Solar Photovoltaics in Europe

Sara Di Mario is an Entrepreneur and former Executive with a wide knowledge of the Photovoltaics market in Europe, for over 17 years. She has been Chief Operating Officer in the European Energy & Infrastructure sector (EF Solare and Green Arrow Capital), having managed two of the biggest European renewable energy portfolios across all the renewable technologies (over 400 sites managed for 1,3GW and 5B€ asset value).

Since 2021, she runs her own company, Hazel New Energy, which focuses on investing in renewable energy assets and providing advisory services for clients’ development needs with a particular focus on energy transition projects.

Below are some key insights from Sara on Photovoltaics in Europe, its latest trends as well as its competitive landscape in Europe.


What is the contribution of solar PV to European electricity production? Which states/countries are leveraging this the most and why? 


Solar PV is growing fast at the European level despite the COVID-19 pandemic. Germany is confirmed as the first market with 5.3GW of new capacity installed in 2021, followed by Spain (3.8GW), Netherlands (3,3GW), Poland (3,2GW), and France (2,5GW). It is interesting to underline that for Germany this was due to a strong and stable subsidy structure aimed at increasing auto-consumption and pushing on the development of industrial plants up to 10MW thanks to feed-in tariffs and auctions, while for Spain this increase was mainly due to the high solar radiation that led the country to be Europe’s first subsidy-free market in Europe. Most of European markets are currently pushing on rooftops and auto-consumption solutions, despite often facing local or permitting complexities in addition to several problems related to grid constraints.

Countries with the biggest installed capacity are Germany (59.9GW), Italy (22GW), Spain (17.9GW), France (13.2GW), and the Netherlands (13.1GW).

In 2021, we faced an increase in energy demand that was around+4% in Europe compared to pre-pandemic figures, after two falls of -1.3% and -4% in 2019 and 2020 respectively. This increase has been served by a +11% coal production increase and by nuclear (+6%), while only by a low +1% of renewable energy generation. 

If you look at these figures and consider that solar represents only around 10% of renewable energy production at global level (renewables account for 28% of global energy production), this means that we have a long path in front of us.


Is solar PV subsidised in Europe? How competitive is the market among private players? 

Subsidies have been fundamental for the market so far. In particular, in Germany a big portion of solar success is still due to both auto-consumption and stable and attractive feed-in tariffs for bigger plants, while in Italy and Spain this was true only in the past. Southern European countries can however benefit from high solar radiation and, as a consequence, in some areas subsidies are not needed anymore. Nevertheless, the complexity of permitting rules and change in regulation can slow down and, in some cases, stop the market. This was the case of Italy, while Spain for instance has been able to exploit its geographical advantage and speed up a market mainly based on PPAs (power purchase agreements) despite the grid connection constraints.  

Other Northern European countries such as Denmark have been able to exploit corporate PPAs and favour a fast growing market. 

What emerges here is that the main aspects to be considered in addition to subsidies are permitting rules, grid constraints, and the possibility to sign PPAs and corporate PPAs. A favourable regulatory environment is often, as you can see, much more important than subsidies to let solar market flourish.



In discussions around Solar PV vs Concentrated Solar Power (CSP), where do you see future trends leaning towards and why? 

CSP installations are negligible in terms of capacity compared to solar pv, as a consequence it is hard to compare these two technologies given the different level of maturity of the respective markets.

From a technical perspective, we have to remind that CSP basically converts solar heat power into thermal power using mirrors, and this can be done through several technical solutions and configurations. This high temperature heat can both be used to produce energy through turbines and be stored, despite only a few existing CSP projects have storage facilities so far. This means that CSP is able to create a stable, night and day, energy production. However, it is technically complex to be built and managed, being probably more similar to a gas turbine than to a solar PV plant.

As such, solar PV and CSP do not really compete from a technical point of view but can be integrated to create a clean and stable energy production plant. Solar PV is much cheaper and produces an unstable flow of low-cost energy. CSP is more complex and expensive, however it can support in creating a stable flow of energy. 

The mix of the two technologies could really be successful to create stable and controllable renewable energy plants. CSP unfortunately is not mature enough from an economical point of view and should be incentivized to have the technological boost and cost reduction that we experienced for solar PV. In addition, there are only a few operators able to build and operate a CSP plant, so there is a lack in technical and operational competency that should be filled.


Is there any impact of solar PV on the environment? Are there any rare materials involved in production of PVs?

Solar PV surely has an impact on environment during the modules’ construction phase. They are basically composed of a frame, cells, backsheet, protective film, conductors and a tempered glass cover. The frame is aluminum, the cells are silicon coming from quartz, the conductors are copper and the backsheet and film are typically a polymeric material.  Mining, cleaning, manufacturing and transportation of all these components require a big amount of energy. The positive aspect is that once they are installed solar plants need negligible additional energy to be managed and their lifetime is estimated around 25 or 30 years.

Solar plants indeed require around 65% of total energy in the modules production phase, around 25% in the operational phase and the rest during the disposal phase. Coal plants, on the other hand, consume 98% of total energy during the operational phase instead.


What are the CO2 emissions of a PV system? Can a PV panel be recycled, what is its lifetime today? 

First of all, emission intensity of a system is represented in total carbon emission during the lifetime per unit of energy, and its measure unit is grams of carbon dioxide equivalent per kilowatt-hour (gC02e/kWh). In the last decade some studies estimated emission intensity for solar in around 40 gC02e/kWh compared to coal that is around 1.000 gC02e/kWh. This would mean that, despite the huge amount of energy used in the production phase, solar is still a sustainable resource.

The hot topic here is modules disposal after they have completed their lifecycle.

A consolidated industry of modules disposal did not start so far: the topic has been studied and, theoretically, all the components are fully reusable, but a real market of end-of-life management is still to come. In 2016 Irena has estimated that recycling solar PV panels at the end of their lifecycle could unlock an estimated stock of 78 million tonnes of raw materials and other valuable components globally by 2050. This would translate into an economical value in excess of 15 billion dollars in terms of recovered materials.

In a nutshell, favouring a solid recycling market would not only have an environmental value in terms of reduced emissions but also a valuable economical added value.



Can you elaborate on new innovative trends in the use of solar PVs? eg. Agrivoltaics or any others? 

Agrisolar allows to meet four out of the seventeen SDGs - Sustainable Development Goals (number 2, 7, 13, 15, i.e. Zero Hunger, Affordable and Clean Energy, Climate Action, Life on Land). This gives an idea of how fundamental for our future this solution that combines sustainable agriculture and sustainable energy would be.

In addition to that, studies at European level show that agrisolar projects increase farming production by 3-10% and reduce water waste by 70-80% so far. These figures are mainly due to the protection that modules and agrisolar structures guarantee to the cultivation and the technological support of the monitoring system and web connection of the solar plant that can be used to implement an advance farming activity, thus optimizing irrigation. EU estimates around 40% of overall water resources are consumed in agricultural, forestry and fishing activities, so reduction of water consumption is one of the main added values of this technology.

Agrisolar projects, however, must be very well designed from both a technical and a contractual point of view: the solution must perfectly fit the expected farming activity, and during the operational phase the proper needs of both solar plant and farming activity must be taken into consideration. What can likely happen if these aspects are not properly arranged in advance is a continuous quarrel between the parties involved. To avoid that, interests must be aligned and a balanced sharing of results would be a successful solution.


For investors out there looking at the solar PV market, do you have any concluding thoughts to share on the immediate future of solar PVs? 

Solar has become a mature market and, as such, "responsibility" must be a keyword from now on. The new models based on the figure of the prosumer (producer + consumer) or, even more, on the prosumage (producer + consumer + storage) require much deeper technical knowledge and a focus on grid issues. Market operators must now focus on market requirements and on final customers, they can not afford anymore to put energy in the grid relying on someone else to manage the system. Investments in competencies and technologies are needed and investors should look at the broader picture relying on managers and advisors that are really able to add business value and not only focusing on financial aspects.

This is a moment when we are creating the energy transition but no one exactly knows what this means in practical terms: we must work on creating a sustainability culture and a technical know-how able to boost the creation of new business models. We must be brave.


We would like to thank Sara for her time and these valuable insights she has provided. 



Key insights on Biofertilizers: Making every molecule count

Franck Boher has 25 years of experience in Agro-agri industries (Groupe Roullier, Tessenderlo Group, Fibrant) which allowed him to develop an in-depth knowledge of the sector, which he shares with us today. Launched a year ago, his company Upgraid focuses on developing projects and solutions for sustainable agriculture and Agro circular economy. His most recent position prior to launching Upgraid was as Business Unit Director at Fibrant, the world’s leading producer of Caprolactam and Ammonium Sulfate, serving automotive, textile and agricultural industries.

Below are some key insights from Franck regarding Biofertilizers, its impact and what the future holds.


What are the effects of fertilizers on the environment?

The entire fertilizer value chain stands out as a priority to reach global sustainability goals because each segment has a significant impact on the environment, i.e. from raw materials sourcing to manufacturing process, supply chain organization and fertilizer application.

Chemical fertilizers, also known as conventional fertilizers, involve heavy-duty mining activities and energy-intensive production processes presenting substantial CO2 and GHG emissions. The prospects of an EU carbon tax policy, led all blue chip leaders of the fertilizer production sector to announce plans to cut emissions per ton produced, by 15% to as much as 40%. This goal is expected to be met by relying on low emission feedstocks like blue or green ammonia, carbon capture units and various process innovations.

The industrial model of the sector, based on gigantic factories located close to petrochemical or mining activities and exporting to remote markets, makes the supply chain segment of the fertilizer industry - a big contributor of emissions and pollution linked with logistics and storage as well.

However, it is the fertilizer application phase that triggers emissions, nutrient losses, soils exhaustion and pollution which, at the current level, are seen as hardly compatible with a sustainable agriculture model. A glaring example is summarized in the fact that each ton of urea applied (a nitrogen fertilizer best seller) will release 650 kg of CO2 in the atmosphere through hydrolysis. From a sustainability perspective, importing urea is like importing CO2 emissions.

In terms of agricultural practices, applying increased volumes of fertilizer has long been the easiest solution to obtain optimal crop yields despite exhausted soil life. Recent expert reports reckon that an average 24% of conventional fertilizer units applied – and in some exhausted soil up to 72% - are being lost into volatilization, leaching (nitrogen) and soil immobilization (phosphate), often with a devastating pollution impact on water ecosystems.

             Source : From farm-to-fork, The European Green Deal

Under many of these aspects, biofertilizers may appear as the sustainable alternative to intensive fertilizing practices that leverage conventional chemical fertilizers.


What are the advantages and disadvantages of Biofertilizers?

Biofertilizers encompass 2 main categories of fertilizing products :

  • organic fertilizers extracted from various biomass sources, mainly animal manure, water treatment systems and by-products of the agro-food and agrofeed industry; an example is the processing of animal blood from slaughterhouses into blood meal pellets, an interesting nitrogen biofertilizer with 13.5 units of nitrogen per ton,
  • natural fertilizers, which are naturally-occuring minerals obtained through mechanical extraction and transformation without chemical synthesis. Rock phosphate, kieserite, and some potassium sulphate sources are good examples of this.

Both sources have been positioned as approved solutions for organic farming : a set of norms and labels, products and agricultural practices aimed at providing the final customer with the relative guarantee that one could stay immune to food contaminations by unwanted chemical substances. 

As this organic fertilizers framework gradually becomes a level-playing field internationally - though often subject to fraudulent claims – relevant producers sell their bio-fertilizing nutrients from 1.3 to 12 times the price of equivalent conventional fertilizer nutrients. A key advantage in terms of revenue model.

The main drawback of biofertilizers is their relatively low nutrient content versus high-nitrogen or high-phosphate conventional fertilizers, which makes them pound-for-pound costly to haul and costly to apply, and agronomically not the weapon of choice on short cycle crops requiring fast-acting nutrients.

The lack of availability in volumes is another point which restricts biofertilizers to be used for high value crops like vegetables and orchards, which can afford it and value the ”organic” claim. The fertilizer industry competes with higher valorization streams like the feed, petfood, food and pharma industries, which extract high value active ingredients and deplete proteins and enzymes from the substrate. We will discuss the impact of scarcity on the needs of the fertilizer industry in detail ahead.


How do Biofertilizers fit into the circular economy?

Organic biofertilizer facilities are now ticking the boxes of a new set of advantages, as they become the epicentre of new regulatory incentives like the farm-to-fork framework in the EU and similar sustainability programmes in the US, UK and even countries like Japan or South Korea. Being mostly from biomass origin, they stand for renewable sources, low emissions and low energy consumption, locally sourced and a good example of by-products upcycling

Biofertilizer production units often integrate biogas production which can make the all facility energy and emissions-neutral by some standards, although solutions for the biomass digestate have to be properly thought for from the conception phase.

This, if well-documented, makes investment projects in this field eligible for a variety of public subsidies, investment incentives and grants of construction permits whereas conventional fertilizer plants are gradually kicked away from cities and sea shores as persona non grata. 

Logically, biofertilizers score high on the ESG scale which triggers good access to financial markets while conventional fertilizer businesses may find it hard to stay away from ESG bans in the future.

Being considered an environment-friendly business with high circularity potential, comes with perks that significantly better the ROI and company image, which in turn makes it a good investment project even for companies not specialized in fertilizers, but looking for opportunities to generate more revenues with their organic by-products or aiming towards environment neutrality to comply with Board requirements.


Is the stock of Biofertilizers able to meet the needs of the industry? Can we produce enough?

As mentioned earlier, biofertilizer resources are scarce and often preempted by higher value industries. Though quite attractive, this would be bound to limit the growth potential of the biofertilizers sector, if it wasn’t evolving towards the more lucrative pharma model of active ingredients extraction to compete on more equal terms for the biomass resources with food and feed industries. 

As some key players in the fertilizer sector learn to valorize biomass beyond fertilizing units and switch their business and revenue model from intensive soil fertilisation products to optimized precision plant nutrition systems, biofertilizers become the door opener product to even more rewarding markets like biostimulants, plant growth promoters, plant immune system promoters, plant and soil testing. 

For the leading players in the biofertilizers industry, each dollar spent in acquiring the biomass resources, generates more than a hundred dollars of revenues in products and services. Even when it comes to biomass and by-products, as a leading group in the fertilizer sector puts it :  “every molecule counts” is the new focus of the biofertilizer industry.  

Food industry expert Frédéric Milgrom

Food industry: Post-Covid trends and opportunities

An interview with Frédéric Milgrom, president of B2C Advisors, a consulting Boutique dedicated to food retailers and producers.

Frederic Milgrom is heading the specialized strategy Boutique, B2C Advisors. He advises corporate clients and investors on strategy and commercial excellence. As a former senior member of the Oliver Wyman and EY Parthenon retail and consumer practices, he has personally led numerous (30+) due diligences and strategic reviews in the Food sector (upstream, production, retail) over the last years.


What are the key trends emerging in the pandemic/post-pandemic European food industry?

The pandemic situation has largely accelerated the disruptions that had been gaining steam for years. And the real “new normal” may be the fact that all the players have to deal with much more fragmentation and volatility than before.

The acceleration is clear in terms of :

  • the digitalization of our ways to shop for food and to receive “home dining” delivered to our doors (we witness all the quick commerce launches and investments of the last months, but also all the massive investments by large retailers into their home delivery and click and collect platforms and into their collaboration with Deliveroo, Uber Eats and the likes);
  • the increased polarization in the way people shop, between categories where they look for a bargain and/or a hassle free experience (simplistically said, that is mostly dry food) and the ones where they look for quality and are emotionally attached to what they buy and eat (most fresh food / babyfood / petfood); this, combined in some European countries by an actual or anticipated loss of purchasing power, makes all the “downtrading” and “ uptrading” trends even stronger, with even more trade-offs; and this puts mid-market and secondary brands and products under pressure;
  • the number of shopping alternatives to the traditional supermarkets and superstores (be it organic players, fresh specialists, frozen food ones; it is the high-end ones that are making a strong come back, ready meal kits providers, convenience specialists, bulk purchase outlets…) with an associated fragmentation in the way we purchase products;
  • the demands on the food value chain to limit its carbon footprint and to mitigate climate change, combined with a more widespread consumer aspiration to reduce animal protein and dairy intakes, destabilizing some well established European value chains and favouring the consumption of locally produced products, a.k.a. localism.

And volatility is increasing, as of now with large and rapid variation in commodity prices. This may continue, as the macro-economic background will stay uncertain as long as our economies have to carry high levels of debt. We may see tensions between (temporary yet significant) inflation spikes and (structural) deflation.


You have mentioned localism as an accelerated trend. Could you elaborate on this?

Well, this trend tends to be present in most European countries, Local seems to be “beautiful” but also “small” (ie small producers of local brands) is becoming “beautiful” and “competitive”! If we take the example of France (a market which was the focus of an HEC business school webinar before the summer, with the help of Nielsen IQ Europe):

  • Most consumers have developed a significant attraction to local offers and small brands for several years, whose proximity seems to guarantee quality, tracability and environmental sustainability. For example, at Intermarché, the #3 player on the French market and the fastest growing retailer, small and very small companies represent 11% of the Chilled and Fresh sections revenues and 27% of the year to date growth;
  • Grocers are increasingly listing products from smaller manufacturers and local products, by a multiplier of x2 for “ETI” mid caps products and x4 for “SME” small caps¹.
¹Growth of the listed offer for ETI originated products : +20% since 2014, versus 11% for large cap companies ; and for PME : +41% ; to be compared with TPE products : +8% ; source Nielsen IQ France


Why? Because small and / or local manufacturers can leverage a certain customer intimacy, an ability to adapt and target "niches", which, in this age of accelerated fragmentation and polarization, gives them an advantage.

As a consequence, Nielsen IQ forecasts that small and mid caps players will continue to have an edge in the coming years in most of Europe (see graph below with a forecast for France). They will capture market share and the lion share of the (limited) grocery market growth.



What are the implications of the trend in favor of small and local producers for your corporate clients?

Firstly, retailers are in a current “race” to list and list new local products. As long as they detect a marketing edge in the product, they reach good unit margins and have capacity in their warehouses and “dark stores”, they will do it! They will compute the maths later, once they have enough historical customer and basket data to detect which products are bringing enough incremental sales and margins and which are not. Then they will be in a more selective mood.

As per producers, it depends on their size and more importantly on whether they are a large incumbent in a given category or not.

If they are a large incumbent, they are trying to defend their existing positions and at the same time to ride this wave by launching new/niche/local products. However, this is not so easy to do, especially if they have been used over the last decades to focusing only on a couple of umbrella brands and large production series. Yet, some will persist and manage to run an efficient dual business model (large brands and series on one side and small brands with a flexible production set-up on the other side).

As per our smaller clients, they thrive on this! For them the issue is to deal with the speed and cost of growth: how to grow nationwide? With which field sales force and logistical set-up? How to be successful in E-commerce, while not having the same access to digital skills than some of the big guys and without relying on a big proportion of blockbusters? How much to invest into (retail) prices and commercial conditions to enlarge one’s reach? How to make such investments accretive?


And what are the opportunities for financial investors?

The investors active in the field are small to midcap investors: they can play a big role into making the local player national, by providing the cash, including for selected external growth (to add some relevant products), by giving the clout to recruit the required managers, and by guiding the portfolio company towards more advanced digital and revenue management methods, all this being necessary to capture the tappable growth and optimize the cost of growth… If this “play” is well designed and executed, the value creation can be important and exit stories to larger consumer products players do exist … Current landmark examples are:

  • The “Gozoki group”, France, which with the backing of Crédit Mutuel Equity, is grouping speciality products and brands from the South West of France, with one single sales force, a common commercial approach and some cost synergies;
  • The “Ankerkraut” spices company from Hamburg, Germany, that is rolling out its hybrid Direct to Consumer and wholesale business model, with EMZ Partners as a shareholder;
  • The “All good” high end tortilla company, which, based on a commercial and production base in the North East of the UK and strong links to Marks & Spencer, has managed to become national, with the backing of NVM, and is now part of the Capvest-backed Irish Valeo food group.

ransomware experts ludovic petit

Part-II: Cybersecurity Breaches - Human impact and Regulations

In this second-part of our discussions with Cybersecurity expert - Ludovic Petit, we particularly focus on the impact humans have on not just causing cyber-attacks but also on mitigating the risks involved in the world of Cybersecurity Breaches.

(Part-I with Mr. Petit : The world of Ransomware: trends, recent issues & awareness

Ludovic PETIT is Chief Executive Officer at JADE, a cybersecurity and business strategy consultancy. He assists companies to create a unifying and value-creating culture of digital security through consulting missions related to cybersecurity and business strategy, legal compliance on information security and through audits. Being a well-respected authority on cybersecurity and data protection, Ludovic PETIT also serves as Associate Researcher at the Research Center of the National Gendarmerie Officers Academy, Commander, Defence and Security Citizen Reserve Gendarmerie, Auditor of the High Studies Centre of the Cyberspace, member of the Board of Directors of Cyberlex, the Law and New Technologies Association and was Global Chief Information Security Officer at Altran.

It is true that every system is not perfectly secure. However, a lot of breaches are explained by the lack of best practices (human level) and by cunning methods like Social Engineering - could you please elaborate on these factors? 

Mr Petit: There is no such thing as 100% security, in fact for a quite simple reason: technology today is so complex that there can be errors in software design, or in operational implementation. This is a fact, and we must accept it as such.

Thus, for developers, the concept of "secure coding" about software design, whose purpose is to minimize the possibility of vulnerability in the code you write.

Secure Coding is a technology agnostic set of general software security coding practices, which can be used in a comprehensive checklist format, that can be integrated into the development lifecycle.

The reference in this area is OWASP, a non-profit foundation that works to improve the security of software.

OWASP provides an open-source training platform created for developers to learn and practice modern secure coding techniques, and helps develop secure coding skills through real-world challenges, to ensure knowledge acquired can be confidently applied in the real world.

The daily cyber news unfortunately shows us that, far too often, the principles of security and secure coding are obviously not respected, but this is not the main reason.

The combination of 'security patch not applied, or not up to date' + the 'lack of security process' in the operational implementation of the solution generally leads to major flaws and issues in information systems, so in information security. Let’s now switch to Social Engineering.

Social engineering is the term used for a broad range of malicious activities accomplished through human interactions. It uses psychological manipulation to trick users into making security mistakes or giving away sensitive information.

What makes social engineering especially dangerous is that it relies on human error, rather than vulnerabilities in software and operating systems. Mistakes made by legitimate users are much less predictable, making them harder to identify and thwart than a malware-based intrusion.

The interesting thing about social engineering is that, although it can be dangerous for a company, it can also be used by the company in security awareness sessions for its employees.

The key is psychological manipulation, depending on the level of credulity, emotion, guilt, responsibility of the person under attack.

A well-known example is the “Fake President Fraud” or “CEO Fraud”, a social engineering attack where a hacker tries to convince a financial department employee of a company to send out a payment to the attacker’s bank account, by claiming an emergency context under false pretences.

Another classic is to call a company's switchboard pretending to be a service provider to obtain confidential information about people or internal processes, which can then be purposely exploited by competitors or hackers.

Although most of the time, attacks are carried out either by an email (Phishing) targeting a specific person (Spear Phishing attack) or directly by phone, social engineering attacks come in many different forms and can be performed anywhere where human interaction is involved.


What is the weight of human involvement in Ransomware issues?

Mr Petit: To be pragmatic, I would say that prior to any involvement of a target, interest must first and foremost be aroused.

I ‘skip’ over the types of attacks that rely on technical and security weaknesses, allowing the hacker to inject and activate malware/ransomware within an information system.

This is a phase of a process well known to hackers, in which one is already doing what is called a 'mapping' of the context one is trying to target, to perfect what is called 'target acquisition'. In other words, we first gather information on the company, its context, its business, its financial value, etc., to design a succinct but realistic approach that will arouse the interest of the target person regarding his or her daily activity.

And what medium to use for this if not the free and most used service on the internet… namely email.

The ROI of a ransomware attack carried out by messaging is unparalleled, as it is free, fast and cannot be formally identified.

It only takes one person in a company to click on a link in an email forged by the hacker, or to open a document attached to the email sent, for ransomware to be activated on the target person's computer/system. Done!

In fact, to sum up, reality of facts shows that the weight of human involvement in Ransomware issues depends on the level of awareness of the individual. And it is not always easy to detect a phishing email that might contain Ransomware, because, whatever one thinks, hackers are also very clever.

There is no magic or 'one size fits all' solution.

The implementation of a solid anti-spam solution for email is obviously a requirement. So is raising staff awareness of security risks.


A wave of attacks has been surging over the last months on countries and companies. After the Colonial Pipeline’s attack, the White House wrote an open letter where it reminded the need for companies to adopt better standards of security. Could you please share your inputs on the specifics discussed here? 

Mr Petit: President Joe Biden and the White House have acted on major cybersecurity risks as a matter of national sovereignty, just as it is for France and every other country in the world.

Without playing devil's advocate, let us not forget that a legislator/a country legislates when the industry is not able to take the necessary measures to manage and mitigate risks, or issues, which sometimes impact on the continuity of service provided to individuals or the nation, or which could potentially harm a nation's interests.

In France, for example, this led to the creation of the status of Operator of Vital Importance (OIV), whose Military Planning Law (LPM) obliges operators designated as being of vital importance to the nation to adopt a certain number of measures designed to protect their integrity and that of their computer systems. The LPM also includes implications for partner companies and/or subcontractors of companies qualified as OIV.

Another example is the status of Essential Service Operator (Opérateur de Service Essentiel - OSE) and Digital Service Provider (Fournisseur de Service Numérique - FSN), which are dependent on the Network and Information Security (NIS) Directive that requires them to ensure a high level of security of their networks and information systems.

This is in fact due to a paradigm shift:

Historically, until the beginnings of the Internet at the end of the 1980s, technological developments took precedence over the legal reference framework, which had not evolved accordingly, posing a major problem for the legislator.

The law then evolved in line with technological developments, as in France in the case of the Godfrain Law of 5 January 1988, on computer fraud, the first French law to punish acts of computer crime and hacking. It is one of the pioneering laws concerning the law of new information and communication technologies (NICT), after the law of January 6, 1978, called "Loi Informatique et Libertés”, which introduces the notion of automated data processing system (STAD) and provides for several correlative provisions of the Godfrain Act (concerning the obligations of the data controller with regard to guaranteeing the security of the data - Art. 34 of the 1978 Act).

This trend has since been reversed, and France has been a forerunner in legal developments relating to new technologies, emulating many around the world, as for example the California Online Privacy Protection Act of 2003 (CalOPPA), which came into force on 1 July 2004 and was amended in 2013, and which was the first state law in the United States to require commercial websites and online services to have a privacy policy on their website.

This paradigm shift is illustrated by the fact that, nowadays, and for the last twenty years or so, the legal and regulation framework rule the technical means to be implemented to comply with the law, as for example the General Data Protection Regulation (GDPR) which came into force on 25 May 2018 for any company processing the personal data of European citizens, with a notion of extra-territoriality.

It is therefore clear today that technology is no longer sufficient to protect the interests of a company or a nation, hence the need to legislate accordingly. This is certainly not THE solution, but I think it is good to sometimes consider the legal constraint as an opportunity for a company to work on Cybersecurity in a relevant way and at the highest level according to its business sector.

Beyond the legal obligation, I would add that cybersecurity is not only a necessity but also a matter of common sense to protect the company's assets and thus contribute to being perceived as a trusted partner by its customers and partners.

Thus, the White House open letter where it reminded the need for companies to adopt better standards of security makes sense, and as a security expert I fully agree to this approach.


What are the key items that remain unresolved currently and potentially for the future?

Mr Petit: I think that real international cooperation between nation-states is needed. Strengthening the links between governments, organizations working on global cybersecurity is an important step, as is the synergy between the academic sector, private industry, security companies and governments.

But the reality is quite different, we must admit. As General de Gaulle said, "Nations have no friends, they only have interests".

On a more optimistic note, and this is the reality of the situation, one of the most important challenges that partly answers the question is that it is time for the function of Chief Information Security Officer to be at last considered and recognized by the Executive Committee and HR Department as a major one within companies, and that Executive Committee take the full measure of it by providing the means to the CISO to honour the mission for which he/she was hired, by bringing him/her support and confidence.


Do you believe states and firms are doing their best to avoid these kinds of situations?

Mr Petit: It is always a case of the glass being half empty or half full. Although I am a natural optimist, I will say to remain diplomatic that the situation is very clearly perfectible.

I have the feeling that everyone looks at each other but does not see each other, everyone hears each other but does not listen to each other. And this is a widely shared feeling in the cybersecurity community.

We can always do better, for sure, maybe there should be much more interaction between States and firms. However, I think that this should also be done through a kind of appetite for communication on the part of the big leaders of industry as well as governments, which admittedly does not always work both ways.

Let us end this interview on an optimistic note. I am fortunate to be able to do a job that I have been passionate about for more than thirty years, and which, in view of technological developments, can only have exponential durability over time because it is applicable to all sectors of industry.

You know, the prism of cybersecurity has many facets.

I hereby thank Xperts Council for the opportunity to briefly share some passion.

ransomware experts ludovic petit

Part-I: The world of Ransomware - trends, recent issues & awareness


Modern day threats to organizations, states and individuals are now consistently driven through the digital world. Cybersecurity and digital threat intelligence is an ever growing topic that can be covered over a series of articles and research studies. In this blogpost, we do things a little differently with some candid but detailed conversations with Ludovic Petit, a leading expert in Cybersecurity.

Ludovic PETIT is Chief Executive Officer at JADE, a cybersecurity and business strategy consultancy. He assists companies to create a unifying and value-creating culture of digital security through consulting missions related to cybersecurity and business strategy, legal compliance on information security and through audits. Being a well-respected authority on cybersecurity and data protection, Ludovic PETIT also serves as Associate Researcher at the Research Center of the National Gendarmerie Officers Academy, Commander, Defence and Security Citizen Reserve Gendarmerie, Auditor of the High Studies Centre of the Cyberspace, member of the Board of Directors of Cyberlex, the Law and New Technologies Association and was Global Chief Information Security Officer at Altran.

We have split our conversations with Mr. Petit  into two sections. In the first part, we cover the topic of Ransomware, right from the basics to recent attacks caused by ransomware.

To empower our readers with the basics, what is Ransomware?

Mr Petit: An indication for our readers, before diving further into the subject; there are many reports presenting cybersecurity trends from all angles, but if there is one that I recommend reading it is The Global Risk Report 2021 from the World Economic Forum.

The Global Risks Landscape ranks Cyber-attacks as the 3rd most important risk... just behind pandemic and climate change risks! All is (almost) said.

Most expert firms (financial, economic, technical) around the world agree that, if it were a country, the economic weight represented by Cyber Risk would make it the third largest economy in the world, behind the United States and China.

Well, in short, Ransomware is a type of malicious software (a Malware) that is designed to hold your files or computer hostage, demanding payment for you to regain access.

Although the phenomenon of ransomware is not new, it has never been as widespread as it is today. As companies' activities are increasingly based on connected services, the fight against ransomware and more generally against malware is becoming a priority. Indeed, for a few years now, most security trend reports in the world rank Ransomware as the most frequent and impactful type of cyber-attack.


X-Force Threat Intelligence Index 2021:

ENISA Threat Landscape 2020:


Why should individuals and organizations be concerned about it now  and what does the future entail?

Mr Petit: We now live in a digital world, a cyberspace that, unlike the geography of the countries we all know, has no borders. And whatever we think, daily news shows us every day that this cyberspace has unfortunately become dangerous. Cyber-attacks are shutting down companies, with disastrous economic impacts, sometimes even in terms of jobs when a company has no choice but to file for bankruptcy following a cyber-attack, impact individuals and cities, and even countries (remember the 2007 cyber-attacks on Estonia?).

Jerome Powell, the president of the US central bank, recently said he was more concerned about the risk of a large-scale cyber-attack than a global financial crisis.

“The world is changing. And so are the risks. And I would say that the risk we are watching most is the cyber risk,” he said, adding that it is a concern shared by many governments, large private companies, especially financial companies.

The COVID pandemic increased this risk of cyber-attacks, simply because companies had to react very quickly to put in place remote working solutions, most of the time not compliant with their own information systems security policy, because the imperative of business continuity took precedence over security of use.

Many employees have also had to use their own computers at home to connect to their company's information system, and in such circumstances, the level of information security and the one of their computers' security is most of the time not the same as that of a mastered corporate computer.

As we can see, all of us are concerned by Cybersecurity.


What are the good practices to limit or avoid the risks of encountering Ransomware?

Mr Petit: There is no 100% security. On the other hand, compliance with your company's information systems security policy is obviously a fundamental step.

From a more generic point of view, common sense applies:

  • Apply system and software updates to your computer on a regular and systematic basis,
  • Update your antivirus and antimalware software, and configure your firewall to allow only legitimate applications, services, and machines,
  • Do not read emails, their attachments or click on links from chain messages, unknown senders or from a known sender, but with an unusual or empty message structure,
  • Do not install any 'hacked' application or program, or of dubious origin or reputation,
  • Avoid browsing unsafe or illegal sites (most of these sites contain malware),
  • Make regular backups of your data and system so that you can reinstall it in its original state, if necessary,
  • Do not use a user account with 'Administrator' rights/credentials (an information security classic) to check your emails or browse the internet,
  • Use sufficiently complex passwords and change them regularly.

Adherence to these few rules can already prevent many problems.

I highly recommend to browse the ANSSI website in France, as well as our German counterparts the BSI and the UK with the National Cyber Security Centre, who provide a lot of valuable advice and guidance about cybersecurity and information systems security.


It should also be noted that hacker groups are starting to build real business models of organized cybercrime. This is one of the aspects on which specialised international police and gendarmerie units are working together, in relation with InterPol (International Criminal Police Organization, and other international bodies, with, it must be said, great success and increasing efficiency.

Through Ransomware-as-a-Service (RaaS) there exists a business model that supports ‘partners’ to carry out attacks against victims, and to share the profits with the developers of the malware. In return for this arrangement, such partners or affiliates are offered a sizeable share of profits, in a relationship that appears to suit both parties based on the rise in use of such a model.

As can be seen, the world of cybercrime also has its parallel economy.

These Ransomware attacks can also be dramatic. Some hackers have no scruples.

Last September 2020 in Germany, a woman who needed urgent medical care, died after being re-routed to a hospital in the city of Wuppertal, more than 30 km away from her initial intended destination, the Düsseldorf University Hospital.

The Düsseldorf hospital was unable to receive her as it was amid dealing with a ransomware attack that hit its network and infected more than 30 internal servers on September 10.

The incident marks the first-ever reported human death indirectly caused by a ransomware attack.

The patient's death is currently being investigated by German authorities. If the ransomware attack and the hospital downtime are found to have been directly at fault for the woman's death, German police said it plans to turn their investigation into a murder case.


Recently, the Colonial Pipeline cyber-attack affected gasoline supply in the East and Southeast of the United States. What is the appraisal and cost of these attacks? 

Mr Petit: An analysis of the cyberattack on Colonial Pipeline found that the hackers were able to access the company’s network using a compromised (weak) VPN password.

The VPN login - which did not have multi-factor protections on - was unused but active at the time of the attack. So, we can see that 2 essential security rules have not been respected: low level of authentication, and weak authentication process not disabled. Unfortunately, a classic in cybersecurity.

The breach occurred April 29th, according to Mandiant, and was discovered on May 7th by a control room employee who saw the ransomware note. That prompted the company to take the pipeline offline to contain the potential threat.

About the only thing that hasn't been hurt by the hacking attack that shut down the Colonial Pipeline? The company's market value. Unbelievable, and yet true.

Indeed, if it were publicly traded, the Colonial's stock would undoubtedly have tumbled. But the 59-year-old firm is privately held, with its ownership split among five owners spread across five countries on four continents.

That said, the attack on Colonial Pipeline has had, and will have, an undeniable cost, if only to the company itself, because of the huge economic impact that resulted. Indeed, about 45% of all fuel consumed on the East Coast of the United States arrives via the Colonial Pipeline system.

The Colonial Pipeline is a strategically important pipeline system of approximately 5,500 miles in length - nearly 8,850 km - carrying petroleum products from refineries on the Gulf Coast to the north-eastern United States in the New York area. In total, the pipeline crosses 17 US states, accounting for almost 40% of the national population and about 30% of US oil consumption.

One of the first impacts was that gas stations ran out of gas. The direct economic result is therefore a loss of business for the entire network of gas stations concerned.

In direct cost terms, the hack led to a ransomware payout of $4.4 million and resulted in gas prices around $3 per gallon for the first time in several years at US gas stations. To avoid a shortage and a spike in prices at the pump, several East Coast governors have declared a state of emergency to facilitate supply.

As Americans rushed to the pumps to stock up, authorities had to take emergency measures to facilitate supply and avoid panic, but also restrictions on road transport.

According to, which tracks fuel prices and outages at gas stations, more than 9,500 gas stations were out of stock, half of them in Washington and 40% in North Carolina.

Taking such emergency measures has a cost in terms of organisation, just as seeing people rush to gas stations impacts on the business of the companies that employ them, not to mention the resulting traffic jams that have had an impact on the local economy as well.

Although we do not have precise figures, we can therefore estimate an enormous indirect cost perspective for the local economy.

Now, 2 facts which, in such circumstances, are likely to weigh heavily in the Cybersecurity balance of Colonial Pipeline:

Colonial Pipeline will have to completely overhaul the cybersecurity of its national infrastructures, which has a definite direct cost on the scale of such a company (audit, consultancy firms, equipment, and solutions, but also staff training, etc.). This will therefore have a serious impact on its financial business plan.

The second fact is perhaps even more serious: The hackers, who are part of a cybercrime gang called DarkSide, have stolen nearly 100 Gb of data out of the Alpharetta, Georgia-based company's network ahead of shutdown.

It is not yet known what exactly the stolen data contained, but as Colonial Pipeline provides an infrastructure-based service considered critical to the nation, it is highly likely that hackers focused on sensitive information such as, for instance, the company's internal operations and infrastructures.

We can consider that hackers have knowledge of the company's internal processes, which now makes the task of securing the infrastructure much more complex than it seems.

The associated costs for Colonial Pipeline will therefore have to be commensurate both with the challenges, and the stakes… and at this scale of criticality, the costs are likely to be very high.

The attack against Colonial Pipeline demonstrates the fragility of Uncle Sam about cyber-attacks. It is in this context, that the President of the United States, Joe Biden, signed on Wednesday 12 May 2021, an executive order intended to reinforce the country's security against computer attacks.

The White House wrote an open letter where it reminded the need for companies to adopt better standards of security. Thus, this will have a direct impact on the way risks are managed in companies.

Consequently, the attack on Colonial Pipeline is taking on a significant national dimension, with an impact far beyond the scope of Colonial Pipeline.


Are these attacks coming from specific regions?

Mr Petit: A complex subject which certainly deserves special attention.

Several groups of hackers which have made cyber-attacks one of their specialities, are linked or purposely used by certain nation-states that I will not name for the sake of decency.

There is a whole parallel economy in the cybercrime sphere, that's reality, and it is important to know that some of the patterns of fraud, cybercrime and attacks of all kinds carried out on a large scale, can sometimes represent the GDP of a developing country.

This is one of the reasons why it is important that the subject of Threat Intelligence is taken very seriously in companies and is an integral part of any corporate Cyber Security strategy.

There is one constant in the Underground community: the very high level of technical skills. Indeed, hackers use powerful technologies to carry out their attacks.

Therefore, it is always very complicated to have precise facts that can directly incriminate such or such attacker, or a country from where the attack could have originated, because technologies are such nowadays that it is easy to make believe in the origin of an attack. I would add that it is also easy for hackers to design malware in such a way as to make it appear that the technical 'signature' is of a known origin. This is a common practice in the underground and hacking ecosystem.

One of the rules in hacking is to erase or cover one's tracks, and to make sure that one appears for what one is not in reality. This is the cyber security expert speaking, but from a technical point of view, the rule is to never take for granted what you see or discover. You must always 'triangulate' and corroborate the facts. Say, the output remains facts, but rarely the reality of the facts.


We now wrap up part-1 of this two-part series of our cybersecurity discussions with Mr. Petit. We thank Mr. Petit for his valuable inputs to help us better understand Ransomware and the recent issues pertaining to the same. Please check out the second part of these discussions covering human and regulatory impact on  Cybersecurity Breaches.

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Interview with François Le Scornet: State of Play - Hydrogen Energy

Given the keen interest lately around Hydrogen as a clean energy source, we gathered expert insights on its application across industries, particularly in the Automotive sector. For our blog readers that stay close to the latest trends in the energy sector, we’ve got some crucial inputs from François Le SCORNET around policy implementation and also the biggest challenges Hydrogen faces as an energy source. 


François Le Scornet cumulates 15 years of international experience within the energy sector. He worked respectively for the US Department of Energy (hydrogen - fuel cells), then for AREVA (mainly nuclear, offshore wind farm, storage), and finally for GE Renewable Energy (mainly hydroelectric energy, offshore wind farm, solar and storage). Since 2016, he is President and Senior Consultant supporting sustainable energy technologies at Carbonexit Consulting. He has deep expertise in technologies and policies associated with the energy industry.


Below is our detailed interview with François Le Scornet who is actively involved in this subject as an experienced Advisor - 


Public authorities are pushing to use new sources of energy within the automotive industry with electricity and hydrogen. Is it economically sustainable by increasing the adoption rates of relying on these new energies?

François: When it comes to on-the-road mobility, hydrogen actually takes time to take off to say the least. This is particularly true for small individual cars where adoption rates remain very low despite the release of quite few Fuel Cell Electric Vehicles (FCEV) models by companies like Hyundai and Toyota in particular. Recently, many public policies pushing green hydrogen not only to decarbonize the industry but also to fuel a clean mobility sector (trucks, buses, light vehicles, infrastructures etc) are pushed in many countries and will support the development of Hydrogen-based mobility. 


What do you consider as the major differentiator(s) between Hydrogen fueled cars and electric vehicles to have a significant impact in the automotive industry? Which energy source do you see winning?

François: FCEV are certainly very quick to reload (5-10 minutes only) and are usually able to achieve longer distance than their battery-based counterpart, the Battery Electric Vehicles (BEV) if you look at it in broad terms. However, these advantages may be challenged over time and the lack of hydrogen infrastructure remains a significant issue for hydrogen fueled vehicles. For these reasons in particular, battery electric vehicles actually outcompete hydrogen-based vehicles for light vehicles and shorter distance and that should remain so. A particularly interesting segment where hydrogen may play a more significant role remains the heavy-duty vehicle segment, where hydrogen-based solutions may be competitive if the appropriate infrastructure is in place. This is also true for specific niche markets like fuel-cell powered forklifts and material-handling equipment (e.g. In ports).


Looking at the benefits and the drawbacks of Hydrogen powered vehicles - what important areas should the automotive industry focus on so as to improve adoption rates?

François: Quick to refuel and with significant autonomy, FCEV can complement BEV to achieve broad decarbonization of transport segments. In order to develop and increase FCEV customer acceptance, the automotive industry need to  leverage supporting policies and invest to propose (1) a robust green hydrogen dispensing infrastructure (2) costs reductions linked to scaling up of FCEV production (3) a broader range of model choices. But again, without significant breakthrough in electrolyzer technologies and energy storage, the most interesting segment remains the heavy-duty vehicle. Even if the adoption of green hydrogen for light vehicles may increase, the alternative BEVs remain very competitive. 


According to the International Energy Agency (IEA), hydrogen is already used in several sectors like in the oil & gas sector (oil refining), chemicals industry (ammonia production, methanol production), mining & metals (steel), etc. It could also be used in other industries like power generation. Do you think other sectors could use this energy source or are the practical applications still limited for now? What sectors do you see potential in, i.e. for further investments into Hydrogen as an energy source?

François: Green hydrogen should be directed towards sectors where no alternatives to decarbonize are available like industrial uses and energy storage. Hydrogen is widely used in the industry today but this hydrogen is quasi exclusively produced from fossil fuel, in particular through steam methane reforming. This is the so-called grey hydrogen. The main challenges for these sectors, In order to fight climate change, is to replace this grey hydrogen by hydrogen produced from alternative low-carbon processes, in particular from water electrolysis using low-carbon electricity from renewable energy. This way, it can decarbonize the sectors traditionally using grey hydrogen from fossil origin: oil refining, ammonia production, steel-making in particular. In addition, Green hydrogen may be more broadly adopted in specific markets to decarbonize residential and commercial heating systems relying on expensive natural gas. However, technical challenges associated with the capacity of the network to handle significant percentage of hydrogen remain unsolved today.


For a clean and widespread use of Hydrogen in global energy transitions - what do you consider the most important and immediate challenges to tackle?

François: The bigger challenge around adoption of green hydrogen, either to replace grey hydrogen or to be used in new applications, is clearly its high cost. Even if electrolyzer costs and renewable energy costs will most probably continue to decline. The expected increase in CO2 costs will also favor its competitiveness comparatively to grey hydrogen and blue hydrogen (grey hydrogen + carbon capture). 


From a regulatory and policy perspective, what are the governments and authorities doing to simplify the adoption of Hydrogen as a reliable sustainable energy source? Could you please share your inputs regarding European countries/governments?

François: Incentive schemes can be used to kick-off the installation, drive demand and allow for scaling-up plants, ultimately leading to cost decrease and first successful use cases for green hydrogen. Many countries have been releasing their hydrogen strategy over the last few years, e.g. in Japan, Australian. At the EU level, many countries have adopted explicit hydrogen-related objectives.

At EU level, In 2020, the EU hydrogen strategy was adopted in order to accelerate the development of clean hydrogen, which will play an important part in the European Green Deal for instance, and specific objectives and timelines have been released. Specific forum like the European Clean Hydrogen Alliance, which brings together public authorities, industry, and civil society aims to coordinate investments. 


Reports from last year state that China, Morocco and Chile seem well placed as the leading countries for Hydrogen-Production. Could you further elaborate on why this is the case? What type of industry sectors are adopting this energy source and why?

François: The cost of producing low-carbon "Green" hydrogen through electrolysis is linked mainly to the price of the electrolyzer (CAPEX) and the price of low-carbon electricity (for OPEX). Countries with high solar and wind potential typically are therefore well positioned to produce green hydrogen at a lower cost comparatively with other countries for a given electrolyzer investment. This is the case for Morocco or Chile. In other cases, the main driver is a supporting policy to both renewable energy development and local hydrogen demand at the same time. This is the case in China for instance which support strongly the production of FCEVs.


Which other countries / regions do you see having major potential in Hydrogen production? Can you give examples from both developed as well as emerging economies?

François: EU, Australia, Japan and Saudi Arabia 


We would like to sincerely thank François for his valuable time to speak with us about this subject. Should there be an interest in leveraging expert insights on any of your studies pertaining to Hydrogen energy or clean energy transitions, please get in touch with us at Xperts Council.

lucas bertrand production hydrogen expert

Hydrogen Energy - Production & Storage by Lucas Bertrand, ITM Power

In this blog post we continue to learn more about Hydrogen as an energy vector source but more specifically in terms of its production and storage requirements. To empower us with the right knowledge and fundamentals on this subject around Hydrogen, we spoke with Lucas BERTRAND who currently leads the Business Development activities across France, Benelux, Iberia and Italy for ITM Power – a leading manufacturer of Hydrogen Energy Systems for Energy Storage and Clean Fuel production.



Lucas Bertrand is ESSEC MBA graduated and has 30 years of Business Development expertise in renewable energy & portable power. He has worked in the hydrogen business for 13 years with ITM Power recently and with Areva Renewable prior to that. Formerly, for close to 11 years he was overseeing the OEM Business across Europe at Duracell.


To begin with, it is important to understand the basic concepts associated with Hydrogen. Being one of the lightest and most abundant elements in the universe, hydrogen’s natural form on earth is typically found in combination with other elements (in water –H2O, natural gas (CH4), or other fossil compositions (CH-XX). Keeping aside today’s conventional methods for Hydrogen production, we will specifically focus on Electrolysis - a mature technology that consists in generating the molecules of hydrogen through an electrochemical reaction using electric current. In particular, water electrolysis has gained momentum over the last decade as the ideal way to produce hydrogen via a clean process: When using renewable electricity, the splitting of water molecules (H2O) generates oxygen (O2) and clean & green hydrogen (H2) with zero carbon footprint, compared to the heavy carbon footprint of conventional fossil production methods. This technology can be used to participate in the Energy Transition and decarbonize industry, transport, and heating networks.

According to Lucas, the emergence of water electrolysis is ramping up in various market sectors: Mobility, Industry and also the storage of renewable energy. This is primarily driven by the following factors - (i) the need to store growing intermittent renewable energies, (ii) EU regulations (2021-2030 plans) now need to be transposed into national policies (RED II on E-fuels, and ETS IV on CO2 emission reduction targets), and (iii) the decreasing cost of renewable electricity.

One of the fundamental issues surrounding the production of decarbonized hydrogen is its storage. Hydrogen is difficult to store due to its very low volumetric energy density (2700 times less energy dense than gasoline). Any micro leak can dissipate stored hydrogen very quickly. We asked Lucas to give his inputs on the typical steps currently being considered to improve the storage of hydrogen. He states, “Compression and Liquefaction are the most common ways to reduce Hydrogen footprint. Compressed or liquid hydrogen can be stored today in large tanks made of steel (Type I & II) or composite (Type IV), the latter being light enough to be used on board vehicle for instance. Today, improved compression technologies with better efficiency are deployed: this is the case for instance of ionic compression, a technology developed by Linde Gas, the worldwide #1 leader in industrial gas, with an electrical consumption reduction by minimum 30% vs conventional diaphragm compressors.

There is some development on Hydride based storage in a solid form, but clearly, it is still in low TRL maturity at present. Of course, compression, and to a greater extent liquefaction (~30% energy loss) require a significant amount of energy. This needs to be taken into account when we calculate the “well to wheel” levelized cost of Hydrogen. This is why it is essential to get a cheap electricity to produce electrolytic hydrogen.

The current move towards large scale hydrogen production, combined with the necessity to transport it from sunny or windy regions - where it is produced-, towards the geographical regions where it will be consumed, requires large transport and storing infrastructure: this can be done through on the one hand, large pipeline networks that exist today but will widely expand  across all Europe (eg.BackBone H2 project), and on the other hand, Salt Caverns that can store millions tons of hydrogen for long periods”.

Lucas further speaks about the future trends & current standards of storage options. Particularly for on board storage in the mobility sector, composite vessels type III and type IV are currently being developed in increased sizes (from 40 liter to 100 liter+) - these of course are lighter and the costs are effectively going down as well. On the automotive side of things, in particular for heavy mobility (bus, trucks), increased pressure for Fuel Cell Electric Vehicles (FCEV) tanks from 350 bar to 700 bar allows to embark more hydrogen for more kilometres driven. He also states that development of high pressure logistic tube trailers, to transport gas by road, should come in handy in the future as well (from 200 bar to 300-350 bar). Mobile containerized solutions up to 500 bar are currently in development, which could enable to transport larger quantities of H2 on a single trip, but also could possibly eliminate several stages of compression at the refuelling station site.

Hydrogen Mobility started with passenger cars. Most car OEMs announced hydrogen car introduction in their product line (with the exception of Volkswagen and Mercedes) but this segment will remain small for quite a while, compared to the Heavy Duty Vehicles (HDV) like trucks or buses. Indeed, the Fuel cell passenger car market will take time to become a mass market, unless local incentive policies boost the car prices to become more affordable. Quoting Lucas, “we are in a ‘chicken and egg’ situation where car OEMs blame the infrastructure providers not to be widely enough developed, whereas the Refuelling station operators are discouraged to invest in an infrastructure that is barely used, by lack of vehicle. This is the situation in Germany where about 100 Refuelling stations have been deployed thanks to large subsidy programs, for less than 1000 Fuel Cell cars on the road.  Whereas buses or trucks consume more hydrogen, hence an infrastructure can reach a break even with less vehicles: A 1ton/day Hydrogen Refuelling station would refuel 25 buses; it would require a minimum of 250 passenger cars to get amortized. I envision thus the passenger car market to stay quite a niche, at least for now, whereas heavy duty vehicles projects are growing in number: “1000-bus” project in France for public transport (by 2022), Trucks for logistics (by 2023), followed by Trains (by 2025), and eventually boats and airplanes - not necessarily using direct hydrogen, but combining renewable hydrogen with CO2 to generate bio kerosene (by 2030).”

The current development in Europe of Green hydrogen is ambitious and is now supported by public investment programs: While hydrogen share in European energy production is minimum today, Brussels has set the goal of increasing hydrogen to 12 or 14% of the energy mix by 2050, with a staged approach ramping from 6GW electrolyser capacity in 2024 to 40GW by 2030. Associated investment would be between 180 and 470 billion euros by 2050. “In France, The French Economy Recovery Plan includes an ambitious hydrogen plan with a 7-billion€ state investment dedicated to green Hydrogen, mainly through water electrolysis, with targets to deploy 6GW electrolysis”, said Lucas.

Moving on to the business side of things, we requested Lucas to elaborate on the market and business opportunities in the storage of hydrogen and understand which industry sectors are currently struggling on this front. Lucas clearly outlines that “Hydrogen Mobility is one important & growing segment, like stationary home use power-to-power applications, by transforming electricity into hydrogen (electrolyser) and then back to power (using a fuel cell) or by injecting green hydrogen in natural gas networks for heat building. But these 2 market segments will remain quite small in the short term, compared to the potential of hydrogen as feedstock in industrial processes, or Hydrogen as a renewable energy storage vector. For long storage options, Hydrogen will definitely be economically the most viable option for large-scale storage solutions. However, projects will need to move to larger scale as it is today, to reach 100 MW, or even GW scale. ”Hydrogen as a renewable energy storage vector is key as it supports renewable energies penetration in the Energy mix. Renewable energies are by essence intermittent, difficult to predict. Therefore, having more than 30% renewable energy in the Energy mix, makes it complex for the power grid to easily integrate such unpredictable power sources. Lucas states, “Large concentration of Renewable Energy sources (RES) countries like Denmark (36% via Wind energy) are also the largest CO2 emitters, as they need to complement their mix with coal or gas-power plants to mitigate RES shortfall. An alternative to this is to deploy large-scale Electrolysis plants to operate during off-peak periods when excess wind power is there and being able to stop during peak-power consumption times. Today’s large-scale electrolysis project opportunities in the North of Europe are announced but are still in the nascent stages, looking for grant funding schemes to secure investment for further development.”

On the other hand, the Industrial sector will be a large contributor to the deployment of Green Hydrogen. The industrial sector has long been a preserved sector for gas companies, selling their Hydrogen generated at cheap cost, but with a heavy carbon footprint (11kg CO2 emission per kg of H2 generated) – using steam methane reformers (SMR). Refineries, Steel, Ammonia for fertilizers, are some of the segments that typically used SMRs on site to produce large quantities of Hydrogen. Therefore, given the need to decarbonise transports industry and heating networks, SMRs are to be replaced with electrolysers.  Lucas highlights some recent examples in this space - “First large scale industrial demonstrators are in process of being deployed: (i) Refinery: Shell Wesseling Refinery (Germany) has deployed a 10 MW PEM electrolyser by ITM Power in 2020 and planning a 100MW extension; (ii) Chemicals: Linde Gas will install in Leuna Petro Chemical Complex (Germany) a 24MW PEM Electrolyser (ITM Power) in 2022. Additionally, Nouryon (Akzo Nobel) is designing a 20MW Electrolyser project in Delftzijl (Netherlands), (iii) Steel: ArcelorMittal is looking at producing green steel using green Hydrogen via electrolysis.”

To wrap up this insightful discussion with Lucas, we closely looked into Hydrogen making its in-roads into the transportation industry. We enquired about the significant changes needed in the transportation sector (railways, trucks, buses, shipping, aircrafts) in order to adopt hydrogen energy systems. According to Lucas, it will be “a combination of (i) increasing green electricity use, (i) larger scale fleet projects (transport), (iii) gigafactory industrialization- manufacturability, and (iv) subsidies schemes”. He clearly outlines that hydrogen would get faster deployment if we were to stop subsidizing conventional fossil fuels (Diesel), to enforce heavier taxes on CO2 emission in the transportation sector, i.e. constraints on polluting users and incentivize decarbonized transport. Massive grant funding schemes for hydrogen projects, both at EU and National levels, have been announced to support both the emergence of zero carbon technologies, and industrialisation of Green Hydrogen manufacturing capacities, i.e. giga factories to address 100 MW+ electrolysers, - like the 1000MW factory ITM Power recently opened last December 2020, and that other electrolyser providers will be deploying in a few years’ time-.

Given the latest developments of SNCF Voyageurs ordering the first hydrogen trains in France, we asked Lucas for his inputs on what is currently holding back this transition to Hydrogen trains across the broader European railways. Lucas comments, “Hydrogen Fuel Cell trains are foreseeable on railway lines which aren’t electrified yet.  It becomes a valuable decarbonized alternative to diesel trains, and cheaper than electric powered trains, as the cost of an electrification line is ~1M€+/km. But one train is “only” consuming 200 to 400 kg of hydrogen per day (approx). Therefore, there is a need for several fuel cell powered trains to enable an economically viable project. There is also a need to deploy a large infrastructure network along the train lines. The solution is to include trains hydrogen refuelling infrastructure in a full regional hydrogen ecosystem, mutualizing it together with other mobility or industrial requirements of Hydrogen.”


We would like to thank Lucas Bertrand for his precious time and guidance on this matter around Hydrogen production and storage systems. We hope you found these inputs useful as well.

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Interviews with French Real Estate Experts

The real estate sector has had a significant impact with the ongoing pandemic. To better understand the developments & how things are expected to unfold in France and broader Europe, we interviewed our top French real estate experts. We sincerely appreciate their time and consideration during these interviews.



Mr Henry Buzy-Cazaux, has spent more than 30 years within the real estate sector. He is the founder president of the Real Estate Services Management Institute, one of the main training institution for real estate professions.




Mr Frédéric Monssu is the former Managing Director of Guy Hoquet L’Immobilier and Private Real Estate Services Managing Director of Nexity. He is now Vice President of AT-Ypique, a company which helps its clients to improve their commercial performances.



How is the real estate market in France currently performing? Are there any key trends to watch out for?

Mr. Buzy-Cazaux: “The residential real estate market in France should be analyzed by distinguishing between new and existing. Construction is currently experiencing its worst crisis since the last 30 years. In 2020, production did not exceed 376,000 housing units and barely more than 300,000 are expected in 2021, for needs estimated at a minimum of 450,000. This is due to a decrease in housing assistance of €4.3 billion in two years, degraded relations between the State and the Mayors (who are responsible for issuing building permits), Municipal Elections that have frozen projects, difficulty of acquiring land at a controlled price, instability of town planning rules and the slowness of the process for examining permit applications are the main obstacles. COVID-crisis has also raised the cost of construction sites and slowed down their execution.

In existing housing, after good market resistance in 2020, 2021 is already down 20% as the first quarter ends. Prices have stalled in the big cities and their near peripheries. Medium-sized cities are of much greater interest to households than before, with a desire for an improved quality of life and the possibility of remote working among individuals.”

Mr. Monssu: “It is commonly said that the criteria that make the real estate market more fluid are access to financing, jobs, and the French confidence index. The first 2 months of 2021 witnessed low interest rates, economic growth expected at + 5%, demand that remains strong and a lack of supply that is felt among transaction professionals (sellers probably waiting for better days to sell at the best price). In summary, the indicators seem to bode well, however, the decisions taken by the Banque de France to relax the conditions for granting loans may be a warning sign for a market that risks getting tougher. The impact of the health crisis, the economic and social crisis, which has not yet been measured, all the effects are amounting to uncertainties that do not facilitate the readability of the market. With economic and social fractures widening, many real estate projects could be abandoned or postponed. After health, the priority that remains more than ever is the prospect of employment and purchasing power. While the creditworthiness of buyers is the key criteria, trust remains one of the essential engines of the real estate sector.”


Looking at broader Europe, are the real estate trends similar in other European countries?

Mr. Buzy-Cazaux: “The other European countries are experiencing the same slowdown in the activity of resale of existing homes, or even steeper declines, especially those which have not safeguarded the purchasing power of households with powerful aid as France has. In contrast, most of these countries have better land use planning, and prices are more affordable in relation to household incomes. Finally, in European countries with economies comparable to France, new construction is more dynamic and responds correctly to the needs for renewal of the stock and to replenish it according to the needs created by sociological changes.”

Mr. Monssu: “The crisis has clearly changed buying and selling behavior in some European countries, as well as the support policy of central banks. However, due to my lack of deep knowledge of real estate in other European countries, I cannot give an informed opinion on the latest trends. I simply note that despite the crisis, Paris remains one of the most expensive capitals in Europe and France continues to stay ahead of European countries for the creation of new housing, two indicators which for me seem to represent the dynamics and the attractiveness of a country's real estate market.”



What were the consequences of the pandemic on the real estate market in France?

Mr. Buzy-Cazaux: “The pandemic first interrupted all construction and marketing activity. A small number of transactions took place digitally, partially for new homes and exclusively in the case of rentals. Activity was then able to resume, both on site and in agencies at the cost of strict health protocols. This significantly increased production costs, around 10%. This additional cost partly impacted the players' margins, but it typically passed on to the end customer. During the first months of the pandemic, the French undoubtedly saw the housing project as a way to preempt the future and to fight against the health abatement. In recent months, there has been the desire to invest and no doubt also the fear of a deterioration in individual situations that has left concerns in people's minds. More positively, the French are rethinking their relationship to work via teleworking, which before the crisis represented 8% jobs but now constitute close to 20% & is growing. They are also changing their outlook on housing, aspiring to a location that guarantees a greater quality of life, particularly in medium-sized regional towns and rural areas, with greenery and clarity, and an office.”

Mr. Monssu: “The health crisis is not having the same effects for all real estate professionals and buyers across various regions in France. The lockdown and the introduction of teleworking have had an impact on the selection criteria sought by buyers. New requests have arisen, such as: the search for more space, more light, but also the quest for a house with a garden. Paris experienced a decline in the number of transactions to the benefit of the Ile-de-France region and in particular the single-family home market. Regarding real estate professionals, there has been a significant increase in the number of independent agents, which has been linear for several years (on average +5000 agents / year), and whose number literally exploded in 2020 with nearly 40,500 agents. The explosion of this mode of distribution is certainly the result of the successive lockdowns which did not allow traditional agencies to be open but also digital networks such as Capifrance, IAD, Optimhome, etc.. which have facilitated the remote management of their agents and end customers. The so-called traditional real estate agencies which are estimated at nearly 27,400 at the end of 2019 (of which 93% have less than ten employees), suffered from forced closures, partial unemployment of their staff and also for the lack of digital tools (CRM, digitalized customer journey, electronic signatures,etc.) - making it impossible to manage "remote" relationships.”


The market share of agent networks in France is on the rise, in what ways can the major players differentiate themselves today?

Mr. Buzy-Cazaux: “We witnessed a high birth rate for agencies between 2017 and 2020, now numbering 300,000. At the same time, the model of agent networks is in fact actively developing and the fundraising of the French player (IAD) and other international leaders in this space, clearly outlines that economic observers and investors consider it promising. The growth rates of the top 5 players are between 15% and 30% per year, and this conquest is 2/3 in the over-the-counter market and 1/3 in the agency market.

The time for differentiation, after fifteen years of existence in France, has come for these players, for two reasons. They are first engaged in a merciless competition to attract advisers, who choose a particular brand. These advisers must then gain the trust of owner-sellers, or even lessors for rentals, if they want to have a sufficient portfolio. Brands are being built which use mass media, such as television, with considerable investments. IAD’s pyramid organization is not that of Keller Williams, halfway between agency and network, nor that of Safti. Package offers for sales agents are being refined, with training being at the heart of differentiation, such as digital tools. In this regard, these players have understood that they need to have marked technological advancements in this area, while traditional agencies are reforming digitally, in particular within large franchise networks.

Despite this differentiation at work, it cannot be denied that certain networks of agents will not succeed in standing out and will have increasing difficulties in asserting themselves on their territory against the leaders. The consolidation will obviously continue and the most large networks are now buying, external growth is also a growth accelerator for this model.”

Mr. Monssu: “In the world of real estate transactions, the latest major innovation dates back to the replacement of paper advertisements by online advertisements. The advent of data, algorithms, the acceleration of the digitization of processes and support could effectively once again create disruptions or at least "changes of focus" in the current operating methods of the major players. For example, the arrival of 100% online agencies offer their clients the same services as traditional agencies but with a fixed commission. Thus, the commissions or fixed prices of these new distributors of real estate services range from 2,590 euros to 1.99% of the sale price. Polls show that 65% of respondents find agency fees too expensive. In fact, 70% of French people try to sell their home themselves, but only 30% manage to do so, 5% of which with the help of their notary. The expectation of new commercial approaches therefore remains strong on the customer side, which leaves room for the search for differentiation. In addition to these new distributors of 100% online and "à la carte" services, there is a new breed service offer by ‘iBuyers’. The service here involves the seller providing details of the property he/she wishes to sell (online form), a price is offered immediately, the seller can accept or refuse it. If the offer to purchase is accepted, an expert will come on site to validate the information provided by the seller, and possibly complete the description of the property. Like Aramis in the automotive sector, the iBuyer will relist the property on the market with its distribution margin linked to marketing costs and above all to financial risks.”


Some companies have succeeded in distinguishing themselves thanks to their technological contribution, particularly in data management. Do you think this is the future of real estate? How could real estate develop further in the future?

Mr. Buzy-Cazaux: “To date, we have to be honest in recognizing that the digital technological advancement of proxy networks is insufficient and it is obviously in the area of ​​data mining that the fight must be waged. This work has barely begun. For example, in real estate, as in most other commercial sectors, we do not yet have the means to anticipate household purchasing trends, or the nature of their choices, which are often poorly expressed and subject to a very rudimentary form of customer discovery. Google is working on this data to catalyze the data processing efforts for real estate players. That said, GDPR compliance continues to remain paramount. In France, Seloger is today the largest producer of information on the real estate market and publishes thematic studies and detailed analyzes every week. This is potentially due to Google having developed high-level skills in the analysis of data relating to housing and household expectations, with a dedicated service created in Paris.”

Mr. Monssu: “Referring to the iBuyer concept mentioned earlier, this technique, born in the USA, has seen real estate players pivot on their model to provide this new service to their customers. For example, Zillow, a price estimation site and major portal across the Atlantic, became iBuyers in 2018. In France the Digit Re group has completed its range of services for independent agents by launching Dili, its brand of iBuyer. Moreover, in this country other evolutions can come from other players such as for example the Axel Springer groups (Logic immo, Se loger, MeillAgents) or Le Bon coin (acquisition of AVendre_A rent) which own a good part of the chain that allows to put a seller and a buyer in touch without going through the relationship of an intermediary. There, isn't the future of real estate in the age of disintermediation, just like many other industries? However, I personally believe that the distribution methods of tomorrow will be the points of convergence between a digital relationship initiated by the customer and a physical relationship with high added value. Digital is not an end in itself, it is a great opportunity to reposition people at the heart of the relationship. All the social systems developed and run by companies will aim to equip themselves with influencers and contributors on the net, allies to whom we give access to the knowledge base and who over time become ambassadors for the brand.”



What type of consolidations are possible in the coming months, within French real estate market?

Mr. Buzy-Cazaux: “Consolidations will most likely take place during 2021, not only targeting mid-size players in the transaction, but also with the buyout of leading operators. This movement will concern agent networks, but also real estate franchises. In this part of the real estate universe, consolidation began in the preservation of brands, with the takeover by Arche, the holding company of the Citya group, Guy Hoquet and Laforêt Immobilier. Another large-scale operation is expected to follow very soon.”

Mr. Monssu: “With more than 40,500 agents, France currently has more than 150 agent networks, of which the top 10 networks alone account for 50% of the number of agents. For controlled organization, the development of these networks will have to go through a necessary phase of network consolidation. This new model of distribution was first born in 2006 and on average these networks are about 7 years old. Therefore, this model is not yet mature and is yet to be perfect in its professionalism, its organization and its legitimacy. This optimization of the business will be supported by the resources provided during network consolidations.”

Florent Couty expert digital network

Digital Networks & Tech Enablement in Real Estate

Over the past few months, we’ve seen significant developments across real estate tech companies and digital real estate networks in Europe. The two standout developments include IAD Group securing over €300m in investment from Insight Partners and eXp Realty expanding its presence into France and Italy.

To better understand these trends and how this space is shaping up, we had an insightful discussion with Florent Couty, a leading expert with 20 years of experience in digital transformations, new technologies and information systems. Florent is currently the CEO of Alpha Vista, a consulting company specialized in digital and organizational transformation. Previously, he served as Chief Innovation and Product Officer at IaD International.

Florent feels that digital networks of real estate independent agents, which are mostly based on a Multi-Level Marketing (MLM) or via a sponsorship scheme, are enjoying a strong growth in France and are starting to prove their worth in broader Europe as well. He also states, “Despite the obstacles raised at the beginning by the traditional real estate industry, IaD has demonstrated that entrepreneurship, adapted fees and a fair distribution of profits was possible. Of course, the latest fundraising reinforces its European leader position and could set new operations within the industry.”

To dig deeper into the tech and operational side of this space, we asked Florent to help us understand the main aspects around building & running such information systems. At the outset, he emphasizes on the essentials, i.e. business introducer tools, CRM system with shared database, integrated transaction systems, electronic signatures, and if possible mobile application or a web ERP platform, supported by high availability environments. He also highlights that once the business reaches a certain size, Process Automation plays a critical role, i.e. from lead collection to the sale through invoicing or property advertisement diffusion. Lastly, the User Experience is vital in order to optimize transformation rate and productivity, this includes digitalization, intuitive user interfaces, etc… Furthermore, Florent concludes - “There are mechanisms that enable sharing and leveraging MLM (business, sponsorship, agents mobility) for a unique and fluid experience of running the business, including crossed offers/demands matching system, consolidated turnover follow-up in real time, adviser orientation and e-learning integration, Key Performance Indicators (KPI) for real estate managers, and the analysis of internal and external data to support an effective growth strategy.”

Speaking on the impact these tech enabled businesses would have on traditional real estate agencies, Florent says - “The competition and market shares won by real estate digital networks will push traditional agencies to evolve to stay in the race. They will have to succeed in gradually lowering their fees for equivalent service, either by grouping together in shared business centers or in larger branches to reduce fixed costs. However, as trust and reputation are key in the decision-making of sellers, it is possible that well-established historical players will eventually survive in this competitive landscape.” According to Florent, data plays a key role in the digital real estate space so as to be more efficient in terms of performance and development. He also believes that at the moment, execution around lead acquisition isn’t fully developed. However, when the competition gets tougher, these systems would have the advantage to reduce fees while supporting consultant activity because they will combine capabilities of the low-cost system for online automatic mandate taking and real estate agents covering the country. “What is certain is that once balance has been found among private sells, traditional real estate agencies and agent networks, the ecosystem will concentrate and become even more competitive because MLM networks are essentially based on the promise of growth to recruit and will have to find other strategies (individual performance, acquisitions or international) to continue their development”, says Florent.



Upon asking Florent to evaluate the chances of new players arriving in this market and dominating the market, we learnt that he is quite doubtful of the same. He notes that some attempts were already made in the past without success. Without a thoughtful strategy concerning development and competitive remunerations, it will be difficult to catch up to the current leaders which are benefiting from huge effects of scale. Moreover, it is a bit soon to consider possible consolidations in this market during the coming months in France or abroad. According to Florent, acquisitions will become a profitable solution in a few years when structural growth in market share will arrive at the inflection point.

To wrap up this discussion, we got Florent Couty’s concluding thoughts on how this space is evolving - “Many networks are now doing MLM, even without outrightly saying it. It is a fundamental trend. Compensation for business input and a culture of business sharing will also become a must. Finally, the technical and functional devices which will improve the productivity of agents and contribute to the timely service of clients, fully support the leverage effects of MLM. Fortunately for the market and for customers, there are many opportunities to improve the professional functions of this space, given that the digital disruption took place only a decade ago”.

We thank Florent Couty for his valuable time and inputs for this discussion. 

ESG investments experts

Current outlook and future of ESG investments

In recent years, the Environmental, Social and Governance (ESG) criteria has gained momentum among investors. With the ESG-based investment market set to double in 2021 & an additional 17 percent of investors planning to move to ESG in 2022 or later, the potential is clear for the market to grow in the coming years. To better understand these trends and how ESG investments are expected to develop, we spoke to Niall O'Shea


Niall has over 20 years of experience in the forefront of Sustainable and Responsible Investment. He previously led the division for Responsible Investment at Royal London Asset ManagementCurrently he leads his own venture, Discern Sustainability, specialising in ESG expertise for the world’s leading investors, corporate social responsibility organizations and environmental consultancies.


Given these upbeat trends in the market, investors believe now ESG issues are potentially material, as evidence is finding that smart ESG approaches tend to be additive to investment returns. The creation of new funds, indices and structures has enabled asset owners to allocate to different flavours of ESG across asset classes. Niall also adds, “Policy has been highly supportive and is now producing regulation, such as the EU Sustainable Finance Reporting Directive (SFDR). The biggest theme of all that will continue to drive risk and opportunity are sustainability challenges we face, that have gone from being seen as ignorable externalities to boardroom priorities”. From a geographical standpoint, we learnt from Niall that Europe has had the biggest impact with ESG investments. Reports suggest that Europe continues to lead, forecasting between two-to-four times growth in AUM in broad ESG styles, by 2025. Estimates from the US for broad ESG approaches are around $18 trillion, growing very strongly but this size reflects more the innate size of its market. For the APAC region, Japan is still growing strongly but Asia is still slow on uptake, with Australia and New Zealand more Europe-like in their approach.



There has always been concerns related to inconsistencies around ESG data from private markets vs public assets. We got some interesting comments from Niall on the same - “The data sets, choices and metrics for public markets are far more advanced and there is a prize for those that can ‘crack’ the private markets conundrum; which is to the extent that such data exists at all, it is not freely shared or commoditized. For investors in real assets, for example, some vendors are using combinations of remote sensing, big data and AI to assess, for example, the optimal places to put wind farms or assessing the physical vulnerability to climate change under different modelling assumptions. Prominent benchmarks like GRESB (Global Real Estate Sustainability Benchmark) are generating data and learning experiences that will eventually permeate the wider market.” Speaking of benchmarking, new measurements for ESG accountability are being considered lately. According to Niall, benchmarking has its uses in providing a desired objectivity to measurement and the visibility of progress or lack of. “When we mention benchmarking, we should think too in terms of regulatory developments like the low-carbon and Paris-aligned benchmarks being developed by the EU as part of the wider drive to bring scrutiny to what is being claimed by investors and companies”, says Niall. He also states that keeping benchmarks lean and focussed rather than platinum-plated, and learning from unintended effects is important to their usefulness and credibility. The regulatory impact on ESG-based investments is something to take into account as well. From March 2020, in-scope investors marketing funds into Europe will have to embark on a disclosure regime that will result in them tying their funds to particular minimum definitions of ESG integration, or sustainability objectives being core purposes of those funds, if applicable. The EU Taxonomy is the de facto look-up for precisely what economic activities the EU regards as making a ‘substantial contribution’ to the bloc’s environmental sustainability objectives. In addition to these inputs, Niall also says, “Investors seeking to make any claims for a fund’s environmental sustainability will have to state to what extent and how the Taxonomy was used to calculate the percentage of underlying revenues and capex that is ‘inside’ the taxonomy i.e. green. The US SEC is taking a keen interest in the SFDR development. We are in the sunset of the free-for-all era with no standards or accountability. I welcome this, even if regulation will inevitably have some unintended effects or fall short of its objectives.”



Lately, there has also been consistent talk around an ESG Bubble forming and questions like - can ESG investments provide a win-win scenario where they can help save the planet while netting positive returns? To learn more about this, we got Niall to share his candid views -

“There is a strong body of empirical evidence that inflecting ESG in how investments are selected and managed in equities produces better and more resilient long-term risk adjusted returns. Roughly three quarters of the studies we found support that view, but based only on the asset class for which there is the deepest dataset – equities. For other asset classes like fixed income and infrastructure, there is at least no evidence for financial harm from such strategies but the jury remains out on out-performance while the dataset remains spotty. However, surveys of institutional investors repeatedly show sentiment ‘spreads’ from the experience of equities. It is generally accepted that a security or asset with good ESG performance is, all other things being equal, a better, safer investment-and it is hard to dissent from this intuitive case. With this said, I do not subscribe to the view that ESG axiomatically leads to outperformance. A good ESG strategy will make a sound investment approach better, but it will not rescue a poor one. There are no magic bullets in investment and those who present ESG shallowly as some sort of set-and-forget formula for success, whether out of naivety or opportunism do harm. Unfortunately, there is a risk of a bubble Fear-of-Missing-Out and the ESG arms race means that inevitably lots of sub-par strategies that wear the cloak of ESG will go on to underperform. Then, there are those who say with some justification that some popular ESG assets are being bid up wildly higher than what their fundamental valuation would support. The counter-argument is that those valuations merely reflect confidence in a world that is going to be transformed by the sustainability imperative in a way that markets have failed to price in. While there is a risk of a bubble, I am sanguine about the longer-term picture in that once some of this froth is driven out of the market and a correction takes place, the fundamental drivers I speak of will still be there, but stronger.” 

To conclude this insightful interview with Niall, we asked him - to what extent does he see ESG-focused companies lead the post-COVID economic recovery?"This is a popular talking point but I am somewhat agnostic. COVID revealed our vulnerability and perhaps a partial preview of much worse down the line with climate if we do not act, as well as highlighting social inequalities. But people have short memories and a desire to consume. I think the bigger theme here is the further dematerialisation of the working world and supply chains and the normalisation of the duality of life: physical presence giving way to digital and remote delivery where possible, and that these distinctions will be increasingly blurred. It is true that companies popular in ESG funds: tech, pharma, new energy, are expected to benefit”, says Niall

We sincerely thank Niall for his time and valuable inputs on this topic related to ESG investments. We are confident that our readers will benefit from his insights provided here.