The global economy is currently producing an unsustainable level of CO2 emissions. However, 194 countries have signed the Paris Climate Agreement with the objective to limit the global temperature rise to 2oC above pre-industrial levels.

In the bar chart below we have compared the CO2 outcome of £10m invested in the global economy as it is today with the lower carbon economy we will need if we are to achieve the 2oC target1.

A “2oC economy” still emits CO2 but at a significantly lower level than we produce today. A huge change in our energy use, and substantial investment in new environmental technologies are required if we are to meet these goals. But this shift is already well underway, driven by the rising adoption of energy efficiency, renewable energy and waste management, as well as changes in land use and farming practices around the world.

Impax’s listed equity funds have a significant exposure to these low carbon “transition technologies”. Investors seeking to contribute to the low carbon transition, perhaps by reallocating divested fossil fuel allocations towards environmental solution providers, may be interested in the significant abatement achieved by an investment of £10m in Impax Environmental Leaders or Impax Environmental Markets.

Environmental solution providers give investors exposure to a high growth area of the market which may be missing or underrepresented in their equity portfolios. Companies developing new technologies to combat environmental challenges generally deliver superior growth. We believe the drivers of these markets will continue to strengthen and these investment opportunities will remain compelling for decades to come.

Net C02 impact per £10m invested

For more information on net carbon impact measurement and investment opportunities in the low carbon energy transition view our Impact @ Impax clip here.

Sources

1Source: United Nations Framework Convention on Climate Change (UNFCCC), 2016. Aggregate effect of the intended nationally determined contributions: an update – synthesis report by the secretariat, McKinsey Global Institute, Haver, BIS, Deutsche Bank estimates, 2014, and IMF, National Central Banks and Statistical Offices, Thomson Reuters, 2014. Bar reflects the range of estimates of value invested. 

2Impax Environmental Leaders and Impax Environmental Markets are representative accounts of Impax Leaders strategy and Impax Specialists strategy respectively. The impact methodology for the Environmental Markets and Environmental Leaders strategies has been assured by Ernst & Young LLP, data as at 31/12/2015. 2016 environmental impact metrics are currently being updated.

Meg Brown

Chief Product & Marketing Officer, Executive Director

Meg leads the Global Product and Marketing Group at Impax, overseeing branding and marketing; communications; client experience and working with investment teams heads on product design and governance.

She has extensive experience in sustainability and investment research, having begun her career in 2002. As head of Citi’s top ranked Climate and Sustainable Investment Research team she worked with institutional and private clients across Europe on impact and responsible investment. Meg joined Impax in 2014 following a period as a consultant to private sector and not for profit clients in designing responsible investment strategies, including acting as the UK Liaison for the Global Impact Investing Network. Meg has a MSc in Environment and Development from the London School of Economics and is a non-executive director of the Carbon Tracker Initiative.

Recent Insights

Additional Insights

5yrs of Impact @ Impax

This is the fifth year that Impax has published a report quantifying and disclosing the environmental benefit derived from our portfolio companies’ activities.

12 Jul 2019
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