The transition to a more sustainable global economy is already underway, and in many areas, is accelerating.
Disruption is being triggered by:
- Technology innovation and falling costs
- Regulation to incorporate the costs of social and environmental factors in business models
- Consumer preferences for more transparent, authentic and healthy products
A key investment opportunity of the next 20 years is to capture the benefits and avoid the risks of these trends within client portfolios. Economies are shifting from a depletive economic model in which long-term environmental and social costs are externalised for short-term gain; towards a more sustainable one in which growth is delivered with improved social and environmental outcomes. Companies on the front foot in this transition deliver economic growth via more durable business models than those unwilling or unable to adapt.
Impax has already been investing in this transition for the past 20 years, developing expertise applying our framework for market and company analysis for investors seeking superior risk-adjusted returns over the medium to long term.
Over that time, this thesis has evolved from a focus on micro/small cap stocks “Environmental Technologies” starting in the late 1990s to a broader review of all sizes of company “Environmental Markets” in 2007, and then progressing to Resource Efficiency across energy, water, waste and sustainable food in 2012.
Impax’s investment teams have delivered portfolios offering high growth listed equity strategies, added value to infrastructure portfolios by delivering completed power generation assets, and avoided the risks of incumbent, fossil fuel-based business models in both asset classes.
As the opportunity set continues to develop, Impax has expanded investment capabilities into US equities, fixed income and smart beta via the acquisition of Pax World Management earlier this year. We have also developed a proprietary “Lens” which provides a flexible tool to apply “transition thinking” of the risks and opportunities to every corner of the investable universe. This helps us take a medium to long-term view of a wide range of possible investment opportunities.
The Global Opportunities Strategy is the first Impax strategy to offer clients this broader expression of our investment thesis. We expect to continue to develop our services to clients across our wider asset class range as we look forwards to our next 20 years.
Please speak to your usual Impax contact for further information on the Global Opportunities Strategy.