Impax Asset Management outlines winners and losers in the push to "build back better" from Covid-19

Green building

Impax Asset Management says there will be “winners and losers” in the economic transition to a more sustainable economy, as trends continue to be accelerated in the post-pandemic rebuilding process. 

In a new report, the asset management firm notes that policy makers are unlikely to return to the “old normal” as they move from lockdown to rebuilding.

As a result, Impax says that investment opportunities will open up in industrial automation advances, digitalisation acceleration and health, safety and well-being. 

Risks associated with human capital management, diversity, climate change and biodiversity are “becoming relevant to fundamental analysis across sectors”.

The report also identifies four structural changes that will continue to disrupt business as we know it. These include a heightened awareness of systems-level risks; the exposure of supply chain vulnerabilities; social distancing measures changing behaviour; and an acceleration towards a digital economy.

Bruce Jenkyn-Jones, co-head of Listed Equities, executive director, Impax Asset Management, comments: “C19 has been an intense and high-stakes trial run for system driven management. The crisis has revealed complex interconnected consequences, arising from an unsustainable economy. In recognising this, C19 has given investors, policy makers, corporations and consumers a chance to avoid the same missteps when the next high impact crisis of this magnitude hits (for example, climate change).

“Looking ahead, the reaction of policy makers as they move from lockdown to rebuilding economies, will likely incorporate societal feedback that simply rebuilding an unequal, fossil fuel powered economy is not enough.

“In addition to continuing to incorporate these learnings into the investment process, Impax will support calls for both private and public sectors to invest in the green economy as part of post-C19 economic stimulus packages, as well as tackling persistent areas of inequality.”

Impax’s investment process, particularly its Sustainability Lens, Environmental and Gender focused investment universes and integrated ESG risk management practices already address the main Covid-19 challenges, yet certain aspects will gather renewed importance to improve resilience.

These include recognising the value of biodiversity, and protecting wild areas from further encroachment, which could reduce the risk of further zoonotic transmission and improve our quality of life.

Impax adds that tackling persistent inequalities of gender, race and opportunity would equip companies with a broader talent pool and reduce operational and reputational risk through supply chains.