United StatesThe transition to a more sustainable economy has remained fundamental to our investment thesis since we were founded in 1998. Impax’s strategies look to invest in companies whose solutions to environmental and social challenges present long-term investment opportunities, supported by structural trends in the global economy.
Our focus on impact is consistent with our fiduciary duty to pursue risk-adjusted financial returns for our clients.
Our 11th annual Impact Report
The companies held in our portfolios have a real-world impact through their business activities and, in some cases, help to address system-level risks like climate change and biodiversity loss. Impact is a by-product of our investment decision-making, not a driver of it. This is further explained by our four-step ‘theory of change’ framework which describes our philosophy and approach to impact across each asset class held in our portfolio.
The environmental impact metrics that we have now reported on for a decade remain as relevant and important as ever. We therefore continue to report greenhouse gas emissions avoided, as well as metrics relating to renewable energy generation, water, and materials and waste.
We also continue to report on four metrics of social impact related to access to nutritious food, finance, digital connectivity and healthcare services.
Mapping environmental impact metrics to nature
This year, we have continued our work linking environmental markets solutions activities to the solutions alleviating the pressures on nature and biodiversity loss.
The report includes a heat map to illustrate the link between our key positive impact metrics to the five ‘direct drivers’ of biodiversity loss – changing use of sea and land, direct exploitation of organisms, climate change, pollution, and invasive non-native species – as articulated by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES). It demonstrates how positive environmental outcomes in climate, resource efficiency and pollution prevention intersect with biodiversity protection.
By linking measurable portfolio outcomes to drivers of biodiversity loss, we strengthen our ability to identify and track opportunities arising from the growing imperative to address the systemic risks posed by the loss of natural capital.
A constant work in progress
We recognise that standardising the measurement and reporting of impact metrics is still very much a work-in-progress. Due to the lack of recognised standards, we have always sought to be conservative in our approach and to evolve our reporting for improved transparency. We continue to collaborate with peers and industry groups to help standardise impact measurement and reporting for the ultimate benefit of our investors and the broader investment community.