He joined Mirova’s fixed income investment team in 2018, having spent the previous eight years at Ostrum Asset Management heading up a team of analysts in charge of cyclical and high yield sectors. In addition to his work with Mirova, he is a lecturer in equity valuation at SciencesPo.
It was obvious that the consequences for the environment would have no end unless we started to shift towards a low carbon economy.
How did you begin your career in sustainable investing?
I had been a credit analyst specialising in the automotive industry for something like 20 years and, as time passed, I had to spend more time analysing the consequences of stricter regulations on car emissions for light vehicle manufacturers.
Basically, at the time I started my career, for some car OEMs [original equipment manufacturer – the original producer of a vehicle's components], the more their products were emitting CO2 [carbon dioxide] and NOx [nitrogen oxide], the wider their margins were. To some extent, the more those economic players impacted the health of people, the higher their ability to post profits.
This, however, started to change in the mid-2000s and I discovered, almost naturally, how investors adopting ESG practices could tackle such issues. One of my former employers later gave me the opportunity to kick-start a process to create and implement a methodology for integrating ESG issues into credit ratings – a mission I had accomplished with the help of Agathe Foussard, who is now my co-portfolio manager on the Mirova Euro Short Term Sustainable Bond fund.
When the opportunity to join Mirova came knocking, I naturally jumped at the chance. Within the first four or five months, I was allowed to implement my ideas around how you can combine a positive ESG trajectory and a positive economic trajectory for any one given security, for example. And I now have a mission to implement ESG within the portfolio management of the Mirova fixed income funds, along with Agathe and the other PMs of the team, namely Nelson Ribeirinho, Charles Portier and Marc Briand.
Why did car emissions in particular spark your interest?
Back in 2007, I wrote a report saying that the need for designing and producing more fuel efficient vehicles would prompt M&A deals in the industry, from light vehicle manufacturers to car parts makers.
That was the catalyst for me, in terms of seeing the world entering a new period, where traditional ways of doing business without taking care of the environment would not be able to continue. It was obvious that the consequences for the environment would have no end unless we started to shift towards a low carbon economy. This is vital for preserving our prosperity – I mean, a warmer climate would simply not be business-friendly at all.
What makes Mirova different from other sustainable investors?
As a smaller investor in the fixed income space, one that has specialised in ESG investing since inception, we are respected in the green, social and sustainability bond space. So, every time an issuer comes to market and they’re looking for green investors or specialised ESG investors, we’re always one of the first to get the call.
And because we have that reputation and visibility in the market, it has made it easier for us to reach out and have open discussions with the issuers. Many of them come to us before they finalise their green bond framework. Often they simply want to talk through which aspects we, as sustainability investment managers, are looking for in a green bond issuance. They want to get ideas as to where they can improve on their existing green bond framework and governance.
The conversation starts before our fixed income team invests in the issuer. And we see them with someone from our ESG team as well as our fixed income team, which creates a healthy mix of financial and sustainability perspectives. This continues for the duration of the time we’re invested with them.
All of which means we have clear engagement with the issuer and a very open relationship with them. When they and other issuers want to put forward their sustainability projects, they look to Mirova for our specialised investment knowledge in this area.