Impax Asset Management is an investment adviser and selects investments on behalf of LD. As well as generating good long-term returns, the aim is also to make a positive contribution to tackling environmental and climate challenges.
26,000,000,000 litres of water saved
Impax has assessed the positive effects of the investments. Auditors from Ernst & Young have validated the data and methodology to ensure that the information is reliable.
The positive effects of LD’s investments in 2016 are shown below. LD increased its investments during the year from just under DKK 0.5 billion at the start of the year to DKK 1.2 billion by the end of 2016. In September 2017, environmental and climate investments stood at DKK 1.3 billion, primarily as a result of price rises. ◾Net
CO₂ emissions were reduced by 7,679 tonnes
◾An additional 30,858 megawatt-hours were generated from sustainable energy sources
◾26,085 mega litres of water were saved – either through water savings or water
treatment ◾Recyclable materials were recovered from the treatment of 30,418 tonnes of waste
"We are very pleased with our collaboration with Impax. They help us invest globally in companies that incorporate environmental and climate considerations into their growth strategies. As well as good returns, we now also have a thorough analysis of the impact on the environment and climate,” says Kristoffer Fabricius Birch, Head of Equities at LD.
Year-to-date in 2017, climate investments have delivered better returns than the general performance of global equity markets. The partnership with Impax began in 2011, and a return of 100 per cent has been achieved since the start. By comparison, global equity markets have returned 85 per cent over the same period. However, climate investment does not always deliver better returns. There can be significant fluctuations along the way.
Global challenges
Almost 200 countries have signed the Paris Agreement to reduce CO₂ emissions with a view to limiting global temperature rises to a maximum of 2 degrees Celsius above pre-industrial levels. According to Impax, achieving this target will require a significant shift towards sustainable forms of energy. The strategy on which Impax bases its investments reduces CO2 emissions to a far greater extent than that envisaged in the Paris Agreement.
Impax also highlights the ever-widening gap between the need for clean drinking water and the ability to provide it. The growing population is placing considerable pressure on natural resources, and there is a massive need to invest in technologies that can reduce water wastage and water pollution.
Impax employs a so-called ‘best-ideas’ strategy, which focuses on investing in companies that are well-positioned to address global climate challenges. These may be companies that provide technological solutions to reduce energy and water consumption, cut CO₂ emissions and promote sustainable food production. LD’s investments form part of Impax’s ‘leaders’ strategy’, which focuses on large global companies.
Impax’s analysis of the climate impact of LD’s climate investments in 2016
Impax’s analysis of CO₂ reductions resulting from a €10 million investment in the Leaders Strategy
