Mirova Green Bond Investing
Green conviction for your fixed income allocation
Why Mirova
At a glance
€27.2 billion*
of assets under
management
100%
of funds covered
by SFDR,
classified Article 9
12
ESG-dedicated
in-house analysts
specialised by
macro areas
7
centres of
expertise
2°C
as the targeted
global warming
scenario for all
portfolios
4 reasons to invest
The rise of the green bond market has emerged as a potentially crucial part of addressing the threat of climate change to our economic wellbeing. Having invested since 2012, Mirova was one of the first asset managers to invest in green and sustainable bonds. This has enabled the firm to introduce a unique and integrated investment process. Assets under management in the Mirova Global Green Bond strategy amount to €852 million2 and it has invested €3.4 billion3 on the green and sustainable bond market through its various strategies.
With questions raised about how ‘greenness’ is actually verified – for instance, not every green bond issuer commits to providing annual impact reporting with quantitative impact metrics – Mirova has developed a methodology for analysing and assessing green bond programmes that draws from the Green Bond Principles framework. This entails a high degree of selectivity: 60% of bonds that qualify as ‘green’ globally, don’t meet their requirements4. Yet Mirova goes further: it analyses and – in some cases – challenges the technical criteria established by the European green taxonomy, as well as those suggested by issuers themselves.
While the capital raised from any green bond must fund green and/or social projects, Mirova stipulates that the environmental and/or social impacts of the project must also be sufficiently clear and ambitious to ensure significant progress can be made towards reaching the stated objective. Close attention is given to the level of detail and transparency of the impact reporting provided for each project, which goes some way to quell investor fears of ‘greenwashing’ – the process of conveying a false impression or providing misleading information about how a company’s products are environmentally friendly.
Mirova has developed an internal tool to estimate the ‘greenium’ – that is, the ‘green premium’, or the difference between the yield of a green bond and the yield of a conventional bond from a similar issuer with similar characteristics. Some have observed that the increase in dedicated green bond mandates means a growing number of investors have become forced buyers of a concentrated number of deals, pushing the prices up regardless of the financial characteristics of the offering. But others argue that a ‘greenium’ is justified in some cases because the green label can be a proxy for good management, increased disclosure, and a robust long-term strategy at an issuer.
The Team
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Further Reading
For investors looking to have a positive environmental impact, green bonds are among some of the most transparent fixed income investments available
Is it really worth paying a premium to issuers of green bonds over conventional bonds? And which factors might catalyse this ‘greenium’ in the future?
With governments now coming aboard the energy transition train, investment opportunities abound in the shift from fossil fuels to cleaner alternatives.
Whether it’s climate change, biodiversity loss, or pollution, our oceans will play a pivotal role in tackling the most pressing planetary crises.
2 Source: Mirova, as of end of March 2022.
3 Source: Mirova https://www.im.natixis.com/images/docs/articles/HUB-Pub-Mirova-Global-Green-Bond-EN.pdf
4 Source: Mirova, Environmental Finance, Dec 2021.
*31/03/2022
The information provided reflects Mirova’s opinion as of the date of this document and is subject to change without notice.
The analyses, opinions, and certain of the investment themes and processes referenced herein represent the views of the portfolio manager(s) as of the date indicated. These, as well as the portfolio holdings and characteristics shown, are subject to change. There can be no assurance that developments will transpire as may be forecasted in this material. Although Natixis Investment Managers believes the information provided in this material to be reliable, including that from third party sources, it does not guarantee the accuracy, adequacy, or completeness of such information.
The provision of this material and/or reference to specific securities, sectors, or markets within this material does not constitute investment advice, or a recommendation or an offer to buy or to sell any security, or an offer of any regulated financial activity.
MIROVA
Portfolio management company
French Public Limited liability company
Regulated by AMF under n GP 02 014 RCS
Paris n 394 648 216 Registered Office 59 Avenue Pierre Mendes France 75013 Paris
Mirova is an affiliate of Natixis Investment Managers.