Finance clearly has a big role to play, because it has the capacity to direct capital in a more sustainable way.”
When did you start your career in sustainable investment?
I joined Ostrum Asset Management [formerly Ixis Asset Management] around twenty years ago. I started working on sustainable investment when I was head of quantitative research. In those early days, we asked ourselves very specific questions about the impact on a portfolio's performance of restricting the investment universe or adding SRI [socially responsible investment] guidelines. And interestingly, we are still having similar debates as to whether ESG generates performance or not. In my opinion, there is no unilateral answer: it depends on the investment horizon and the themes. Unfortunately, not all negative externalities [negative side-effects and unintended consequences] are reflected in short-term financial performance.
Then, when I became deputy head of fixed income management at Ostrum AM, I was also in charge of validating management processes and integrating ESG criteria into them. We worked closely and transparently with our clients – which is absolutely crucial in my view – to assess the impact on performance of adding ESG constraints. I coordinated these aspects before a dedicated Research and SRI department was created at the end of 2020. This department includes quantitative research, credit research and ESG strategy.
How does sustainability continue to motivate you?
It motivates me because the road ahead, not just for the industry but for the world as a whole, is still very long, complicated and demanding. Awareness of the importance of sustainability in our investments still needs to grow. Not everyone is yet aware of the consequences. This applies not only to the climate but also to biodiversity, a subject that both fascinates and worries me.
Admittedly, some progress has been made, but there’s a long way to go. We really need to educate and involve all the stakeholders, including governments, businesses and consumers.
And finance clearly has a big role to play, because it has the capacity to direct capital in a more sustainable way. We have regular discussions with our institutional clients, particularly insurers, who are extremely committed to sustainable investing and share this conviction. So there’s plenty to do and a real sense of momentum in this space.
Finally, I think this area really complements my scientific background. As the former head of quantitative research at Ostrum AM, science is one of the prisms through which I approach issues. I love looking in detail at what scientists are telling us about the impact of a particular activity on the environment, the climate or biodiversity. Quite apart from the fact that it is intellectually fascinating, I believe that it is essential to look precisely and not roughly at the issues at stake.
What makes Ostrum AM different from other sustainable investment companies?
I would say that it’s the rigor and transparency in our approach that defines us at Ostrum AM. There's a real alignment between what we say and what we do. Moreover, Ostrum AM's senior management ensures alignment between corporate social responsibility and portfolio management.
In addition, we support our large institutional clients in defining and implementing their ESG strategy or impact measurement. For example, we work closely with our clients who are members of the Net Zero Asset Owner Alliance to ensure that their commitments are reflected in their portfolios and to simulate impacts.
As a committed investor, we speak on our own behalf, of course, through our engagement and dialogue actions, but we also offer to speak on behalf of clients who wish to do so. This alignment of interests amplifies the weight of the assets represented and our overall impact when we talk to the companies in our portfolios.