We try to find companies that… are among the first movers within their peer group. Then we try to identify the laggards. And finally we connect the dots. There's no magic formula to it, unfortunately.
You’re the CEO of Mirova US and living in Boston. Where did it all start for you?
What interested you in particular about Mirova?
You launched Mirova’s Global Sustainable Equity Strategy in 2013. How do you go about identifying suitable investment candidates for the strategy?
Can you provide examples of companies that have been successful at doing this in the past?
Fast forward to today and it is now the world leader in offshore wind farm development. DONG transformed itself so significantly that it is no longer active in oil or natural gas and therefore changed its name in 2017. It’s now called Ørsted after Danish physicist and chemist Hans Christian Ørsted who discovered electromagnetism in 1777.
There’s somewhat of transition taking place in the asset management industry as more and more firms explicitly adopt ESG practices and launch ESG funds. How is Mirova adapting?
I think on the one hand it's positive because it helps raise awareness for companies like ours. Even though many of these companies may have much deeper marketing pockets than we might. But just like the water strategy I was managing back in the 2000s, at the time it probably would not have grown as much as it did if it wasn't for some big competitors spending a lot of Euros bringing attention to water as an investment opportunity.
That said, there’s a big risk of ‘greenwashing’, even though I very much dislike the term. It is important to make sure that people understand what the different degrees or different approaches are to ESG so that they can compare apples to apples. And that's something I feel is still missing in the market.
Do we need to evolve our business model as a result? The way I see it, historically 5 - 10% of investors wanted to be more sustainable than the average. As the rest of the market begins to move in their direction, they may feel the need to become more extreme.
For those clients we have a range of solutions, from Amazon rainforest preservation strategies, ocean clean up strategies or land degradation strategies. And we’re continuing to develop new, innovative opportunities that push the boundaries in this area.
But we also have strategies for investors that simply want to become more sustainable and impactful in their existing equity or fixed income allocations. And we have strategies in areas that sit somewhere in between such as green bonds. So, while we don’t need to pivot our business model in the way DONG did, we’re certainly focussed on remaining a leader, not a laggard.
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