The ESG Phenomenon: Mirova, Robeco

Editorial Staff 17 May 2023


The latest developments in the ESG space.

Mirova, an affiliate of Natixis Investment Managers focused on sustainable finance, together with Robeco and a group of 11 financial players, has launched a call for expressions of interest to develop a global database of avoided emissions factors and associated company-level avoided emissions. 

The energy transition requires not only moving away from carbon activities but also proposing decarbonised alternatives, the firm said in a statement this week. Although these are mostly known, there is no global, quantified data available to compare them and support redirection of financial flows to companies enabling the decarbonisation.

Estimates of the investment required to meet global net-zero emissions by 2050 range from $109 to $275 trillion, the firm continued. A large portion of this investment will be in so-called “climate solutions,” such as renewable power generation, electrified transport and green buildings. Whilst investment is needed across the board, the incremental contribution of the investment to the low-carbon transition is dependent on the location and the type of the investment.

Metrics are needed, however, to identify their respective contribution to the global net zero objective and compare solutions. One such measure is avoided emissions, sometimes referred to as “scope 4.”

Unlike induced emissions that benefit from strong methodological bases, avoided emissions are calculated in a variable manner by different companies, which jeopardises their credibility and prevents their use at scale, the firm said. This was recognised recently by the G7 who called for the private sector to work together to develop an international standard.

That is why a group of financial institutions, led by Mirova and Robeco, came together through a call for expressions of interest to enable the creation of a globally accessible common database of avoidance factors (Batch 1) and the estimation of emissions avoided by companies over a wide investment universe of listed companies (Batch 2).

Manuel Coeslier, lead expert, climate and environment at Mirova, said: “The financial sector plays a key role in driving the economy towards net zero emissions globally. To this end, clear and comprehensive information on companies' true contribution to the global net zero objective is essential.” 

“This includes a robust measurement of avoided emissions. As a mission-driven company, Mirova seeks to continuously improve its approach and drive the market towards more ambition and transparency. That is why we are very proud to be at the forefront of this initiative,” he added.

Lucian Peppelenbos, climate and biodiversity strategist at Robeco, said: “The net zero transition is a massive opportunity for investing in climate solutions and emission mitigation technology. Robeco is implementing investment strategies that focus on this opportunity, but at a global level climate finance is six times lower than what is required.” 

“Forward-looking metrics are key to increasing climate finance. This includes a credible measurement of avoided emissions. Transparency and a common methodology are essential, and we hope this initiative may contribute to establishing this,” he added.

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