‘Drill, baby, drill’ not an option for Europe, says fund firm

It is too late for geopolitical challenges to stall environmental, social and governance (ESG) investing, says Christophe Bonnat of investment firm Marguerite, even though responsible investing faces popular and industry backlash.

Marguerite launches funds, compiles investor capital, and then uses it to help fund infrastructure projects that prioritise the environment, society and good governance, as well as financial returns. The company, founded 15 years ago, has a team of around 30, with offices in Luxembourg, Paris and Milan. It has assets under management worth around €2 billion, with funds committed mostly by institutional investors from the public and private sectors.

“We are supposed to invest only in companies and projects which are aligned with the goals of the Paris Agreement. This is why it’s paramount for us to make sure that we understand the ESG and sustainability angle of the potential companies that we will invest in,” the portfolio director and head of ESG told the Luxembourg Times in an interview.

The concept of ethical investment is not a new one. Terms like CSR (corporate social responsibility), the triple bottom line and corporate citizenship have fallen into and out of fashion over the years. To some extent ESG is just the latest buzzword for an ongoing trend.

“CSR was a little bit more on a social point of view […] and ESG today is a bit wider, and it clearly includes much more about the environment than it used to be, And especially about climate change,” explained Bonnat. The governance part, he added, is about transparency of decision-making.

Arguably, the most transparent decision-making is to prioritise profit above all else and to leave ethics by the wayside; the so-called “drill, baby, drill” philosophy embraced by some politicians and business leaders.

“‘Drill, baby, drill’ works for people who have oil to drill. In Europe, we are a net importer. So [it] would mean more dependency on the countries who provide the fossil fuel. So, on the contrary, ‘drill, baby, drill’ is not a positive aspect for the European economy,” said Bonnat.

The EU’s Draghi Report last year highlighted that Europe is more expensive than many places in the world, and that loosening environmental protections would not automatically increase competitiveness.

Europe’s high wages and social protections, combined with its very limited fossil fuel reserves, mean the future of its energy security is necessarily in renewables and nuclear, Bonnat paraphrases. “If we invest enough money, if we do sufficient R&D, if we invest sufficiently in factories in order to produce our own equipment used for renewables, then Europe can become competitive even in terms of energy.”

The aquaculture industry is environmentally controversial, but Norwegian firm AQS is working to decarbonise it using battery powered support vessels. © Photo credit: AQS

The backlash

ESG isn’t dead, but it’s under pressure – and not just outside Europe. Since the Paris Agreement at COP21 in 2015, Europe has led the global charge on carbon cuts and the green transition. That leadership is real, even if climate scientists and environmental NGOs argue it is still too slow to meet the urgency of the crisis.

“We have seldom seen such fast adaptation on a market of the importance of the energy market. And you see that many people today say that we are going too fast, we’re pouring too much money into decarbonising the economy,” Bonnat said. “A lot of political parties are now taking this as an argument to gain some votes, because they feel that there is part of the society which do not agree with that.”

Regardless of populist successes at the ballot box, however, Bonnat hopes they are too late. Technologies like wind and solar would not have taken off as successfully without public funding and incentives, he said. Now they produce cheaper energy than fossil fuels and are therefore not going away again. The problem, he said, is in areas like the green transition in mobility, which still require that early-stage public funding boost.

“Clearly, electric vehicles are more expensive at the beginning, but all forecasts show that in the long term it will be a cheaper solution than the internal combustion engine,” he said. As fossil fuels become more expensive, companies should eventually end up adopting energy transition measures, but it will take more time, Bonnat argued.

In other words, once a market naturally chooses a greener option, the opinions of politicians stop mattering as much: “If the best solution for the environment is also the cheapest, then there will be no discussion.”

Heel-dragging in Washington DC – or even in Brussels – will not stop the energy transition that has already begun, Bonnat believes, though it might slow down the transition in the toughest sectors to decarbonise – like aviation and hydrogen. “But the trend remains the same to me: climate change is a reality and eventually it will be more expensive for everybody to emit CO2 than not to emit CO2,” said Bonnat.

Keep calm and carry on

Marguerite is very focused on Europe and has very little exposure to the market in the US and the shift in direction under the Trump administration. The company’s investors, as well as the projects they invest in, are all sticking the course, he said.

“We are not seeing any change in their sustainability targets or their decarbonisation commitments. Everybody’s looking at what the US are doing, but our investors are not really impacted by this. And if you look at the rest of the world, you will see that it doesn’t really have a big impact on all the energy transition trends,” he said.

Christophe Bonnat, Portfolio Director & Head of ESG at Marguerite. © Photo credit: Marguerite

“We are not seeing any change in their sustainability targets or their decarbonisation commitments. Everybody’s looking at what the US are doing, but our investors are not really impacted by this. And if you look at the rest of the world, you will see that it doesn’t really have a big impact on all the energy transition trends,” he said.

There are dozens of energy trading schemes across all major countries, plus new schemes being set up. Renewable energy infrastructure, including hundreds of gigawatts of new capacity in China, is being added every year: “This is what it really looks like. It’s a temporary setback that comes from the US and it’s fairly local,” Bonnat said optimistically.

Marguerite invests with a long-term view, to help businesses grow before selling them on again after a few years. In this context, sustainability matters: “If your company is still not clean enough, if you didn’t transition sufficiently, then the basis of potential acquirers will be smaller, and the value of your investment will be lower. So, it’s a protection of value for our investors to invest in assets which will not be stranded in a few years.”

As an infrastructure investor, Marguerite needs to put its money where its mouth is, because infrastructure is usually big and visible, with its sustainability credentials laid bare for people to see. Cutting emissions is no longer good enough, if your project endangers an important insect habitat, for example.  

Business reporting was once purely financial but evolved to routinely include emissions data and important human development indicators that touch employees and the communities they operate within. Through ESG, the scope of reporting continues to expand. “It’s a much more complex topic because for CO2 emissions there is one figure that can represent the impact, but biodiversity is a hugely complex topic to put in figures. It’s millions of species, different habitats,” but it is increasingly important, Bonnat said.

Moving in the right direction

Despite all the challenges the world faces today – ones that threaten biodiversity and financial bottom lines alike – it is a good time to be an ESG investor in Europe, Bonnat said.

Wattif is a charging point operator headquartered in Bergen (Norway) specialising in destination charging, i.e. installing charging infrastructure in locations where EV drivers spend several hours, such as hotels and underground car parks. © Photo credit: Wattif

Despite all the challenges the world faces today – ones that threaten biodiversity and financial bottom lines alike – it is a good time to be an ESG investor in Europe, Bonnat said.

With alliances and trading relationships in flux, the continent finds itself forced to look for new opportunities.

“There’s a huge challenge for Europe to develop its independence, strategic independence, in also the health sector, semiconductors, manufacturing in general, to bring back manufacturing to Europe. This is a big trend which will affect a lot the European economy in the future. Europe will not have the same obvious backing from the US against potential threats, that we need to build our strategic independence in all of the sectors. Sovereignty is a big trend which will be more important,” Bonnat said.

Europe relies overwhelmingly on China for rare earth materials, for example, which are crucial for energy transition technologies. Ramping up European mining of these materials where possible, and doing so in a more sustainable way – as well as successfully recovering and recycling materials that otherwise risk ending in landfill, are big challenges.

And while the prospects can be daunting, they bring plenty of opportunity, he said.

(This article was updated on 10 September 2025 at 11:55 to correct assets under management from €700 million to €2 billion)