Sustainable Views: From football stardom to green investing

Hello and welcome to Sustainable Views. My name is Alex Janniot. I'm the Senior Investment Correspondent on the title, and today I'm going to talk to someone who I think we can all agree has had a totally unique career. Before entering the world of ESG, Mathieu Flamini had a successful career in professional football, a tough-tackling central midfielder who represented the French national team and won honours with Arsenal and AC Milan.

Flamini! He's done it again!

And while North London might be red, today Flamini spends his time tackling all things green. He's a co-founder of GF Biochemicals. We discuss green entrepreneurship, the current regulatory landscape, and how to foster innovation in sustainability. Mathieu Flamini, thank you for joining us. Why don't you start by telling us about GF Biochemicals?

Thank you for having me. A real pleasure to be here today. So GF Biochemicals, we have co-founded the company now over a decade ago. With the ambition to basically accelerate the transition from petrochemical industry to a bio-based industry. In a few words, what does that mean? Today, the petrochemical industry is generating one-third of the oil demand. It's an industry which is basically manufacturing ingredients for most of our consumer goods, which we are using every day. And we are accelerating this transition by replacing all the harmful and non-sustainable ingredients which we find in our everyday product by safe ones, and more sustainable ones. So that's what we started to do and we are now commercializing at industrial scale.

Your career has taken a fairly unique trajectory. How and why did you get into green entrepreneurship?

So if I have to give you an answer, we have to go back at least maybe like more than 20, 25 years ago when I grew up by Marseille, by the sea. And at the time, my father used to be a diver by passion. So I grew up with two passions. One was for football, I grew up in a city such as Marseille, and the second one was for nature and for the sea. And I still remember the collection of plastic, like a never-ending collection of plastic on the beach. And probably it's because of that that today I decided to take more action and to be involved in such a journey.

And what are your thoughts on the general level of environmental entrepreneurship? Is this a space that's successfully attracting quality people? And also the capital that those people need to operate?

I think one of the most important criteria for an entrepreneur is to be able for him to project himself and to be anticipating on what's going to be the next moves. One thing is clear today is we will need to bring solution to a problem which is called climate change. I mean, until not so long ago, we were calling it climate, global warming. Today we call it The kettle is probably boiling, as Mr. Guterres has said not so long ago. So once you have a problem, you need to bring solution. And I think as an entrepreneur, there is no better way to be able to provide a solution to a problem. So I personally believe there is a great momentum. I personally believe also we are at the right place at the right time because we know that we need to act not in 5 years, not in 10 years, but today. And I think you have more and more entrepreneurs going into that direction because they have realized and they can create, you know, successful businesses.

Do you think that the regulatory environment currently fosters green entrepreneurship and innovation?

I think there are two important aspects today. On one side, you have the regulator, which is more and more playing its role. And on the other side, you also have consumers, consumers acting and requesting like a new proposal. So in between, you have those large chemical companies, you have those large FMCG companies. Which are also like taking huge commitment and they will become very soon accountable. So because I think there is a new demand out there, the government is also understanding that they have to act and they have to act fast. Obviously, the question is like, are they acting fast enough? The answer is obviously it's never quick enough, especially when we're having to face such an important problem. But I think they are aware that it is important for them to basically take action. And we are seeing also competition. We're seeing competition, I mean, between Europe, we're seeing competition between the US. We have seen with with the US coming out with a new plan and IRA plan, investing a lot of capital and a lot of support, you know, to accelerate this transition. I think Europe also have to act because sometimes we have the tendency to forget that we are facing, I will say, like a global economic war. I mean, like between the various continents. And if we want Europe to exist, you know, in the next decades, I mean, we have to make sure that we are part of the future industries.

Yeah, I mean, I guess you're referring to the Inflation Reduction Act in the US where there's a lot of tax breaks and versus you might characterize the EU's approach as setting quite strict targets. I mean, I'm keen to hear your thoughts on wider green policy in the EU and other markets. I mean, do you think the EU's current approach to climate change is working?

So I personally believe with the Green Deal in Europe, a lot of action has been taken. Obviously, as I was saying, I think we need to accelerate and improve that even better. I can tell you also a little told you about my journey with the French government because we are collaborating a lot with the French government. We're exploring like further expansion in France and obviously Europe. I mean, some people can say that Europe is becoming less and less competitive, but I mean, I think some new mechanisms have been put in place. I mean, I'm talking about the BPI, which is a French organism which is supporting entrepreneurs. We're talking also about European Investment Bank, which is now deploying also even more capitals. I mean, different way of accessing those capitals. You have corporate loans, you You have venture loans which are also supporting entrepreneurs who are willing to deploy capital in Europe and to reindustrialize, I would say, the sector. Regarding UK, I've also seen then lately we have pushback, you know, like some new regulation which were like in 2025 to 2030. I mean, it's a pity, obviously, because we are all hoping for a brighter future. But sometimes, you know, also understand that consumers are requesting maybe like to adapt to them which I think the UK government is maybe trying to do. So if we follow this approach, then if we are putting less pressure on consumers, which is understandable, maybe we should increase the pressure, I would say, like on large chemical groups and large FMCG groups. Because the reality is like, we know we have to adapt, we know we have to transition. And as I was saying before, I mean, like, instead of seeing it as a limitation, we should see it as an opportunity.

I mean, it's interesting you picked up on the UK rolling back various targets. Do you think there's potential for that to affect investor confidence, particularly from overseas, to have the government move the goalposts on those goals?

It can be frustrating. It can be frustrating because when you're a large company and basically you have like your targets and your fixed targets, you know, like a yearly basis, but also 5 and 10 years, you know, target. So it's very important. And once, you know, you take commitment, you are able to keep them because if not, it can create, you know, a lot of uncertainty and it can create a lot of issue in internally. So I personally believe that it is important to have a vision. It is important to have targets. Obviously, when, you know, facts change, you have to adapt. This is something you learn in the business. But I personally believe this is important to understand that we need to change. And basically, like, postponing, you know, like those, those targets will make it only like more difficult for us. Because the reality today, I mean, I'm going to take one example. We all live in big cities and pollution is having a massive impact on all of us. So I will say that even if you don't care about planet, I'm sure we all care about our own health.

Yes, I went for a run around here at lunch and it wasn't great. You touched on France and it's interesting, we characterize, I think, the US and we talk about Europe, but there's clearly also a role for independent nation states to play. I mean, perhaps tell us more about the work that you've done with France then.

Yeah, definitely. As you were saying, I think like you have US on one side investing a lot of money in terms of accelerating this transition, trying to come out with clean energy, trying to bring some more sustainable technology to to the market. Europe is also trying to find its place in this global economy. And through the Green Deal, Europe is deploying a lot of capital. I was mentioning before, like European Investment Bank, which is able to deploy capital through corporate loan, also venture loan. So all this is obviously helping entrepreneurs to scale up on big scale, all those technology, and to also retain those company and those entrepreneurs and those technology. If we speak a little bit about France, and other European countries. I mean, the reality is there is also competition, you know, inside Europe between the countries because all of them want to demonstrate that they can be more competitive than the one next, next to it. So if I'm speaking a little bit about France, because I've been like interacting with the French government for quite some time now, I think there are some interesting aspects. I will mention a few of them, but one of them is like what we call credit, credit tax on R&D. Meaning that if you invest up to €100 million in France in R&D, I mean, you are basically recovering 43% out of that, which is obviously a huge incentive when you're like a young company and when you're investing heavily in R&D. So this is one of the examples. So other example is like for the French government and the President Macron, I mean, like a few important topics are like reindustrialization, energy transition, and also the reduction of the chemical intrant, meaning like the chemicals coming from abroad. And if you are coming with like ambitious project, The French government is also giving you the opportunity to back you up, meaning like BPI as a French organism, which is supporting entrepreneurs via also like access to capitals. But also like you have what they call the French 2030, okay, which is also like supporting entrepreneurs and giving them to accelerate this penetration to the market. So this is what I can say about France, but I'm hoping that in UK also there are some strategy in that direction.

Sure. I mean, broadly, do you think that there's sufficient capital going into climate solutions? And what can be done to accelerate this? Is that the responsibility of governments and regulators? Or to what extent do companies and investors have to take responsibility as well?

This is interesting you're asking me that. I'm attending tomorrow the JPMorgan conference. I will be speaking before the CEO, Jimmy Dimon. So I think it's definitely like important also for the largest banks today to allocate capital to this new economy. Because as I was saying before, you want to be part of the next generation technologies, next-generation industry and not be stuck, you know, in the past. This is one important aspect. Second aspect is also those technologies are becoming profitable. This year, I think it's an important number maybe to mention. I mean, it was the first time that we used fossil fuel for 33% of the electricity generated in Europe. So clearly, clearly, you know, like the fossil fuel consumption, you know, in this department is reducing. Meaning that obviously other, other energy are growing and are becoming more and more profitable. So if not so long ago we were saying that solar energy was a very expensive one, I mean, today is demonstrating that if you have invested in solar energy 10, 15 years ago, I mean, today you're generating like some very good, very good return. So what's important to mention is like those technology are becoming one profitable. And I think like more and more capital are going toward that direction because change is happening. And it's not a matter to, to understand if it's going to happen or not is just a matter of time.

We at Sustainable Views, we're very interested in the role that both the private and public sectors can play working hand in hand to enable the climate transition. And you at your company have developed your technologies in partnership with universities. How important is your relationship with academia? And is that a model that other green entrepreneurs maybe should consider?

I think so. I think so. What I like to say is today what's very clear is innovation is not coming necessarily anymore from those large, large groups. Okay. And these are like the large, large company, large chemical groups, large FMCG group. Why? Because when you have so much legacy, you know, involved and when you are so big, it is very, very difficult for you to basically, like I would say, to adapt or for you to transition or for you to, I would say, like come back a little bit on what you used to do. So a lot of the innovation, a lot of those new projects are coming from outsiders. Startups, meaning like smaller companies, companies which are much more agile and which are able to basically like bring innovation much quicker to the market because reality is the world is going very fast. The demand is adapting very fast. So innovation is coming from smaller companies like ours. And for us to have the opportunity to also interact and collaborate with, with university as an example is very important because new talents are coming from those universities. I mean, like those new generations which also are committed to bring solutions and to accelerate the transition is very important. So for us to be constantly, you know, like in contact with those universities is very important. It gives us the opportunity to adapt to the new demand and bring those innovations to the market.

Thank you very much for your time today, Mathieu. Now, it would be remiss of me to have you with us without getting a football question in. Are you enjoying Arsenal's start of the season?

Yes, very much. I think they did a great year last season. Very close to coming out with a title, but we have to recognise that City did also a great year. I think we're starting well and we are demonstrating that there is continuity in the work which was done last year. And hopefully, you know, maybe this year we have a better ending. So let's say we are allowed to dream again, which is great.

Mathieu Flamini, thank you for joining us.

Thank you for having me.

Thank you for joining us for that fascinating conversation. If you'd like to read more about ESG policy and regulation, please visit our website via www.sustainableviews.com. Until next time.