First Video

The concept of impact investing is increasingly prevalent in the financial industry. At Mirova, certainly, impact serves as a core structural feature of our corporate purpose. Yet there is, to date, no clear consensus on what this notion comprises, nor on the financial sector’s exact relationship to reorienting our economies towards sustainable development.


The content provided herein reflects the views & opinions of MIROVA at the date of this document’s publication and is subject to change without notice.

Mirova was created in 2014
with the ambition of proving the relevance
of a new investment model placing
sustainable development issues
at the heart of investment decisions.

Since then, many investors have,
to varying degrees, taken steps to integrate
social and environmental criteria.

Amidst this vast —but unfortunately hazy— movement,
it seems to us important that we clearly articulate
what makes our approach unique.


Septembre 2015, PARIS, COP21


Impact investing: investments made in companies or organisations with the intention of contributing to a measurable positive social or environmental impact, and generating financial returns.

per the International Finance Corporation - 2019 quote

Impact investing: a transverse approach that calls for explicit definition

The term impact investing is relatively new to the vocabulary of finance. Initially applied specifically to describe unlisted equities, it identifies investments that seek to achieve impact without compromising financial return.

Because impact investing is a way of looking at investment, rather than an asset class per se, we feel this approach may legitimately be applied in all asset classes: listed equities, bonds, infrastructure, real estate, etc.

Nevertheless, any expanded view of the concept is open to interpretation, with the attendant risk of a mismatch between investors' expectations of anticipated impact and the reality of such impact, a situation described as « impact-washing ». Because of this, we believe it necessary to specify precisely what makes an impact investing approach unique, and what distinguishes a sincere and effective impact approach.


If you undertake an initiative that is very important for climate, but represents 1% of your assets while you spend 99% of your time talking about it, that’s impact washing.

Philippe Zaouati - 12 septembre 2019 quote

Mirova: are we an impact investor?

Mirova was created with the goal of offering investors strategies for reconciling the creation of financial returns while also having a positive impact on society. Our positioning is precisely in line with the impact investment approach, which we apply across all our asset classes. Furthermore, as the concept of impact investing has become more familiar and widely used, we felt it was necessary to reflect on the definition and nature of our impacts.

Regarding the achievement of financial performance for our investors, we believe the matter is easily quantified by the performance achieved by the funds and the associated returns. The issue of positive contributions to environmental and social objectives, however, is much more complex and raises genuine questions. Do the companies and projects in which we invest actually contribute to the transition towards a more sustainable economy? Do our choices as investors have an impact on our assets? What influence do we have over issuers? How do we assess such impact?

While it is difficult to give firm answers to all these questions, we feel it is our duty to contribute to framing these debates and providing the foundations of answers for our clients, peers and regulators, who increasingly attach importance to sustainable development issues.







Making the search for impact an objective

More and more investors are now turning to socially responsible investing (“SRI”) and integrating ESG criteria into their investment processes. However, all too often, analysis of extra-financial elements remains limited to improving the financial performance of a portfolio, usually over a limited time horizon. The same applies to so-called ‘thematic’ funds, which seek to capture yield opportunities linked to the growth prospects of environmentally positive activities.

From a financial point of view, these approaches certainly appear relevant. But, applied stricto sensu, they do not explicitly seek to transform the economy. In the absence of intentionality, we see the terms ‘impact investment’ or even ‘responsible’ or ‘socially responsible investor’ as inappropriate for characterising this type of approach.


Being a pioneer is not an end in itself, and staying at the forefront is different challenge.

Fabien Leonhardt, Equity Portfolio Manager and Head of the Social Impact Investing Expertise quote

For an investor, clearly stating that their objective is not solely financial may come with real consequences. It could mean that said investor will be obliged to take ESG criteria into account, even when this does not create financial value added. A prime example is the topic of biodiversity loss. Because it is not easily measurable, the destruction of biodiversity has only a limited visible impact on companies' balance sheets, and investors can accordingly remain diffident in approaching it.

However, the topic is crucial to maintaining the balance of our economies, and is a keystone of sustainable development issues. An investor committed to an impact approach will seek not only to avoid risks, but also to direct its investments towards the preservation of biodiversity. This is especially true of us, since Mirova has put biodiversity on its agenda, and seeks at once to invest directly in projects to restore natural capital and to find a way of calculating the biodiversity footprint of its investments and listed portfolios.


First of all, we want to enable private capital, whether savings or institutional investments, to be directed towards infrastructure projects with a tangible and intrinsic impact (renewable energy production, storage, decarbonised mobility, etc.). This calls for the creation of investment products that can offer the level of returns our investors expect while maintaining level of risk they consider acceptable.

Witold Marais, Investment Manager, Energy Transition Infrastructure quote

Although Mirova's positioning and its intentionality as regards the commitment to impact are already expressed throughout our investment processes, we wanted to go further. Thus we have placed integrating our contributions with the SDGs (Sustainable Development Goals) at the core of our mission, and of all our investment processes. In 2020, Mirova adopted the legal status of a Social Purpose Corporation, and received approval as a B-Corp.


The power of change





Additionality through capital allocation

Many people still equate impact investment with investments in unlisted companies. True, in the context of such direct investments, the link between the investor and the project leader is simple to understand. At the level of Mirova’s experience, we certainly observe that communication focused on impact is easier in our natural capital and energy transition infrastructure projects.

However, while this impact seems real enough to us, additionality is not always easy to demonstrate. In the current context of abundant liquidity, some might think that impact projects, if profitable and well managed, ought to find financing, whether from impact investors or the more traditional variety.

In our view, what impact investors can bring to the table is their ability to uncouple from the market when the latter overvalues the risk of certain projects.

High-impact projects are often based on new techniques/technologies, may be located in emerging countries, and frequently face the challenge of scaling up. Traditional investors are rarely equipped to accurately analyse the associated risks and tend to overestimate them.

This is where the contribution of impact investors can not only make it possible to bring a project to fruition, but also swing the market back to a reasonable assessment of the risks involved, paving the way for future financing. In this way, the presence of impact investors makes it possible for sectors to develop, rationalise and become profitable. The mechanism known as blended finance is an example of this approach.

Additionality through investment : the example of blended finance mechanisms

Blended finance is a form of financing in which public and/or philanthropic capital is used to absorb risk and enable the mobilisation of private capital. Blended finance initiatives can help establish investment track record, reducing the perception of risk and thus paving the way for additional private investment in new players, new sectors or new asset classes.

We believe that blended finance instruments enabled the mainstreaming of investment in renewables, and are now supporting the development of investment in natural capital.


Impact is at our core in the Natural Capital business line and, through our pioneering strategies, we have contributed to shaping the natural climate solutions carbon market.

Edit Kiss, Investment Director, Mirova Natural Capital quote

Regarding listed investments, many observers dismiss the idea that investors can have an impact on the grounds that the market is liquid and intermediated. We believe this vision is flawed. While it is difficult for a single investor to influence the market, the system cannot ignore a fundamental trend in investor behaviour.

Whether you look at listed equities or the bond market, the now almost universal consideration of ESG criteria by investors has had a significant impact, first on the way companies communicated, then on their decision-making, and finally on their strategy. ESG considerations affect the cost of financing, the ability to self-finance via bond issues or IPOs, and also the value of securities on the secondary secondary market.


Green, social and sustainability bonds revive a form of capitalism where the investor has full knowledge of what they are financing, and not just of the company and the management to whom they are entrusting their funds.

Bertrand Rocher, Fixed Income Portfolio Manager quote

This increased perception of ESG criteria by investors is gradually making misguided projects less attractive and facilitating access to financing for projects oriented towards sustainable development. And while investors’ impact on this asset class may appear diluted, it is also much broader, because it inspires large-scale change in our economies. These capital allocation choices are a key component of the impact regulated markets have.

However, markets are not always rational, and these movements could result in excessive discrepancies between the valuation of assets and their economic reality, leading to the emergence of a ‘green bubble’ for instance, in which weak projects were overvalued.

Naturally, this should be avoided. A real transformation of the economy can only take place through projects that are both sustainable-development oriented and economically sound.

In this respect, we believe Mirova's twofold expertise in the realms of both financial and extra-financial analysis is essential when it comes selecting our investments.

Additionality through engagement

Looking beyond the allocation of capital, we believe investors may influence listed companies through individual and collective engagement actions with their management. Such an approach alone cannot constitute the core of a responsible investment approach, but it certainly plays a part. Here, two characteristics of any engagement bear close attention. Firstly are the expectations associated with the engagement, which can be determined by an analysis of an investor’s voting policy.

Today, 99% of such policies remain based on the classic doctrines of shareholder governance, according to which management's role is to maximise profit for shareholders.

In order for engagement to have an impact, voting policies must follow suit, placing greater emphasis on sustainable development issues. The second element to consider is the consistency of engagement topics with an investor’s investment policy.

Obviously, if the engagement carries no consequences in terms of voting or investment, it risks being all talk, with no impact.

Our engagement actions are a cornerstone of our approach as an impact investor. We maintain an ongoing dialogue with each of the companies and projects in which we invest. We are also involved in market engagement initiatives, for example on the topics of gender equality in the workplace and the need to measure listed companies’ impact on biodiversity.


Exercise of voting rights can foster the emergence of best practices on sustainable development issues by mobilising investors.

Clémence Peyraud, Product Specialist, Listed Strategies quote

Impact as an asset management company per se, a further form of additionality

At Mirova, we believe that our impact transcends the weight of our assets under management. The creation and development of a player entirely dedicated to financing sustainable development, responding to a different logic from that of the vast majority of the market, demonstrates to financial players and investors that risk/return ratios is not an inexorable force and that a different investment rationale is indeed possible. Coupled with high standards, the generalisation of an impact investment approach to all asset classes also proves that the impact is not the sole purview of unlisted companies.

Moreover, the ability to innovatively structure financing so as to encourage the emergence of players and sectors that are as yet poorly or insufficiently served is a highly distinguishing feature. Whether it be our early investments that helped launch the renewable energy sector in France, our 90/10 funds which fostered the development of responsible employee savings and supported social and inclusive entrepreneurship, or our involvement in the financing of nature-based solutions and natural capital, Mirova has always sought to open up new areas of impact investment.

And last but not least, we actively engage in advocacy with regulators and market players to work towards a generalisation of sustainable practices in finance.

In order for engagement to have an impact, voting policies must follow suit, placing greater emphasis on sustainable development issues. The second element to consider is the consistency of engagement topics with an investor’s investment policy.


It is encouraging to see that more and more companies' executive management are addressing the impact their companies have on the world both by minimising negative impacts (e.g. addressing their company's emissions) and by focusing on sustainable opportunities.

Hua Cheng, Equity Portfolio Manager, Mirova US quote


Proving the relevance of actions undertaken

Our job is to invest. Whether we invest in a project, a company, a public player, this entity will have an impact on humans and on the environment, be it positive or negative. Often, it will even have a whole range of impacts, both positive and negative. This is where the question of impact measurement and communication on the subject arises for investors.

Calculating the impact of a business can be very complex. Few of the existing impact metrics fit into a life-cycle logic (impact of the company, but also of its value chain) or take into account both positive and negative impact (e.g. impacts avoided).

Investors clearly have a role to play in the emergence of standards and databases for measuring a company's impact in ways that are relevant.

For this reason, Mirova tackled the issue of carbon footprint in 2015, bringing to fruition an innovative methodology that takes into account the entire life cycle, covering risks and opportunities. We are now taking a similar approach to enable the design of a metric for assessing the impact of a business on biodiversity, which promises to be quite a challenge.

But whether the topic is biodiversity or another pressing issue, the fact that we cannot yet quantify impact by no means justifies inaction. While precision is certainly useful, the reality is that qualitative analysis suffices to determine whether a business has a positive or negative impact.


Technical difficulties should not be a hindrance to action. While some type of measure seems to us essential as a means of ensuring that an action is headed in the right direction, precise quantification of impact must not become a prerequisite for an investor committed to a sincere impact approach. Often, one can be fairly confident about the positive or negative impacts of a project without being able to precisely quantify them.

Mathilde Dufour, Head of Sustainable Development Research - Listed Equities, Mirova quote



0% 100% St r a t egy Index vs. Commited P ositive Neut r al Risk Negative Impact: Sou r ce : Mi r ov a 20% 40% 60% 80%


gestion actions


gestion actions


gestion actions


gestion actions


gestion actions

How can we quantify the impact of an investor today?

Is it merely the sum of the impact created by the projects in which they invest? It seems a trifle simple, simplistic even, to imagine that by holding 1% of the capital in a company whose activity enables it to avoid 100,000 tonnes of CO2 annually, an investor may claim to have enabled 1% of these 100,000 tonnes of CO2 savings.

Quantitative monitoring of investor impact is very difficult. Tracking the impact of investments at least makes it possible to gather a first set of data for assessment, however incomplete.

Until we find better indicators, we are pursuing what we believe to be the right strategy to create impact, while seeking to report as best we can on our impacts and those of our portfolios. Qualitative elements for each asset class, based on Theory of Change, may, however, be considered in order to better assist our clients in understanding our impact.


In terms of impact, there are two pitfalls we see as essential to avoid. On the one hand, we cannot say that investors have no impact, as though they were somehow neutral with respect to the economy. Conversely, it is also an exaggeration to think that investors can singlehandedly direct our societies to more sustainable practices. Investors have an important role to play in the emergence of a more sustainable economy. But change will come about only if all financial agents —including individuals, companies and regulators— mobilise to make it happen.

Having an impact, for an investor, must involve taking action on capital allocation choices across all asset classes, in addition to ambitious voting and engagement policies and broad-based efforts in the realm of advocacy and communications.

More than the impact of any specific investment solution, Mirova's quest for impact comes into its own through its positioning as a pure player in sustainable investment —through its ability to increase its expertise, to demonstrate the relevance of its model, to offer comprehensive solutions for investors that help them orient their investments, to explore and create new solutions for investing with impact.

Today, this comprehensive attitude towards impact is at the heart of the Mirova approach; while acting on our own scale, we also contribute to leading as many others as possible to join this path.

Download as PDF


Back to top Back to top Back to top