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Impax Intelligence – Environmental markets: strengthening drivers and new catalysts

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Impax Asset Management

After a year of confounded expectations, making predictions for 2017 may seem like a fool’s errand.  But it is the job of investment managers to anticipate the future – and supported by a range of positive developments – we believe that the environmental markets investment thesis remains attractive.

Although the next US President has appointed a climate change sceptic to the post of senior environmental regulator, a Trump administration is likely to be positive for many environmental markets.  And, taking a wider view, the global trends that underpin businesses that provide solutions to environmental problems continue to gather momentum.

The macro-economic backdrop


The fiscal context is shifting from austerity to stimulus, with support for infrastructure investment expected from a Trump administration, as well as in countries such as the UK, Japan and Canada.  Smaller firms carrying low levels of debt, as is typically the case in environmental markets, also look well positioned to out-perform the broader global equity market if interest rates rise.                          

Potential upside from infrastructure spending

Increased infrastructure spending promises to boost key environmental market sectors, namely water and waste water infrastructure and technology, environmental testing and environmental consultancies.  These companies account for a far larger share of our investment portfolios than the US-based renewables firms that are most exposed to an uncertain fossil energy friendly policy.  But even here, we believe the downside has been overplayed.  Much support for renewables in the US is at the state level, while key federal tax credits for wind and solar were extended just 12 months ago, with substantial Republican support.  Perhaps most importantly, the increasingly attractive economics of onshore wind and solar means that they can continue to compete with coal- and natural gas-fired power generation.

International climate action on course


The mood at the COP22 climate conference in Marrakesh was defiantly optimistic.  The response from the international community to Trump’s pre-election threat to “cancel” the 2015 Paris Climate Agreement has been to redouble support for the climate treaty, with China, crucially, reiterating its commitment to addressing climate change.  A number of factors explain this mood of determination. First, the science of climate change has become increasingly compelling.  Second, the economic opportunity presented by the low-carbon transition is becoming increasingly attractive.  Third, the related problem of local air pollution in many developing countries provides a persuasive reason to curb fossil fuel use.

In addition, we remain bullish on renewable energy project investment in Europe, with wind and solar farms offering long-term, inflation-linked returns.  In 2017 we expect finalisation of the European Union’s latest directives on energy and climate that target by 2030 the cutting of greenhouse gas emissions by 40% (on 1990 levels), improving renewable energy production by at least 27%, and increasing energy savings by 27%.

Sustainable real estate is also generating opportunities, with tenants and buyers increasingly seeking assets with high environmental standards – and lower running costs.

Hedging risk and accessing upside  

We believe that the environmental markets sector will continue to offer investors the flexibility, diversity and resilience both to deliver growth and hedge against emerging environmental risks.  By taking an active approach to investing in these dynamic markets, the thesis applies as much in uncertain times as in more benign conditions.

ian-simmThe author Ian Simm is the Founder and Chief Executive of Impax Asset Management Group plc.  Ian has been responsible for building the company since its launch in 1998, and continues to head the listed equities and real assets investment committees. 

Prior to Impax, Ian was an engagement manager at McKinsey & Company advising clients on resource efficiency issues.  In 2013 he was appointed by the Secretary of State (Senior Minister) for Business, Innovation and Skills as a member of the Natural Environment Research Council (NERC), the UK’s leading funding agency for environmental science.  He has a first class honours degree in physics from Cambridge University and a Master’s in Public Administration from Harvard University

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Green Weddings Trend: Why 70% of Newlyweds Are Going Green

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A couple of months ago, my best friend got married to her new husband. They are both very eco-conscious people, so they decided to have a unique twist on their wedding. They asked for the following:

  • They arranged a carpool with their friends.
  • They didn’t have any balloons. Instead they used umbrellas.
  • They used plant materials instead of plastic confetti.
  • My friend insisted her husband not purchase a diamond. In addition to being ecologically conscious, she didn’t like the idea of having a stone that was used in conflict zones.

My friends aren’t the only ones making these changes. In fact, nearly a quarter of all newlyweds are organizing green weddings.


Green Weddings Are Becoming the Norm

People are more concerned about green living than ever before. They are trying to incorporate environmental protectionist ideas into every facet of their lives, even the most intimate, such as marriage. A growing number of people are trying to have green weddings, which can make a big difference in reducing their carbon footprint.

How much of a difference can this make? Here are some statistics to bear in mind:

There are a number ofreasons that green weddings are becoming more important. Here are a few.

People Are More Worried About Environmental Preservation than Ever Before


Green living in general is becoming a greater concern for most people. Even younger conservatives are breaking from their older counterparts by insisting on fighting climate change. According to a poll from Pew Research earlier this year, 75% of Americans say that they are very concerned about protecting the environment. Having green weddings is a good way to act on this concern.

One of the biggest changes people are making is using recycled products for their green weddings. This is explained by the research from Pew:

“Overall, 32% of U.S. adults say they are bothered a lot by people throwing away things that could be recycled. Roughly six-in-ten Americans (61%) who say they always try to live in ways that protect the environment say it bothers them “a lot” when others throw away things that could be recycled. Among those who are less focused on environmental protection, only a quarter say it bothers them a lot when others don’t recycle. People who are environmentally conscious are also twice as likely as others to say that seeing someone incorrectly putting trash in recycling bins bothers them a lot (42% vs. 21%).”

Indifferent Politicians Are Driving them to Take More Initiative

Many politicians in power have been very hesitant to take action on climate change. Many of them have openly stated that it is a hoax. These politicians are forcing people to do what they can in their own lives to make a difference. Making small changes, such as hosting green weddings, is a great way to improve the environment without waiting for political momentum.

Cost and Simplicity

A couple of the biggest reasons that people want to host green weddings have nothing to do with their concern for the environment. Running green weddings is simply cheaper and simpler than having a massive, traditional one. One of the biggest changes is that they are buying green engagement rings from the best brands.

Green Weddings Are the Future

Green weddings have become very popular over the past few years. They will probably account for close to 90% of all marriages by 2025. People that are planning to get married should look into the benefits and plan accordingly.

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Green Tech Start-Ups: Are they the Future?

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Endless innovations are occurring in green companies, reinventing the industries they belong to. Gradually, they are beginning to amass more success and popularity. Consequently, these factors serve as a good indicator for green technology businesses, and their development must begin somewhere.

Green tech start-ups boast a wide array of opportunities for the economy and environment, while boosting recruitment openings with valuable services. While the technology industry is littered with high revenues and competition, the green tech start-ups are the clear sign of a cleaner future.


Fulfilling a Genuine Need

Many tech companies will market themselves as the ultimate tech giants to shift stock and make profit. As they all vie for attention through warped corporate rhetoric, there is only one ethical winner; the start-up green tech company.

Some argue that mainstream tech businesses have grown far too big, branching out into other industries and standing between the consumer and practically everything they do. However, green tech start-ups go beyond the shallow ambitions of a company, answering a call to sincerely help the customer and climate in any way they can. Of course, this is an attractive business model, putting customers at ease as they contribute to a humanitarian cause that is genuine through and through.

After all, empathy is a striking trait to have in business, and green tech start-ups maintain this composure by their very nature and purpose.

Creating Opportunities

Despite the pursuits for clean energy still needing more awareness, green tech is an area that is ripe for contribution and expansion. There’s no need to copy another company or be a business of cheap knockoffs; green tech start-ups can add a new voice to the economy by being fresh, fearless and entrepreneurial.


Technology is at its most useful when it breaks new ground, an awe that eco-friendly innovations have by default in their operations. Of course, green tech start-ups have the chance to build on this foundation and create harmony instead of climate crisis. Ultimately, the tech advancements are what revolutionise clean energy as more than an activist niche, putting theory into practice.

Despite the US gradually becoming more disengaged with green technology, others such as China and Canada recognise the potential in green technology for creating jobs and growth in their respective economies. The slack of others spurs them on, which creates a constant influx of prospects for the green tech sector. Put simply, their services are always required, able to thrive from country to country.

A Fundamental Foresight

Mainstream technology can seem repetitive and dull, tinkering with what has come before rather than turning tech on its head. Since 2011, technology has been accused of stagnation, something which the internet and petty app services seem to disguise in short reaching ideas of creativity.

However, green tech start-ups aren’t just winging it, and operate with a roadmap of climate change in the years ahead to strategize accordingly. In other words, they aren’t simply looking to make a quick profit by sticking to a trend, but have the long-term future in mind. Consequently, the green tech start-up will be there from the very start, building up from the foundational level to only grow as more and more people inevitably go green.

They can additionally forecast their finances too, with the ability to access online platforms despite the differing levels of experience, keeping them in the loop. Consequently, with an eye for the future, green tech startups are the ones who will eventually usher in the new era.

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