Covid-19 has become a caesura of comprehensive magnitude. During the lockdown we have had to live more quietly, more slowly, and we realized that we cannot go on living the way we have lived any longer.

By Anne Laurence Roucher, Deputy Head, Mirova, an affiliate of Natixis Investment Managers

Covid-19 has shown us three problem areas which we have so far gladly suppressed. First, we have issues with globalized trade. Second, we have an issue with our relationship to nature. And third, the realization that our model of society does not work in the long term.

The issue with globalized trade and a globalized economy is that they make clear the extent of the conflict of objectives to which we find ourselves exposed. Globalization helps spread the pandemic, but we also notice the dependency of a globalized economy for almost every single supply chain. Typically, medicine is all produced in China or Asia. This can become a problem at some point and highlights the limit to globalization, which cannot be easily circumvented.
Bad for nature, bad for humans

The Way We Live Today Will Not Last

But there is another limit to globalization exposed by Covid-19. Beyond the economic, it's really, how do we live on the planet? What is the relationship between humans and nature? Covid-19, as a potential zoonosis, might be directly linked to deforestation and intensive agriculture: 75 percent of new diseases are actually diseases that are caused by animals, be they wild or domestic. The way we live and use nature can be detrimental not only to nature but to us humans too.

This crisis can also be a warning signal for another, potentially worse, crisis: the consequences of climate change. We must question the way we use nature and all the side effects it has. They are not obvious, but the day will come when we cannot ignore the signs any longer. The way we live today will not last.

In facing that kind of crisis, social inequalities become wider. Low-income workers who are working on fundamental services such as health are just fighting with the disease, whereas a lot of higher-income classes can do homework and work from home and are less exposed to the pandemic. So, people are not equal in this pandemic – they are likely to end up more unequal by the end of it.

What About Investments?

In these uncertain times, a decline in the asset management business is expected. But what many fail to realize is the fact that priorities change, and so do the ways in which we invest. Mirova, as an asset manager that specializes in ESG investments, has fresh inflows every day. The inflows within ESG investment strategies are a broader phenomenon in the asset management industry as a whole.

And it is probably here to stay for the reasons already mentioned. A combination of financial performance and a better understanding of what is at stake over the long term has boosted the interest for that kind of investment strategy.

Changes That Go Beyond

Moreover, ESG criteria have proven that they can perform in times of crisis. It will continue to exploit its development potential and even become more differentiating. The next question is, probably, what kind of ESG? What is of interest? Is it mainstream ESG? With ESG investments becoming increasingly differentiated, changes that go beyond the investment become more relevant.

It can be through advocacy. It can be through discussions with companies to help them evolve in their management practices or CSR practices. So, we try to be both intentional and additional in the way we invest and engage with companies.

Mirova invests sustainably, and it does so on purpose. We want to be sustainable. We are not just sustainable because we think it will bring short- to mid-term financial outperformance. We are sustainable because we believe in its impact.

Additional notes

This document is a non-contractual document for information purposes only and reserved to Professional Clients Only. This document does not constitute or form part of any offer, or solicitation, or recommendation to subscribe for, or buy, or concede any shares issued or to be issued by the funds managed by Mirova investment management company. The presented services do not take into account any investment objective, financial situation or specific need of a particular recipient. Mirova shall not be held liable for any financial loss or for any decision taken on the basis of the information contained in this document, and shall not provide any consulting service, notably in the area of investment services. The information contained in this document is based on present circumstances, intentions and guidelines, and may require subsequent modifications. Although Mirova has taken all reasonable precautions to verify that the information contained in this document comes from reliable sources, a significant amount of this information comes from publicly available sources and/or has been provided or prepared by third parties. Mirova bears no responsibility for the descriptions and summaries contained in this document. Recipients should also note that this document contains forward-looking information, issued on the date of this presentation. Mirova makes no commitment to update or revise any forward-looking information, whether due to new information, future events or any other reason. Mirova reserves the right to modify or remove this information at any time without notice. Otherwise, past performance is no guarantee or reliable indicator of current or future performance. Performance figures are calculated net management and running fees, included safekeeping fees and commissions.  The information contained in this document is the property of Mirova. The distribution, possession or delivery of this document in some jurisdictions may be limited or prohibited by law. Persons receiving this document are asked to learn about the existence of such limitations or prohibitions and to comply with them. Non-contractual document issued in July 2020.

Reserved to Professional Clients Only

All investing involves risk, including the risk of capital loss. This material is provided for informational purposes only and should not be construed as investment advice, or a recommendation or an offer to buy or to sell any security, or an offer of services. Investors should consider the investment objectives, risks and expenses of any investment carefully before investing. The views and opinions expressed are as of the date indicated and may change based on market and other conditions. There can be no assurance that developments will transpire as forecasted. In Switzerland: This material is provided by Natixis Investment Managers, Switzerland Sàrl, Rue du Vieux Collège 10, 1204 Geneva, Switzerland or its representative office in Zurich, Schweizergasse 6, 8001 Zürich. Mirova, Portfolio management company – French Public Limited liability company, Regulated by AMF under n°GP 02-014 RCS Paris n°394 648 216  Registered Office: 59, Avenue Pierre Mendes France – 75013 – Paris Mirova is an affiliate of Natixis Investment Managers. Natixis Investment Managers Portfolio management company - French Public Limited liability company RCS Paris n°453 952 681 Registered Office: 43, Avenue Pierre Mendes France – 75013 – Paris Natixis Investment Managers is a subsidiary of Natixis.