Principle 3: Principle 2: Principle 1: To seek appropriate disclosure on ESG issues by the companies invested in. To be active owners and incorporate ESG issues into ownership policies and practices. To incorporate ESG issues into investment analysis and decision-making processes.
We believe that by looking over a longer time horizon and using a broader perspective than the market, we can identify mispriced stocks and build focused portfolios to deliver sustainable performance. It is fundamental to our view of responsible investment to promote good governance and reflect our investors’ values.
Tar Sands “ Unconventional Oil: Scraping the Bottom of the Barrel”: commercialisation of unconventional fossil fuels. Intensively climate hostile sources of energy. Called on companies to report on the risks associated with the env & soc liabilities of oil sands operations. Halt further expansion.
Biofuels: report on the sustainability risks and opportunities surrounding biofuels, including the impact on food prices.
HSBC Samling: investment in a Malaysian logging company was at odds with HSBC commitment to the Equator Principles.
Severn Trent: failures in governance since 2002. Fined £36m by OFWAT for submitting to false customer satisfaction data, used to justify increases in customer tariffs.
Disclaimer This document is provided to you for your information and discussion only. It is not a solicitation or an offer to buy or sell any security or other financial instrument. Any analytical information provided is for information purposes only and is not an impartial assessment of the value or the prospects of its subject matter. Nothing in this document constitutes investment, legal, accounting or tax advice, or a representation that any investment or strategy is suitable or appropriate to your or your clients' individual circumstances, or otherwise constitutes a personal recommendation to you or your clients. Any information in this document (including facts, opinions or quotations) may be condensed or summarised and are expressed as of the date of writing. The information may change without notice and The Co-operative Asset Management is under no obligation to ensure that such updates are brought to your attention. The price and value of investments mentioned and any income that might accrue could fall or rise or fluctuate, and investors may get back less than they invest. Past performance is not a guide to future performance. This document has been prepared from sources The Co-operative Asset Management believes to be reliable but we do not guarantee its accuracy or completeness and do not accept liability for any loss arising from its use (including as a result of any acts or omissions based on the information). The Co-operative Asset Management, its affiliates and/or their employees may have a position or holding, or other material interest or effect transactions in any securities mentioned or options thereon, or other investments related thereto and from time to time may add to or dispose of such investments. This document is intended only for the person to whom it is issued by The Co-operative Asset Management. It may not be reproduced or distributed either in whole, or in part, without our written permission. The distribution of this document and the offer and sale of the investment in certain jurisdictions may be forbidden or restricted by law or regulation. For the purposes of this document The Co-operative Asset Management means Co-operative Insurance Society Limited and or its subsidiary company CIS Unit Managers Limited. Both companies are authorised and regulated by the Financial Services Authority. The registered address is CIS Tower, Miller Street, Manchester, M60 OAL (CIS registered no: IP3615R, CIS Unit Managers Limited registered number: 02369965).
Opportunities for Green Investment Presentation to charity advisors and investors 17 th November 2008
“ Investing in companies which provide, utilise, implement or advise upon technology-based systems, products or services in environmental markets, particularly those of alternative energy and energy efficiency, water treatment and pollution control, and waste technology and resource management.”
Environmental Investing differs from mainstream SRI by:
Source: Thomson DataStream US WTI Oil Price Peak Oil – US production peaked in 1970 North Sea in 2000 Source: 1950-1970 Economist 100 years of Economic stats, 1971-1984 BP Statistical Review of world energy, 1985 -2004 International Energy Agency Oil Market Report.
Economic and security factors…
including the price and availability of oil
US water infrastructure spending requirements: Forecasted expenditure of US$277 billion from 2008 to 2020 Source: US EPA Ageing infrastructure
Ca. 750 stocks with >50% revenues / profits or capital employed in environmental markets
- 450 full liquidity
- 300 liquidity constrained
Ca. 450 stocks 20-50% with revenues / profits or capital employed in environmental markets
Steady flow of Pre IPO and infrastructure project-related investments e.g. wind farms
Impax’s Investment Universe
Ca. 750 stocks with >50% revenues/profits or capital employed in the environmental sector
Typically small cap
$750 billion market cap
Ca. 1200 stocks with >20% revenues/profits/capital employed in the environmental sector
$4.5 trillion market cap
Pure Play Universe All Cap Universe
Pure Play: Portfolio Breakdown* * Impax Environmental Markets Plc by market cap., 31 October 2008 Portfolio = 70-90 listed companies Share Listing Size of Company Forward 12 months’ Price to Earnings Ratio to October 09 Sector Focus †
PER: 10 x forward 12 mths earnings to October 09
Median forecast annual portfolio earnings growth of 16%
Sponsors can partner with a specialist fund or sell out to a utility
Fund can add value e.g. by arranging debt, overseeing construction, repackaging assets
Early movers (funds) can leverage expertise and relationships
Projected fund IRRs > 20%
Impax New Energy Investors LP: Typical project structure Investment Contract Impax Fund Supply & Construction Project Company Operation & Maintenance Land Lease Power Sales Sponsor Holding Co. Investment Structuring Options Senior Debt
Strong market drivers leading to superior expected growth rates
Continuing government support for environmental sector
Well-chosen, diversified portfolios of listed stocks should outperform global markets
Venture investments likely to perform well but exits dependent on favourable markets
Project-related investments well suited to “infrastructure” asset class
Disclaimer This document has been prepared by Impax Asset Management Limited (Impax, authorized and regulated by the Financial Services Authority). 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 as 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. 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 in any such Fund. Any offering is made only pursuant to the relevant offering document and the relevant subscription application, all of which must be read in their entirety. Prospective investors should review the offering memorandum, including the risk factors in the offering memorandum, before making a decision to invest. Past performance of a fund is no guarantee as to its performance in the future. This presentation is not an advertisement and is not intended for public use or distribution.