From regulatory trends to biodiversity, Guillaume Abel, deputy CEO, Mirova, discusses all things sustainable finance.
Do you observe a convergence or divergence of approaches in global sustainable finance markets?
Mirova is one of the first asset management companies in the field. Based on our extensive experience with sustainable finance, I observe that Europeans are the most sensitive to ESG (environmental, social and governance) issues and impact investing across investment levels. I also think the UK's 'smart' ESG regulations could be a benchmark for other countries. My interactions with clients and competitors reveal a change in the US sustainability finance landscape, and the 2024 United States presidential election would also impact its ESG regulations.
There is a rising demand for sustainable investment in Asia. Alongside building the impact in Europe, there is a need for enhancing impact investing opportunities in other regions like Asia, Africa and South America.
What would be a suitable correct approach to addressing greenwashing challenges?
Improving ESG research tops our agenda in the coming years. We do not want to risk investing in a company that furnishes misleading details to prove its green status. The ESG research team at Mirova builds innovative methods of detecting greenwashing by leveraging the power of data with tech tools and Artificial Intelligence (AI). Due diligence is vital to the analysis of sustainable investments, and this is one of our strategic targets for the coming years.
Mirova recently completed the raising of €1.6 billion for its fifth energy transition infrastructure equity fund. Please elaborate.
Energy transition, climate change and biodiversity are imperative to our company. We plan to focus more on stopping deforestation, saving oceans and other water bodies, reducing carbon footprint and investing in companies that are into recycling.
"Due diligence is vital to the analysis of sustainable investments, and this is one of our strategic targets for the coming years."
'Light' data could mislead a firm into making investments that do not add value from a sustainable finance perspective. Thanks to the 'rich' methodologies Mirova adopts, we can measure the impact of our investment for authentic evaluation.
What trends do you observe in the ESG and sustainable finance ecosystem?
While climate change continues to dominate the central theme, biodiversity is also emerging as a salient topic for the industry. Since Mirova has been working on biodiversity since its inception, the company is familiar with data collection challenges for measuring specific impacts of protecting our biodiversity. At a nascent stage now, biodiversity awareness will eventually capture attention at the industry level.
What kind of regulatory challenges is sustainable finance facing today?
People often get confused when deciding on fund article categories. Insufficient or inaccurate data makes precise reporting on sustainability quite a challenge. Data is expensive, and to add to the complexity, information obtained from a data provider could be starkly different from claims made by the company.
How can regulators contribute to a better future for sustainable finance?
Be it anti-greenwashing measures, the EU taxonomy or investment classifications—I appreciate actions undertaken by European regulators. While the objective is commendable, vagueness in descriptions leaves room for misinterpretation. Regulations and classification criteria should be crystal-clear to ensure uniformity in application.
Mirova recently celebrated its 10th anniversary. What is your mission ahead?
Our growth as an asset management company has been dynamic, and the focus for Philippe Zaouati, CEO, Mirova, and other executive committee members is to build a better world. The company has assets under management worth €25.5 billion today, up four times since 2017.
"Regulations and classification criteria should be crystal-clear to ensure uniformity in application."
With a range of solutions such as listed funds, private debt, private equity and carbon credits on offer, Mirova's presence spans four continents across North America, Europe, Africa and Asia. We aspire to touch the €50 billion assets mark in the next five years.
The idea is to provide clients with useful data, especially in impact investing. Mirova plans to amplify its operations in Europe while encouraging local investments in other continents with support from partner companies.
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