Ideas
The green bond market has undergone rapid expansion over the last five years. Given its still small size compared to the bond market as a whole, investors remain cautious regarding certain features of green bonds, such as the liquidity of the market.
Nuclear power makes up about 9% of global electricity generation, with 443 reactors and 385 GW of capacity in operation today. This includes reactors in 31 countries, with Belarus and the United Arab Emirates currently constructing their first (World Nuclear Organization 2016).
Regulation, cost reduction, and the rise of renewable energy in the United States. Historically and famously fossil-fuel dependent, the U.S. energy and electricity mixes are evolving quickly as costs fall for renewables, regulations mandate their implementation, and fiscal policy incentivizes their installation.
Understand, take action, and be accountable. If we are to successfully address the challenge to our civilizations posed by climate change, these are imperatives that must be heeded, not only by political decision-makers and regulatory bodies, but companies as well. Obviously, the responsibilities and levers for action relevant for various parties will differ significantly. But few today can claim that these issues are no concern of theirs. The financial industry especially, and more broadly, the many players holding roles in the capital markets, possess considerable leverage for driving change. This conviction is the cornerstone of Mirova’s foundation as a business, as a company.
For some, a responsible investment is by definition a long-term investment. And they’re right, to be sure. Problems arise, however, with any attempt to define these terms. Surprisingly, it is almost as difficult to achieve a consensus on the meaning of long-term investment as it is to arrive at a broadly acceptable definition of responsible investment.
We are today indisputably enmired in a crisis. So why, one might ask, are the pages of this periodical devoted to such seemingly disparate events as a fire at the Rana Plaza in Bangladesh, or Europe’s horsemeat scandal. Indeed, given the current situation, these choices might appear dictated by sentimental considerations, out of place in the serious study of macroeconomic issues such as Europe’s sagging economy or budgetary and monetary policies that show every sign of being dangerously out of kilter. However, we are convinced that trusting to appearances would be tantamount to confusing a force and its expression, and that dismissing the events we describe would be a mistake. Remember that the strategies for overcoming economic crises have often arisen from ‘scandals’ that served to awaken a public conscience and provide the impetus needed by public authorities to implement reforms.
Why we created Mirova The current imbalance between growth and debt, the decorrelation with the real economy, the depletion of natural resources, and climate change issues all highlight the fact that the current economic development model is no longer sustainable. Whether it is seen as one of the causes of this crisis or merely as a catalyst, the finance industry also represents a major part of the solution. This is particularly true for the investment industry.
