Fund Name | SRI Style | Product | Region | Asset Type | Launch Date | |
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Impax Environmental Markets plc | Environmentally Focused | Investment Trust | Global | Equity | 22/02/2002 | |
Fund Size: £1283.00m Total screened & themed / SRI assets: £39717.00 Total assets under management: £39717.00 As at: 30/06/23 Contact: clientservices@impaxam.com |
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Overview
Impax Asset Management is solely focused on investing in the transition to a more sustainable global economy. Impax's listed equity strategies seek out mispriced companies that are set to benefit from the long-term trends of rising global populations and wealth, changing demographics, urbanisation, increasing consumption, and the resultant increases in resource demand.
Impax aspires to best practices across all aspects of the management of its listed and private equity investments. Environmental, Social and Governance (“ESG”) considerations are embedded within our rigorous ten step investment process for listed equities. Failure by a company to reach the required ESG score will prevent our investment. |
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FiltersFund informationSustainabilityEnvironmental policy Sustainability policy Resource efficiency policy or theme Sustainable transport policy or theme Sustainability theme or focus Favours cleaner, greener companies Waste management policy or theme UN Global Compact linked exclusion policy Sustainability focus Report against sustainability objectives Encourage more sustainable practices through stewardship Circular economy theme Transition focus Nature & BiodiversityDeforestation / palm oil policy Biodiversity / nature policy Nature / biodiversity based solutions theme Nature / biodiversity focus Nature / biodiversity protection policy Climate Change & EnergyInvests in clean energy / renewables Clean / renewable energy theme or focus Energy efficiency theme Require net zero action plan from all/most companies Paris aligned fund strategy Encourage transition to low carbon through stewardship activity Targeted Positive InvestmentsEU Sustainable Finance Taxonomy holdings 5-25% of fund assets Invests >25% of fund in environmental/social solutions companies Invests >50% of fund in environmental/social solutions companies Human RightsHuman rights policy Child labour exclusion Responsible supply chain policy or theme Oppressive regimes (not free or democratic) exclusion policy Modern slavery exclusion policy Social / EmploymentSocial policy Favours companies with strong social policies Meeting Peoples' Basic NeedsWater / sanitation policy or theme Green infrastructure focus Plant based / smart food production theme Responsible food production or agriculture theme Ethical Values Led ExclusionsAnimal welfare policy Animal testing exclusion policy Tobacco and related product manufacturers excluded Armaments manufacturers avoided Governance & ManagementGovernance policy Anti-bribery and corruption policy Avoids companies with poor governance Digital / cyber security policy Encourage board diversity e.g. gender Encourage TCFD alignment for banks & insurance companies UN sanctions exclusion Encourage higher ESG standards through stewardship activity Fund GovernanceESG integration strategy Asset Size & MetricsOver 50% small / mid cap companies Invests in small, mid and large cap companies How The Fund WorksPositive selection bias Combines norms based exclusions with other SRI criteria Combines ESG strategy with other SRI criteria Focus on ESG risk mitigation Significant harm exclusion SRI / ESG / Ethical policies explained on website Assets mapped to SDGs All assets (except cash) meet published sustain'y criteria Impact MethodologiesMeasures positive impacts Positive environmental impact theme Invests in environmental solutions companies Invests in sustainability / ESG disruptors Aim to deliver positive impacts through engagement Over 50% in assets providing environmental or social ‘solutions’ Intended Clients & Product OptionsIntended for investors interested in sustainability Fund management company informationAbout The BusinessESG / SRI engagement (AFM company wide) Responsible ownership / stewardship policy or strategy (AFM company wide) Responsible ownership / ESG a key differentiator (AFM company wide) Vote all* shares at AGMs / EGMs (AFM company wide) Diversity, equality & inclusion engagement policy (AFM company wide) Specialist positive impact fund management company Boutique / specialist fund management company Integrates ESG factors into all / most fund research In-house diversity improvement programme (AFM company wide) Senior management KPIs include environmental goals (AFM company wide) Invests in new sustainability linked bond issuances (AFM company wide) ResourcesIn-house responsible ownership / voting expertise Employ specialist ESG / SRI / sustainability researchers Use specialist ESG / SRI / sustainability research companies ESG specialists on all investment desks (AFM company wide) Collaborations & AffiliationsPRI signatory UKSIF member Climate Action 100+ or IIGCC member UN Net Zero Asset Owners / Managers Alliance member GFANZ member (AFM company wide) TNFD forum member (AFM company wide) Investment Association (IA) member AccreditationsUK Stewardship Code signatory (AFM company wide) PRI A+ rated (AFM company wide) Engagement ApproachRegularly lead collaborative ESG initiatives (AFM company wide) Encourage responsible corporate taxation (AFM company wide) Engaging on climate change issues Engaging with fossil fuel companies on climate change Engaging to reduce plastics pollution / waste Engaging to encourage responsible mining practices Engaging on biodiversity / nature issues Engaging on human rights issues Engaging on labour / employment issues Engaging on diversity, equality and / or inclusion issues Engaging on governance issues Engaging on mental health issues Engaging to encourage a Just Transition Engaging on responsible supply chain issues Company Wide ExclusionsReview(ing)carbon / fossil fuel exposure for all funds (AFM company wide) Controversial weapons avoidance policy (AFM company wide) Climate & Net Zero TransitionEncourage carbon / greenhouse gas reduction (AFM company wide) Net Zero commitment (AFM company wide) Working towards a ‘Net Zero’ commitment (AFM company wide) Carbon transition plan published (AFM company wide) ‘Forward Looking Climate Metrics’ published / ITR (AFM company wide) Carbon offsetting – do NOT offset carbon as part of net zero plan (AFM company wide) In-house carbon / GHG reduction policy (AFM company wide) Net Zero - have set a Net Zero target date (AFM company wide) Voting policy includes net zero targets (AFM company wide) TransparencyPublish full voting record (AFM company wide) Publish responsible ownership / stewardship report (AFM company wide) Full SRI policy information on company website Paris Alignment plan publicly available (AFM company wide) Net Zero transition plan publicly available (AFM company wide) |
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PolicyThe ESG Policy for Impax Environmental Markets plc outlines the sustainable investment approach undertaken by the manager Impax Asset Management.
All of Impax Asset Managements’ investments are aligned to the transition to a more sustainable economy. Activities with lower sustainability risks and higher opportunities are set to benefit from a transition to a more sustainable, low-carbon economy and are well positioned for the long-term. They are less at risk of disruption from new technologies, changing consumer preferences or legislation. These well-positioned areas of the economy are sought and prioritised for investment across the Manager’s listed investment strategies.
ESG-analysis is an integral part of the Manager’s investment process, at the company level. We believe that a thorough understanding of environmental, social and governance (ESG) issues will enhance our perspectives on both the opportunities and risks offered by individual investments. The analysis enables a deeper and broader understanding of the companies, their corporate structures, oversight mechanisms, risk management capabilities and processes and transparency. Impax Asset Management seeks to understand the character of the companies through the ESG analysis. The insights from the ESG-analysis are then utilised to establish the priorities for engagement with the investee companies. The analysis focuses on corporate governance structures, the most material environmental and/or social risks for a company, climate change, human capital management, and any controversies that a company has faced.
Stewardship through active ESG engagement and proxy voting are important parts of the investment process. They enable monitoring of the investee companies more effectively and aim at further enhancing the structures, processes and disclosures of the companies. Impax Asset Management takes into account relevant regulations when considering the approach to sustainability and ESG, especially as it relates to reporting and disclosures. Impax Environmental Markets plc ESG policy can be found here -policy_esg.pdf (impaxenvironmentalmarkets.co.uk). |
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ProcessThe below explains the approach of the Manager, with oversight from the IEM Board, to integrating Environmental, Social and Governance (ESG) analysis in the investment process. Both the Manager and IEM plc believe that a thorough understanding of environmental, social and governance performance can enhance perspectives of the opportunities and risks offered by individual investments. The Manager has long embedded ESG into its investment process and takes an active approach to engagement with investee companies, as outlined below.
1.Idea generation – identifying interesting companies Impax’s thematic environmental market strategies invest in companies that provide solutions to environmental and resource challenges. Inclusion in the Impax Environmental Markets Universe is contingent upon the resource efficiency and environmental markets business typically having >50% of group revenue, profitability or invested capital. Ideas are sourced from an investment universe that captures the following broad themes: Energy (Alternative Energy/Energy Management & Efficiency) | Clean and Efficient Transport | Sustainable Food | Water (Infrastructure & Technologies) | Circular Economy (Resource Efficiency & Waste Management) | Smart Environment (Environmental Services & Resources and Digital Infrastructure).
2.ESG-analysis. Impax conducts a detailed, proprietary ESG-analysis of new companies considered for the investable universe and review the ESG-analysis on a periodic basis. IAM considers five main pillars within its ESG analysis:
When all the data is gathered, an ESG report is written, and the company is assigned a proprietary ESG-score. Impax does not seek to exclude a certain number or percentage of companies, but rather seeks an absolute level of ESG-quality. Where this is not achieved, a company is excluded from the investable universe.
ESG scoring Upon completion of analysis, an ESG report is submitted and a proprietary ESG score assigned by members of the Sustainability & Stewardship team. Ultimately, all companies must be approved on both a financial and an ESG basis before being added to the investable universe as part of Impax’s research and approval process. The five pillars (corporate governance, material environmental, social, and other risks, climate, human capital/E,D&I, and controversies) are each scored based on tiering of performance, management and disclosures. Each of the five pillars, including sub-pillars, have guidance documents describing what represents best practice from first tier down to the lowest tier. The pillar weights are adjusted where relevant for materiality.
Based on the five pillar scores, companies are assigned an overall rating: Excellent, Good, Average, Fair and Excluded. The Impax ESG scoring system is “absolute” (not a sector best-in-class approach) and is intended to enable a comparison of company ESG quality across countries, sectors, company sizes, etc.
Companies categorised as ‘Excluded’ are not eligible for investment, while those categorized as ‘Fair’ have a cap for the maximum allowed weighting within portfolios, for risk management purposes. Impax does not seek to exclude a certain number or percentage of companies, but rather seeks an absolute level of ESG-quality in companies/issuers eligible for investment (the “A-list” for active listed equities). An improving ESG rating trajectory can give the investment team and portfolio managers further conviction in a company.
Stewardship and engagement All portfolio managers and analysts are involved in engagement activities and Impax’s Investment Committee has a standing “ESG and Engagement” agenda item to continuously inform and discuss engagement issues across the investment teams.
Engagements are conducted as part of regular meetings with company management teams, or through additional conference calls, meetings, email exchanges, or as part of joint communications with the investment community. Engagements are also regularly conducted together with other investors and partners with or without a lead or coordination from expert organisations. Collaborative engagements are conducted across several ESG issues, specific sectors and companies and can be prioritised where outreach may particularly benefit from a larger group of shareholder involvement or in cases where an issue is being escalated. Impax also conducts public policy advocacy, engaging with public policymakers. Where material concerns or anomalies at an investee company are identified, Impax will intervene to mitigate risks and preserve shareholder value. The investee company management team is immediately contacted and, where possible, members of the company board.
If the investee company is unresponsive to engagement or unwilling to consider alternative, less risky options, Impax will escalate the dialogue by:
If interventions are unsuccessful and Impax considers that the risk profile of the company has significantly deteriorated or company strategy/governance structures have altered because of an incident, to a degree where the return outlook and the company’s strategy and quality no longer meet expectations, the company would be excluded from the investable universe and/or sold.
Impax seeks to follow up on previous engagements after six months to one year, depending on the nature of the issue and situational context (e.g., reporting cycles). While some engagements may be one-off, as investee companies’ ESG processes mature over time, engagement series often continue over years.
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Resources, Affiliations & Corporate StrategiesImpax's most valuable research is generated internally, with external research being used to challenge assumptions and conclusions made by the investment team. Much of Impax’s research, especially top-down, global macroeconomic views and analysis is shared across investment teams and used firm-wide. This includes views on changes in credit markets, government and consumer spending, policy announcements, industrial production and commodity prices, sector and industry dynamics, technological disruptions, and similar themes. Impax strives to maintain its competitive advantage by continuing to invest in its personnel and research resources, and by staying ahead of dynamic technology and regulatory changes. External data is sourced from a variety of sources including sell side research, Bloomberg, MSCI, Sustainalytics, Glass Lewis, industry publications, databases, conferences, industry contacts, etc. Impax uses external research and service providers as an input to its ESG analysis. Impax has developed its own proprietary methodology for analysing and scoring companies on ESG quality and does not rely on external ESG ratings. With regards to external ESG research, there is a general concern of the opaqueness of methodologies and that data is increasingly coming through “automated data gathering”, thereby reducing its value. Impax also has concerns about the method of using sector-level materiality analysis as in many cases material risks are company specific. Impax’s own proprietary analysis and scoring methodology is relevant and appropriate for the types of companies in which it invests. External research and data are used when monitoring investee companies’ behaviour and controversies, as well as for norms-based screening. This relates both to normative controversies, such as human rights breaches and more common controversies, such as litigation or labour relations. Impax also uses external research providers’ data to monitor any potential controversial activities, such as revenue exposure to controversial weapons, fossil fuels or tobacco. Impax reviews external ESG research providers on an annual basis, to understand any changes to research methodologies, and to understand areas of priority for the research providers.
ESG research resources: Impax has a dedicated team of Sustainability and Stewardship analysts, led by Lisa Beauvilain.
Fully integrated within the global investment team, the 12-strong Sustainability & Stewardship team is responsible for leadership and oversight of sustainability research, thematic universes, and proprietary tools, fundamental and systematic ESG analysis, ESG policies, and stewardship including proxy voting and company engagement.
The team’s key responsibilities include:
For each prospective and current investment holding, the respective lead analyst from the broader investment team completes the proprietary 10-Step analysis which includes the in-depth ESG analysis. This is accompanied by oversight, review and approval of the scoring by the Sustainability & Stewardship Team to ensure consistency across sectors and companies.
All portfolio managers and analysts conduct proprietary in-house ESG analysis under the supervision of the Head of Sustainability & ESG, an experienced member of the investment team dedicated to ESG research. Impax has the following team members: Lisa Beauvilain, Head of Sustainability & ESG and Miriam Benarey-Meisel, Sustainability & ESG Analyst.
Company ESG characteristics are continually discussed between team members and ESG is a standing item on the weekly Investment Committee agenda. Importantly, while the respective stock’s analyst is informing and leading the ESG analysis and discussion around ESG outcomes, outstanding questions and concerns are continuously discussed with the portfolio managers and Head of Sustainability & ESG. Ultimately, all companies have to be approved by the Investment Committee on both a financial and an ESG basis as part of Impax’s research and approval process.
ESG Training Impax strives to maintain its competitive advantage by continuing to invest in its personnel and research resources. The Head of Sustainability & ESG leads the continual development and training of the Firm’s investment team on ESG competency and training includes emerging risk factors such as cyber risk, plastic exposures or general ESG topics such as the long-lasting value destruction from fraud, shareholder structure and oversized influence, management turnover, and the importance of management attitude during engagement. All new analysts are trained on, and dedicate time to, ESG analysis alongside financial analysis. The team is seasoned, collegial and multi-disciplinary in nature and brings a range of ESG training and experience.
Impax works on ESG engagement collaborations with clients, partners, and industry organisations to promote sustainable investing and ESG considerations across the globe. Impax is proud to be a part of:
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DialshifterOur organisation is helping to support the Paris Climate Agreement and the Race to Net Zero by… As an asset manager, Impax supports meeting the goals of the Paris Agreement by:
Impax focuses particularly on investing in climate solutions. As a signatory of the Net Zero Asset Managers Initiative, we support the goal of net-zero emissions by 2050 or sooner. |
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LiteratureDisclaimer This document (the “Document”) contains information that has been provided at the specific request of the intended recipient and is for discussion purposes only. This Document has been issued by Impax Asset Management (“Impax”) which means one of the following entities depending on the location of the recipient:
The information and any opinions contained in this Document have been compiled in good faith, but no representation or warranty, express or implied, is made to their accuracy, completeness or correctness. Impax, its officers, employees, representatives and agents expressly advise that they shall not be liable in any respect whatsoever for any loss or damage, whether direct, indirect, consequential or otherwise however arising (whether in negligence or otherwise) out of or in connection with the contents of or any omissions from this Document. The information in the Document has not been independently verified and is subject at all times to the conditions, caveats and limitations described in the Document. All opinions, projections and estimates constitute the judgment of Impax as of the date of the Document and are subject to change without notice.
This Document does not constitute an offer to sell, purchase, subscribe for or otherwise invest in units or shares of any fund managed by Impax. It may not be relied upon as constituting any form of investment advice and prospective investors are advised to ensure that they obtain appropriate independent professional advice before making any investment. This information is in no way indicative of how the strategy will perform and is not intended as a statement as to the likelihood of Impax achieving particular results in the future. Past performance of a strategy is no guarantee as to its performance in the future. This Document is not an advertisement and is not intended for public use or distribution. The information contained in the Document is not investment, tax, accounting or legal advice and does not take into consideration the investment objectives, financial situation or particular needs of the recipient. Investing entails certain risks, including the possible loss of the entire principal amount invested. The recipient of this Document should seek its own financial, tax, accounting and legal advice in connection with any proposed investment.
The Document is strictly confidential and is only intended for the intended recipient(s) and must not be forwarded by such intended recipient to anyone else. It must not be copied, reproduced or distributed in whole or in part at any time. The Document may contain proprietary information and any further confidential information made available to the recipient must be held in complete confidence and documents containing such information may not be reproduced, used or disclosed without the prior written consent of Impax. The Document is not intended to be distributed in any jurisdiction where such distribution is not permitted by the local law.
Last amended: 06/09/23 09:00 |
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05/03/2024