,
- has been defined according to the main ESG-related international norms mentioned in SG.01.4.
- includes all the RI components mentioned in SG.01.1
- covers all its assets under management.
Mirova’s investment philosophy is described on its website and is summarized in a public document entitled “Acting as a responsible investor” (the URL is provided in SG.02). This document describes not only Mirova’s convictions and overall approach, but also how this is implemented concretely in the various asset classes.
Mirova was created on the basis of strong conviction. Acting as a “responsible investor” requires interpreting the economic world within its social and environmental context. This analysis cannot be limited to a study of the short/medium-term profitability for each asset individually, but rather requires an understanding of interactions between the various public and private players, small/medium/large-sized companies, and developed and developing economies in order to ensure that growth of each player is compatible with the balance of the rest of the system. It is a long-term approach that guarantees that today’s choices will not have negative consequences for future generations.
Understanding these complex relationships requires:
- a clear interpretation of the major transitions our societies are undergoing such as demographics, technology, environment, and governance
- an attempt to anticipate the consequences of these transitions as part of our investment strategies.
As with all changes, these transitions are sources of both risks and opportunities. To this end, in September 2015 all world nations adopted a new sustainable development program proposed by the United Nations. It sets 17 Sustainable Development Goals (SDGs) for 2030, broken down into 169 specific objectives designed to confront the major social and environmental problems the world is facing. The SDGs can be read as a road map for responding to these major transitions.
In this context, innovation and sustainability are becoming the main levers for economic, environmental and social value creation. The companies that will be able to provide sustainable and or innovative solutions, while appropriately managing their ESG, will benefit from a real competitive advantage. Our investment approach is primarily based on that conviction and combines the sustainability and financial dimensions of investing with the objective to allocate financial capital with a net positive impact on society and benefit from returns of companies that should deliver better than average performance.
All Mirova investments, be they stocks or bonds, listed or unlisted, companies or projects, share the same approach: reconcile creation of economic, environmental, and social value. Applying these principles requires an approach tailored to each asset class.
All Mirova’s investment processes rely on the expertise of its in-house RI analysts, who perform state-of-the-art RI research to:
- deepen understanding of ESG-related long-term issues: fighting climate change, pollution control, preservation of resources, protecting biodiversity, fundamental freedoms, right to health, right to development and responsible governance, business ethics etc
- transpose them into sustainable investment for each macro-sector: energy, mobility, resources, consumption, buildings and cities, health, finance, information and communication technologies, etc.
These ESG and sector-specific guidelines take the form of synthetic factsheets for each sector, that analyses the stakes on the UN SDGs that should be taken into account (URLs are provided in SG.02).
On this basis, the RI Research team is in charge of assessing issuers and projects through an opportunities / risks analysis, that ends up in a rating that defines the composition of Mirova’s investment universe (ESG practices and business models of corporate issuers, ESG assessment of green bonds following a proprietary methodology, ESG profile of sovereign issuers, etc.).
Mirova is however capable of developing specific approaches for its clients. It develops bespoke strategies for specific sustainability objectives: for example, several of its funds are labelised by the French public green label to finance the energy transition ( the Greenfin label, formerly named "TEEC" label), it has developed a dedicated strategy for employment in France, and low-carbon benchmarks and investment strategies for some of its clients. Mirova has also developed specific climate approaches for some of its clients with low-carbon or 2°C aligned products.
Mirova does not exclude any industry on principle. Within certain industries, however, case-by-case analysis may result in a “Risk” or “Negative” rating for all the companies of that sector when practices do not provide an adequate level of assurance that the risks associated with the product are properly managed. “Risk” and “Negative” ratings mean that the issuer cannot be included in Mirova’s portfolios. The rating can nevertheless evolve following the evolution of the company. Current exclusions therefore include: tobacco, the military industry, coal or oil exploration and production, gambling, adult entertainment, sugar sweetened beverages, companies registered incorporated or head-quartered in a tax haven, companies demonstrating serious breach of UN Global Compact’s principles and/or OECD guidelines for international companies.
Mirova has also developed an advanced proxy voting and engagement approach, with a view to encouraging them to improve their practices.
The URLs of all documents mentioned above are provided in SG.02.