Advertisement
Skip to Content
Morningstar

Impax Global Opportunities Institutional PXGOX Sustainability

Morningstar Medalist Rating
| Medalist Rating as of | See Impax Investment Hub

Sustainability Analysis

Author Image

Sustainability Summary

 | Morningstar Manager Research  

Impax Global Opportunities Fund has a number of positive attributes that a sustainability-focused investor may find appealing.

This fund has a Morningstar Sustainability Rating of 5 globes, indicating that the ESG risk of holdings in its portfolio is rather low relative to those of its peers in the Morningstar Global Equity Large Cap category. ESG risk provides investors with a signal that reflects to what degree their investments are exposed to risks related to material ESG issues, such as climate change and inequalities, that are not sufficiently managed. ESG risk differs from impact, which is about seeking positive environmental and social outcomes.

Based on its latest prospectus, sustainability or ESG factors are a focus in the investment process of Impax Global Opportunities Fund. Funds with ESG-focused mandates are more likely to deliver positive sustainability outcomes. One key area of strength for Impax Global Opportunities Fund is its low Morningstar Portfolio Carbon Risk Score of 4.37 and very low fossil fuel exposure over the past 12 months, which earns it the Morningstar Low Carbon Designation. Thus, the companies held in the portfolio are in general alignment with the transition to a low-carbon economy. Currently, the fund's involvement in fossil fuels is negligible, and compares favorably with 3.83% for its average peer.

By prospectus, the fund aims to avoid, or limit its exposure to, companies associated with controversial weapons, tobacco, thermal coal, and small arms. The fund fulfills this goal as its investment exposure to each of these activities is negligible.

Its 4.21% involvement in carbon solutions is lower than the 8.61% average involvement of its peers in the Global Large-stock Growth category. Carbon solutions include products and services related to renewable energy, energy efficiency, green buildings, green transportation, and so on.

The fund has a modest level of exposure (4.14%) to companies with high or severe controversies. Companies with high or severe controversies are involved in incidents such as corruption, employee abuses, environmental incidents, and corporate scandals that pose serious business risks to the company.

Author Image

ESG Commitment Level Asset Manager

 | Leader , 

A true dedication to sustainable investing.

At its foundation, Impax pioneered sustainable investing by focusing on companies that provide solutions to resource scarcity in areas such as alternative energy, water, and waste. Impax’s Listed Equity business nowadays accounts for around 70% of its total firm assets. The strategies within this group invest in companies that can benefit from the transition to a more sustainable economy. The Pax World acquisition added a diverse set of strategies, including fixed income, smart beta, and US equity funds, but all thoroughly incorporate ESG criteria in their approaches. Across the fund range, ESG considerations are incorporated at every stage of the investment process and rely on the firm’s robust proprietary ESG research and tools. The high quality of ESG research is further exemplified by the regular publication of insightful thought leadership pieces.

Impax’s commitment to sustainable investing also shines through its people. Each of the 16 members of the Listed Equity team is involved in ESG company research, proxy voting, and engagement efforts. This team is a sound mix of very seasoned and long-tenured ESG-minded investors and more-junior members. On active ownership, the investment team is supported by a dedicated team of seven proxy-voting and engagement experts.

Proxy voting at Impax is overall strong. True to its DNA, the firm votes often in favor of ESG-related shareholder resolutions. Impax also regularly cooperates with other investors in its engagement efforts and uses policy advocacy to infuse good ESG practices. In 2020, the firm strengthened this latter capability by hiring an additional experienced team member. However, more transparency and detailed reporting around active ownership would be welcome.