Leslie Griffe de Malval
et Bastien Ducept
Interview with Leslie Griffe de Maleval, Hajar Yousfi and Bastien Ducept, the management team of CM AM Global Climate Change at Crédit Mutuel Asset Management.
What is the DNA of the CM AM Global Climate Change fund?
The climate emergency must be addressed now. To be in line with the objectives of the Paris Agreement, massive investments are needed. They are estimated at 4,000 billion US dollars per year by 2030, or 20% of US GDP. Finance therefore has a crucial role to play as a vehicle for financing companies most active in the search for solutions to accelerate the energy transition.
The CM AM Global Climate Change fund invests for this purpose. It is one of the few international equity funds to have obtained the Greenfin label from the Ministry of Ecological Transition, a guarantee of respect for its theme and its commitment.
The CM AM Global Climate Change fund is an Impact fund and we are pleased to have managed to maintain it Article 9 under the name SFDR: 100% sustainable investments.
What is your investment universe and what are the constraints for your fund?
The fund's universe is made up of international stocks actively involved in the fight against global warming and the energy transition. The Greenfin Label defines the 8 areas of our investment universe: Energy, building, circular economy, industry, transport, information and communication technologies, agriculture (including forests) and adaptation to climate transition. Our international expertise allows us to invest in the most relevant companies of our theme.
The Greenfin label also leads to the almost total exclusion of the nuclear and fossil energy sectors. Taking these various extra financial filters into account is a guarantee of the seriousness of our approach, an approach validated each year by an external audit verifying compliance with the Greenfin Label. The fund also managed to renew its label in September 2022.
What sets the CM AM Global Climate Change fund apart?
It is a global equity fund, this approach allows it to invest in leading companies in their segments anywhere in the world.
The fund is already in line with the recommendations of the Paris agreement with a trajectory of 1.5 degrees, significantly below that of its comparative index, the MSCI All Country World, at 3C°.
Still as a guarantee of the seriousness of its process, the fund obtained the rating of 9.4/10, among the best of its peers, according to the MSCI ESG benchmark for the quality of its extra financial methodology.
What is the outlook for the coming years and how is the fund positioned?
The rise in rates does not stop the rise in global temperature. The year 2022 was one of the hottest five years in history.
The conflict in Ukraine has led to soaring fossil fuel prices and has made states aware of the importance of energy independence.
For example, many countries have accelerated their investment plans in renewable energy and energy efficiency to reduce their dependence on fossil fuels. Examples include the European Union's Repower EU plans, the US Inflation Reduction Act and China's 14th Five Year Plan. Europe would go even further; it would seem that a potential European version of the IRA is under discussion. We are on the cusp of a super investment cycle. These hundreds of billions of euros are a real turning point for the ecological transition. This is driven by a clear regulatory framework giving visibility (tax credits over many years, eligible sectors) and by the investments needed to accelerate the competitiveness of renewables, particularly for hydrogen and battery energy storage.
These plans led the International Energy Agency (IEA) to revise these renewable facility forecasts upwards by 30% over the 2022-2030 period. The latter are expected to grow by 2 400GW over this period, becoming the world's largest source of electricity generation as of 2025, and represent 38% of the global energy mix by 2027.
Many companies in CM AM Global Climate Change are benefiting from these catalysts.
In Europe, the fund is invested in Schneider Electric, a leader in energy management. In the United States, it has positions in many leading solar companies, including Enphase and Solar Edge, which should benefit from sector growth of more than 28% in 2023. The fund is also invested in players exposed to the repatriation of the value chain of the electric vehicle on US soil with General Motors, the leading manufacturer in North America. In China, the fund built a position in Nari Technologies, an electrical transmission company essential for connecting renewables to the Chinese electricity distribution network.