Today’s world is changing, led by long term transitions: demographic, technological, environmental and related to corporate governance. In this interview, Amber Fairbanks and Manon Salomez give their view on the impact of Covid-19 on corporate governance, and share Mirova’s vision, putting the emphasis on the creation of shared value over the long term.
As Joe Biden prepared for the inauguration, he tweeted "It’s a new day in America". And what a day! Hours after taking the presidential oath, Biden announced that the United-States would rejoin the Paris Climate Agreement as promised during his electoral campaign (in essence the starting of a new climate era in the U.S. and the global race to a net zero economy).
One of the most important challenges for institutional investors is to deploy large amounts of capital and manage increasingly high liability commitments in an environment of low-yielding opportunities. At the same time, one of the biggest challenges for the world as a whole is dealing with climate change, its impacts on the economy and more broadly with what it already implies in terms of adaptation for all humanity. While seemingly disparate, these two challenges have converged to a point where they become synergetic: today, the renewable energy production infrastructure sector has reached maturity and offers investment opportunities with a good risk/return ratio, while participating in the reduction of greenhouse gas emissions. For investors, renewable energy infrastructure has thus established itself as an asset class in its own right.
Improving the transparency of financial institutions on environmental and social issues is a strongpoint of the European Commission's action plan on sustainable finance. The cornerstone of this enhanced transparency, the Sustainable Finance Disclosure Regulation (SFDR) which entered into force in March 2021 for its initial phase.
More than ever, green bonds are the focus of attention and the curiosity they are arousing is equalled by the questions they have raised. These instruments, which are geared towards "green" projects, have emerged as a market segment of their own at a time when questions about the integrity and sustainability of investments are becoming increasingly pressing.
But they will not have it.
Whether it is “grey”, “blue”, “yellow”, or “green”, hydrogen is the topic on everyone’s lips today. While it is already widely consumed in many sectors, its use as a source of energy is only in its early stages. Its applications are as numerous as they are promising, most notably in the mobility sector. For it to become the best facilitator for the transition towards a low carbon economy, many challenges still need to be met, starting with the mass production of a zero-carbon hydrogen which will require substantial investment in the coming years.