Asset managers rise to the energy transition challenge
For Laurent Jacquier-Laforge, CIO Equity at La Française Inflection Point, asset management players cannot steer clear of secular trends and need to make choices to help adopt a carbon-free economy.
It is no longer enough for asset managers to observe companies through the prism of their financial data only.
Although such information reflects the company’s past, it does not identify breaking points, which are increasingly frequent with new technologies and globalisation.
A striking example is that of Nokia, the major leader in mobile terminals in the early 2000s, today reduced to being a minor player due to failing the smartphone transition.
Over the last fifteen years, the emergence of SRI has fostered the integration of non-financial criteria into corporate analyses.
In addition to these environmental, social and governance (ESG) criteria, we felt it essential to consider the company’s capacity for innovation and adaptation.
That is the aim of “Strategically Aware Investing”, as adopted by La Française since its partnership with IPCM (Inflection Point Capital Management).
This approach is particularly suited to the requirements of the energy transition and really strikes a chord in the run-up to the Climate Change Conference (Cop21) that will be held in Paris at the end of the year.
Investors and listed companies are both under rising pressure. The latter represent the raw material of our business activity, so to speak, and are prompted to think about reducing their carbon emissions.
This pressure is universal, and was reflected in the Harvard student protests calling the school to divest funds from corporations in the energy sector.
Their capacity for adaptation to this new reality will therefore be a key factor, especially given that some players are making swift progress in this regard.
When Tesla Motors was launched in 2003 with the slightly crazy project of creating an electric sports car, there were a few laughs. Today, however, their turnover exceeds $3bn and Tesla has launched batteries enabling homes to store energy.