Natural Capital

In recent decades, we have witnessed growing public awareness on environmental issues. The fight against climate change has become the centerpiece of public debate, corporate strategies and citizens’ concerns. However, the climate issue has often been reduced to the energy sector, with the challenge of decarbonising the production mix and promoting energy efficiency. However, climate preservation is also intrinsically linked to the preservation of nature. In recent years, a need has emerged from the heart of our concerns to preserve the “diversity of living things”, our biodiversity in conjunction with the climate. To address this double challenge, solutions were identified and concentrated in the concept of Nature-Based Solutions¹. Those are defined as actions to protect, sustainably manage and restore ecosystems, simultaneously providing human well-being and benefits for biodiversity and the climate. Such solutions include investment in reforestation, sustainable agriculture, ocean conservation, and the restoration of degraded land.

As a pioneering impact-investing company, Mirova early on identified biodiversity preservation as a central issue for sustainable development and the completion of the Sustainable Development Goals (SDGs). A game changer in terms of direct, sizable, environmental and social impact, the concept of Nature-Based Solutions also appeared to us as being a tremendous opportunity for investors. We decided to contribute our expertise and experience by designing natural capital investment strategies for institutional investors aiming at combining profitability and ecosystem conservation and regeneration.

Nature conservation and regeneration are now quickly imposing not only as the new frontier for sustainable development, but also for sustainable finance. Investors and corporates are increasingly mobilized because they understand how much our economy and development are tied to managing and regenerating natural resources. Investors have also identified the unique innovative business ecosystem and business models that are developing to offer solutions, and the opportunity they represent in terms of investing.

[1] Nature-based Solutions (NbS) are defined by IUCN as “actions to protect, sustainably manage, and restore natural or modified ecosystems,that address societal challenges effectively and adaptively, simultaneously providing human well-being and biodiversity benefits”.

Mirova and its 100% owned subsidiary Mirova UK have been designing, raising and investing strategies in the realm of natural capital investing for more than 7 years. Each of our natural capital investment strategies aims at tackling a specific issue through financing solutions and supporting the development at the level of economic ecosystems.

In addition to the five strategies described below, Mirova also displays a series of dedicated mandates for prestigious institutional investors.

Land Degradation Neutrality strategy 

Poor land management practices have led to the loss of more than 25% of the world’s arable land in the last two decades². As with the direct economic value of sustainably using land and its resources, proper management of land-based ecosystems can increase food security, decrease biodiversity loss, and help combat climate change, poverty, social instability and conflicts. The Land Degradation Neutrality (LDN) concept is included in the SDGs and other initiatives. Co-promoted by Mirova and the United Nation Convention to Combat Desertification, the LDN investment strategy brings public and private capital together to provide long-term financing to sustainable land-use projects that will reduce or reverse land degradation through sustainable agriculture, sustainable forestry and other land-use related sectors (AFOLU).

[2] According to the Intergovernmental Panel on Climate Change and the Intergovernmental Science‑Policy Platform on Biodiversity and Ecosystem Services
The Technical Assistance Facility of the LDN initiative is managed by IDH. For more information you can visit the dedicated page on their website.
For more information on the ESG policy, please see the “LDN Initiative - Summary of ESG Policy” below.
If you would like to submit a project to the LDN initiative, please see below the “LDN Initiative - Guidance for project developers”.

Climate Strategy 

Society and businesses continue to confront risks arising from climate change and resource depletion. Rising populations and consumption patterns put increased pressure on soil, water and air systems, leading to further challenges for resource and supply chain.

Launched in 2013, the Climate strategy invests in the world’s deforestation frontiers to slow down the rate of deforestation, mitigate climate change, protect biodiversity and provide rural communities with a fair and sustainable living, whilst offering investors a fair return on capital. The strategy supports sustainable innovative agroforestry in buffer zones, and the restoration and protection of biodiversity and its habitats. It also enables the use of carbon credits from the protection of standing forest to support the development of livelihoods based on sustainable land use, and protection of ecosystems and the services they provide.

Impact Report

For more information on the ESG policy, please see the “Natural Capital - ESG Policy” below.

Sustainable Ocean strategy

An unhealthy ocean puts all life on Earth at risk. Decades of mismanagement have overexploited and damaged many ocean assets, especially fisheries and coral reef ecosystems, negatively affecting small island states and underserved coastal communities. And with the continued growth in the world’s population, future protein demand will have to be met via responsible, traceable and smart climate means. To address these growing challenges, Mirova’s sustainable ocean strategy creates investor value and impact by providing growth capital to companies focused primarily on seafood conservation and the circular economy, to ultimately build resilience in coastal ecosystems, create economic growth and improve coastal livelihoods.

For more information on the ESG policy, please see the “Natural Capital - ESG Policy” below.

Creating a positive impact is central to our natural capital investing approach — every investment we make must demonstrate how it will achieve both its environmental and social objectives, as well as related financial ones.

We work with projects interactively, in order to understand the logical steps that the project takes from our investment to the positive impacts it aims to achieve. We also identify and, if possible, minimise all the risks and assumptions made by the project. A series of Key Performance Indicators (KPIs) are then identified that help track the progress of the project along its impact pathway, whereas the project determines targets and baseline values for each project.

Our more mature solution—the Althelia Climate strategy—is already delivering impact at scale (see below).