Growing and outperforming

Growing and outperforming

Oct 1, 2018
Image credit: Franck V. via Unsplash
Monday, October 1, 2018

Environmental markets have undergone a remarkable transformation in the last 20 years, growing beyond what even boosters though was possible in the late 1990s, according to Bruce Jenkyn-Jones, co-head of listed equities and executive director of Impax Asset Management.

Resource scarcity, environmental and social regulations and consumer preferences for healthier, organic, free trade and other products are driving the growth, wrote Jenkyn-Jones in a blog post.

Impax launched an environmental index in 1999 that singled out 50 companies that derived at least half their revenues from clean energy, waste management and curbing pollution. Now 2,000 companies would qualify for a similar portfolio.

Half of those first 50 companies had market capitalizations of £500 million (€561.7 million/CHF639.7 million). Today, the average market cap of companies in Impax’s thematic universe is $3.8 billion (€3.27 billion/CHF3.73 billion)

The geographic distribution of companies have spread, too. In the last nine years, the number of companies in Impax’s Asia-Pacific universe has risen from 342 to 630.

“We believe that the transition to a more sustainable economy will continue to disrupt an ever-larger proportion of the global economy,” wrote Jenkyn-Jones. “Portfolios which focus on well-positioned companies, while avoiding those unable or unwilling to adapt, potentially could outperform.”

Image credit: Franck V. via Unsplash