29th Dec 2021 12:02
(Alliance News) - Impax Asset Management Group PLC on Wednesday said the recent COP26 climate conference, while not a total success, "laid the foundations for real progress in getting national economies on track towards net zero," creating opportunities for investors in 2022 and beyond.
Impax is a London-based investor focused on transition to environmentally sustainable economy. Its shares trade on the AIM market.
At the COP26 summit, which was held in Glasgow in November, almost 200 countries agreed to a 'Glasgow Climate Pact'. They promised "to pursue efforts to limit the [global average] temperature increase to 1.5 degrees Celsius" and agreed for the first time on the need to reduce global emissions by 45% by 2030 compared to 2010 levels. In language that was watered down at the last moment, they agreed to "phase down", rather than phase out, the burning of coal.
"We believe that with momentum from COP26, and the growing incidence of extreme weather events, there will be sustained focus on policies that address the threats posed by climate change in 2022, and beyond. Paramount too is the related need to stem biodiversity loss," said Bruce Jenkyn-Jones, chief investment officer for listed equities at Impax.
The asset manager said the standout success of the Glasgow conference was the emergence of "coalitions of the willing" around key issues such as deforestation and methane emissions.
"So long as the governments, companies and investors making up these coalitions follow through on their commitments, we expect these pledges and the push for more ambitious 2030 goals to amplify investment opportunities," said Chris Dodwell, head of Policy & Advocacy at Impax.
"Products and services that improve the efficiency of buildings, industrial processes and electricity transmission, will be in growing demand. Engineering solutions that address fugitive greenhouse gas emissions will too: more than 100 countries pledged to cut methane emissions by 30% by 2030."
Impax said other market drivers in 2022 will continue to be the world's adaptation to the Covid-19 pandemic; supply chain vulnerability and the associated semiconductor shortage; and the inflationary pressure caused by rising energy prices.
Increased intervention by the Chinese government in its domestic economy, including crackdowns on local property and technology firms, will continue to have repercussions globally in the new year.
"These crackdowns exemplify the policy risks facing investors in China," said Oscar Yang, co-manager of Asian Environmental strategy at Impax. "Our sense is that these risks have not abated, especially ahead of the 20th Communist Party Congress in 2022, which will decide the leadership and the high-level policy direction for the next decade."
Impax Asset Management shares were up 2.4% at 1,449.33 pence in London on Wednesday. The stock has more than doubled from 698.00p on December 31, 2020.
By Tom Waite; [email protected]
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