Q&A with Jens Peers, Mirova – Serious About Sustainability
The Three Whys: Why Mirova?
Jens Peers explains how Mirova pursues its double objectives: sustainable investing with returns that outpace the broad global market.
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.
I was working for a Belgian bank, KBC, at the beginning of my career, which also had an asset management business. They hired me as a financial analyst. We were working together with an Irish team and, at the time, there were a number of common projects. Ultimately, KBC asked me to move to Dublin to further develop their thematic strategies from Dublin.
Towards the end of the 90s there was a lot of talk about technology and the ‘next generation’. In contrast, there was also growing awareness of demographic changes in the developed world and KBC had launched a fund focused on investments related to an ageing population. In addition, there were also strategies related to water and alternative energy, as well as financial themes like IPOs and buybacks.
Although the strategies proved very successful, a lot of the growth came through performance rather than inflows. I witnessed competitors emerge and raise millions and sometimes billions with a shorter or less compelling track record than ours. In the mid 2000s, I went with a business plan to my senior management at the time which effectively said "Listen guys, if you’re serious about becoming a world leader in thematic investing, we need to build a dedicated team around that”.
So we built out a thematic team which very quickly began to focus purely on the environmental side of those themes. We launched an agricultural strategy, a climate change strategy and a multi environmental strategy.
Fast forward 10 years and, one day, I received a call from Philippe Zaouati [CEO of Mirova France], who I had met on several occasions previously. He asked me whether I’d be interested in joining the new sustainability branch of Natixis, which a few months later was renamed Mirova. I accepted and moved to Paris.
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 DONG transformed itself so significantly that it is no longer active in oil or natural gas and therefore changed its name in 2017.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.
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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