Nature-based solutions to global challenges. Interview with Anne-Laurence Roucher of Mirova.

Of the nine global limits defined by the Stockholm Resilience Centre, six have been reached and exceeded: climate, biodiversity, land use, nitrogen and phosphate cycles, freshwater and chemical pollution. The analysis of international researchers on the risks that human activity poses to our ecosystem is disturbing, to say the least. Anne-Laurence Roucher, Head of Private Equity and Natural Capital at Mirova, does not admit defeat. As far as the development of natural capital is concerned, “it is time to move up a gear”, she believes. This is no empty promise for a company that has been investing in natural capital for more than 10 years and whose assets dedicated to it amount to nearly €600 million.

How do we approach investing in the preservation and restoration of natural capital ?

Through new environmental technologies and nature-based solutions for climate, land and ocean management. The 1.5 degree warming target implies a reduction in CO2 emissions of 23 gigatons by 2030 (based on 2019 levels). Nature-based solutions could account for a third of this reduction. These include CO2 sequestration in carbon sinks (forests or oceans) or the preservation of mangroves that purify water, protect coastlines from wave damage and maintain biodiversity. These solutions are less costly than others and offer joint social and economic benefits that help build resilience. For sustainable climate transition management, we have invested in projects such as the Sumatra Merang Peatland Project, which aims to restore nearly 23,000 hectares of peatland forest in Indonesia.

Can you go back to sustainable land management and what can be achieved ?

A few figures first: between 1990 and 2020, 420 million hectares of forests have been destroyed. Our food chain is at the origin of 80% of this destruction. This destruction affects the poorest rural communities in a very sensitive way. Investing in sustainable practices and certified supply chains, both in agroforestry and regenerative agriculture, allows us to maintain a thriving economy while spreading natural capital. This type of investment can be made through credit, equity or hybrid mezzanine financing. One example is the financing of the Kennemer project, a platform that specializes in supporting a network of small independent farmers in the planting, processing and resale of their agroforestry products (cocoa, bananas or high quality abaca) in the Philippines. Its results: 25’000 farmers assisted in their plantations and 4 million tons of CO2 trapped.

The third area of intervention you mention is sustainable ocean management. Here again, what is it about ?

The case of the oceans is particular because they belong, for the most part, to no one and are therefore no one’s responsibility. While we dump nearly 10 million tons of plastic per year and 80% of our wastewater ends up there. The preservation of marine ecosystems and the communities that live in them is essential to the overall balance. We are concerned here with the sustainable management of marine resources, the mitigation of marine pollution and the protection of coastlines.

What are the returns on this type of project ?

It is quite variable but we estimate returns in the range of 10 to 15% at the project level.

Do you rely on public-private partnerships ?

Yes, we work with public institutions on blended finance models, both in terms of financial guarantees and technical assistance mechanisms for projects.

Some of the solutions you are funding are more of a new technology.

Yes, it is. This is the case of Tallano Technologies, which is committed to reducing pollution linked to the emission of fine particles by braking systems, or of Naïo Technologies, which builds weeding robots that avoid the corresponding chemical inputs.

By removing chemical inputs to increase yields and control pests, is there not a risk of reducing crop yields and leading to further deforestation ?

Agriculture will not be done without inputs, but it will be necessary to favour agricultural inputs that respect the fauna, flora and soils. The reduction of synthetic inputs may initially lead to a reduction in crop yields until the systems rebalance. It is possible to aim for high yields with sustainable farming practices.

Biodiversity is on the agenda. Will it be a question of “biodiversity credits” like carbon credits ?

Not exactly in the same way, because that would imply a tradable “right to pollute” which is no longer acceptable. On the other hand, there is talk of biodiversity certificates on a brand new market where the mistakes made with carbon credits must be avoided. Note that Mirova is a member of the organization in charge of the methodological framework of these certificates, as well as a member of the Advisory Group of the Verra Nature Framework Development Group.

————————————————————————————–

Source: Allnews | 17 Feb 2023 |  Nicolette de Joncaire.

Link to online article (FR)

Anne-Laurence Roucher, Deputy CEO

Anne-Laurence Roucher started her career in 1999 as a project manager in a social enterprise. In 2000, she joined AT Kearney as a business analyst where she became a Senior Associate in the financial institutions practice. In 2005, she joined Natixis Strategy Officer as Project Manager and then Natixis AM in 2007. She is a graduate of ESCP.

Mirova is a conviction-based asset management company dedicated to sustainable investment, affiliated to the Natixis group. It develops innovative investment solutions for its retail and institutional clients, enabling them to accelerate the transformation of our economy towards a sustainable model. Its assets under management amount to more than €27 billion.