Meaningful action must be taken now to combat the climate crisis. But while individuals and industries may be willing, the fuel of capitalism – investment – exists only to generate business growth. The solution, says Mathieu Chabran, Co-founder of Tikehau Capital, is for the investment industry itself to change, but the clock is ticking: 

“The issues we are facing are global. Today you can see a real focus from the whole institutional investor base on the matter of climate change: we just cannot do otherwise. It’s a necessity. We’re only 3,000 days away from the target that we all set. The amount of savings that need to be transferred is some three/four trillion every year, which is where private market managers have a huge opportunity and responsibility to be part of this transformation.”

Tikehau Capital is an alternative asset manager overseeing more than €35 billion across Europe, Asia and the United States. The Group employs over 700 people to focus on the goal of ensuring that the transformation happens. Pierre Abadie, Group Climate Director and Co-head of Tikehau Capital’s T2 Energy Transition Private Equity Fund says that they have the tools to enact change: 

“The private sector is very important in the race to combat climate change. The investment needed to decarbonise our system is just enormous, so it is anticipated that more than 75 percent of the financing gap will come from the private sector.” 

In order for this to succeed, investors must marry sustainable funding with the kinds of returns that their clients expect, as Cecile Cabanis, Deputy CEO at Tikehau Capital explains: 

“Our responsibility is to be disciplined and selective in how we choose where to invest money. It is not economic performance versus the overall value creation: it’s economic performance plus environmental protection plus social performance. Otherwise you won’t create any sustainable value in the long term.”

Cabanis says that Tikehau Capital seeks to achieve “ESG by Design”, building change around an impact framework that lends credibility to their actions: walking the walk as well as talking the talk when it comes to supporting the transition within the economy.

Cabanis explains how the evidence-based approach is structured: 

“The impact framework is built around three pillars. The first one is intentionality, so knowing what we mean to achieve. The second is what we call additionality, asking what value can be added. And the last one, maybe the most important, is impact measurement to make sure we are on track to achieving our goals.”

Together, these pillars support a philosophy that, in Pierre Abadie’s words, is “compatible with what the science is telling us”: 

“We are here to support companies’ growth and therefore we are very involved in their development. The quicker those companies grow, the bigger their offer of decarbonisation. That is the main target of the fund that we’re currently doing.”

Abadie cites the T2 Energy Transition Fund, a European fund that is fully dedicated to the decarbonisation of our economy: 

“We collect the global savings and invest these into the companies that are providing either products or services to help organisations and individuals to reduce their carbon footprint. We are speaking about energy efficiency in factories, the penetration of renewables and the penetration of electro-mobility.”

To tackle a global issue, Abadie says the company has widened its horizons with ambitious plans to invest in the world’s biggest and most dynamic economies: 

“We have been investing in several countries in Europe. We have been investing in France, and we also have portfolio companies in Spain, Italy and Ireland. The next step for us is to create a new leg in North America with a fully dedicated team that will replicate what we have successfully done in Europe for more than three years. 

For Mathieu Chabran, sustainability has to be front and centre of investment decisions, championing this new way of doing business so that it becomes the norm in the future: 

“Sustainability shouldn’t be just an opportunistic move, as that risks being far too superficial for what we are trying to achieve. Sustainability has to be at the core of what we collectively as a people and a civilisation have to embrace, to reinvent finance and the way that our resources are being used and allocated.”

Ultimately, Chabran says that what the world needs now is to be led in the right direction – a role he is determined to see Tikehau demonstrate: 

“We at Tikehau have a very flexible way of showing results within this timeframe, but more importantly showing the way and hoping that others will join us in this imperative.”