Annual Report
& Accounts
For the year ended 30 September 2022
Specialists in
the transition to
a more sustainable
economy
Section TitlePage Title Impax Asset Management Group plc
Impax Asset Management Group plc
Annual Report and Accounts 2022
Annual Report and Accounts 2022
01
01
Since 1998 Impax has pioneered
investment in the transition to a
more sustainable global economy.
Naming of companies in this document
For simplicity we use the following short forms in
the place of the legal company entity names in this
document. Impax Asset Management Group plc is
referred to throughout as “Impax” or the “Company”.
In January 2018, Pax World Management LLC was
acquired by Impax and has been re-named Impax Asset
Management LLC. This company is based in Portsmouth,
New Hampshire and we refer to it as “Impax NH”.
Impax NH is the manager of Pax World Funds.
“Impax North America” refers to the combined
businesses of all our US offices.
Impax Asset Management Ltd and Impax Asset
Management (AIFM) Ltd manage or advise Listed Equities
funds and accounts, and the Private Markets division.
The majority of this business is based in London so we
refer to it as “Impax LN”.
Contents
Overview
02 Highlights
04 Why Impax?
06 Our Philosophy
07 Mission and Values
Strategic Report
10 Chief Executive’s Report
16
Key Performance Indicators
Financial Review
18
22 Our Investment Strategies and Performance
32 Beyond Financial Returns
40 Our People
43 Our People – Executive Committee
45 Our People – Equity, Diversity & Inclusion
50
Impax in the Community
TCFD Report
53
76 Risk Management and Control
80 Engaging with our Stakeholders
Governance
88 Chair’s Introduction
92 Board of Directors
96 Corporate Governance Report
102 Directors’ Report
105 Audit & Risk Committee Report
108 Remuneration Committee Report
Independent Auditor’s Report
Financial Statements
120
129 Consolidated Income Statement
129 Consolidated Statement of Comprehensive Income
130 Consolidated Statement of Financial Position
132 Consolidated Statement of Changes in Equity
134 Consolidated Cash Flow Statement
136 Notes to the Financial Statements
176 Company Statement of Financial Position
178 Company Statement of Changes in Equity
179 Company Statement of Cash Flows
180 Notes to the Company Financial Statements
191 Notice of Annual General Meeting
195 Memberships
196 Alternative Performance Measures
198 Officers & Advisers
Our Mission
“ Investing in the transition to
a more sustainable economy.”
Our Values
Be the solution
A passion for excellence
All voices valued
Doing better together
Building a common future
Read more about Our Values on page 7.
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Section TitlePage Title
Overview
Highlights
02
Impax Asset Management Group plc
Annual Report and Accounts 2022
03
Financial Highlights
AUM1
2021: £37.2bn
Revenue
2021: £143.1m
Shareholders’ equity
2021: £110.5m
Cash reserves3
2021: £70.1m
Adjusted operating profit2
2021: £55.8m
Profit before tax
2021: £45.7m
Adjusted diluted earnings
per share2
2021: 34.4p
Dividend per share4
2021: 20.6p
Business Highlights
of net inflows, well-diversified by
sales channel and by geography
of AUM from clients outside the UK,
reflecting global diversification
largest strategies outperformed
benchmarks over three years.
7/9 with five-year track records
also outperformed5
Overall employee engagement
score, according to annual
employee survey
1 Assets under management and advice as at 30 September 2022. Assets under advice c. 3% of total AUM.
2
Adjusted operating profit and adjusted diluted earnings per share are Alternative Performance Measures. See page 196 for further information and note 4 of the financial
statements for a reconciliation to the IFRS reported results. Prior year adjusted diluted earnings per share has been restated to remove the impact of foreign exchange
losses of £0.9m. Diluted earnings per share calculated in accordance with IFRS is 44.7 pence.
3
Represents cash and cash equivalents, plus cash invested in money market funds and deposit accounts, less cash held in research payment accounts, see page 196
for further information and note 21 of the financial statements for a reconciliation.
4 4.7p per share interim dividend and proposed final dividend of 22.9p per share.
5 Largest strategies by AUM. Gross of fees. For information on benchmarks see pages 22 to 31.
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Why Impax?
04
Impax Asset Management Group plc
Annual Report and Accounts 2022
05
Why Impax?
Authenticity and heritage
We are one of the largest and longest-established
investors dedicated to investing in the transition to
a more sustainable economy. We manage assets for
some of the world’s largest asset owners.
Partnership with our clients
We are committed to outstanding levels of client
service with comprehensive and transparent
reporting. We also continue to evolve our thought
leadership work, stewardship and engagement,
and our ground-breaking impact reporting.
Global distribution
We have successful long-term relationships with
distribution partners in North America, Europe and
Asia-Pacific. We are growing our specialist teams
in the UK and the US servicing institutional and
intermediary clients.
Contributing to the development
of a sustainable society
In line with our mission, sustainability is important
to us. We aspire to run our business in line with
best practices of governance, we focus on diversity
and inclusion, and measure our own environmental
footprint annually. We value our commitment to
community partners who we support both financially
and through direct participation.
CANADA
UNITED STATES
Impax
Commingled
Funds
Distribution partners
Distributed directly
by Impax1
years of specialist
investment experience
EUROPE
ASIA PACIFIC
Distribution partners
Distributed directly
by Impax
Distribution partners
of assets under
management
Our strategic priorities
Deliver superior, risk-adjusted
investment returns
Optimise existing & selectively
launch new strategies
investment team members
(UK, EU, US, HK)
Widen & deepen
distribution channels
Enhance client experience
beyond investment returns
Attract & develop
outstanding team
Increase operational
scalability & efficiency
employees in offices globally
Build insights & advocacy
around transition to a more
sustainable economy
Deliver excellent financials
& sustainable stakeholder value
1 After 31 December 2022 the Pax World Funds become Impax Funds.
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Section Title
Our Philosophy
Mission and Values
06
Impax Asset Management Group plc
Annual Report and Accounts 2022
07
Our Philosophy
Mission and Values
Founded in 1998 by Ian Simm, Impax Asset Management
has pioneered investment in the transition to a more
sustainable global economy and today is one of the
largest investment managers dedicated to this area.
“ Investing in the transition to
a more sustainable economy.”
We believe
that capital markets will be shaped profoundly by global sustainability
challenges, particularly climate change, environmental pollution, natural
resource constraints, demographic and human capital issues such as
diversity, inclusion and gender equity.
These trends will drive growth for well-positioned companies and
create risks for those unable or unwilling to adapt.
Fundamental analysis which incorporates long-term risks, including
environmental, social and governance (“ESG”) factors, enhances
investment decisions.
We invest
in companies and assets that we believe are well positioned
to benefit from the shift to a more sustainable global
economy. We seek higher quality companies with strong
business models and governance that demonstrate
sound management of risk.
We provide
high-quality
investment
solutions for
institutional and
individual investors
We offer
a suite of investment solutions spanning
multiple asset classes, aiming to deliver
superior risk-adjusted returns over the
medium to long term.
Mission Statement
To generate superior,
risk-adjusted investment
returns from opportunities
arising from the transition
to a more sustainable
economy for clients with
a medium to long-term
horizon.
Our Values
To make a contribution
to the development of
a sustainable society,
particularly by supporting
or undertaking relevant
research and engaging or
collaborating with others.
To provide a stimulating,
collaborative and
supportive workplace
for our staff.
BUILDING A
COMMON FUTURE
We have a responsibility to
promote prosperity while
protecting the planet. We
are committed to sustainable
development, and to stewarding
our environmental and societal
impact for the benefit of current
and future generations.
BE THE SOLUTION
Our core focus and motivation
is to offer solutions. It defines
the investment approach we
offer our clients, the contribution
we make to the broader global
community and the attitude we
bring to work each day.
ALL VOICES VALUED
We make better decisions if we
are diverse and inclusive. All
voices are welcomed and all
voices are heard. We aspire to a
dynamic culture that embraces
change and inspires the evolution
of new ideas.
A PASSION FOR EXCELLENCE
We are passionate about our
mission and our work. We strive
for excellence in everything we
do. We hold ourselves to high
standards and trust each other
to share these aspirations and
contribute to the results.
DOING BETTER TOGETHER
We believe we can do far more,
far better, working together as a
team. True collaboration means
treating others as we want to be
treated. We value and respect
our colleagues, clients and
partners, their families and the
wider community. We are all
interconnected and cannot
hope to succeed alone.
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Section Title
Strategic Report
08
Impax Asset Management Group plc
Annual Report and Accounts 2022
09
Strategic
Report
10 Chief Executive’s Report
16 Key Performance Indicators
18 Financial Review
22 Our Investment Strategies
and Performance
32 Beyond Financial Returns
40 Our People
43 Our People – Executive Committee
45 Our People – Equity, Diversity & Inclusion
Impax in the Community
50
53 TCFD Report
76 Risk Management and Control
80 Engaging with our Stakeholders
“ Asset owners continue to
be attracted to Impax’s
specialist focus on the
transition to a more
sustainable economy.”
Ian Simm
Chief Executive
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Page Title
Chief Executive’s Report
10
Impax Asset Management Group plc
Annual Report and Accounts 2022
11
Chief Executive’s Report
“ Our performance
demonstrates the
benefit of our
diversified strategy.”
BUSINESS UPDATE
Impax has delivered commendable results during a year
that started strongly but rapidly developed considerable
external headwinds. Despite weak market sentiment,
fuelled by rising inflation and geopolitical instability, we
continued to attract new business, with total net inflows
of £2.9 billion over the 12 months ending 30 September
2022 (the “Period”) and positive flows in both halves.
Despite attracting additional
clients and subscriptions,
the Company’s assets under
discretionary and advisory
management (“AUM”) fell over the
Period by 4.1% from £37.2 billion
to £35.7 billion, driven principally
by falling markets and negative,
absolute, investment performance.
As of 31 October 2022 the
Company’s AUM had recovered
to £37.4 billion.
For more than two decades we
have built a robust and well-
diversified global client base of
institutional and intermediary
investors and served both
through our own channels and
via trusted distribution partners.
The Company’s performance
during the Period demonstrates
the benefit of this diversified
strategy as asset owners
continued to show their shared
conviction in the medium to long-
term opportunities presented
by the transition to a more
sustainable economy.
Ian Simm
Chief Executive
CHALLENGING
EXTERNAL ENVIRONMENT
Having reached all-time highs
at the end of December 2021,
global equity markets fell, initially
as a result of rising concerns
over inflation, interest rates and
monetary tightening. In late
February, weak sentiment was
exacerbated by Russia’s invasion
of Ukraine, which impacted
investor confidence for more than
seven months of the financial year.
The war has intensified a looming
global energy crisis caused by
structural under-investment and
supply disruption. Policymakers
sought to reduce quickly Europe’s
dependency on Russian gas,
bolstering the secular case for
renewables. Investors shifted
towards value-orientated stocks
such as energy and commodities,
causing the share prices of
companies active in clean energy
and energy efficiency markets to
suffer on both an absolute and
a relative basis: for example, the
FTSE Environmental Opportunities
All-Share Index dropped 28.1%, in
US$ terms, between 1 January and
30 September 2022, compared to
the MSCI ACWI Index, which fell
by 25.6%.
The Inflation Reduction Act was the
most significant piece of climate-related
federal legislation in US history
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Section
12
Impax Asset Management Group plc
Annual Report and Accounts 2022
13
Chief Executive’s Report continued
Meanwhile, evidence of the impact
of climate change on weather
systems continued to build.
During summer in the northern
hemisphere, temperature records
were broken and the global
food crisis was exacerbated by
droughts affecting river basins
from the Yangtse to the Colorado.
Meanwhile, the catastrophic
storms and flooding in Pakistan
and the devastation caused by
Hurricane Ian in the US have
further strengthened the case
for investing in environmental
solutions, especially around
climate adaptation.
Amid nature’s warning signs,
it was encouraging to see the
successful adoption into United
States law of President Biden’s
Inflation Reduction Act.
This was almost certainly the
most significant piece of climate-
related federal legislation in US
history, allocating more than
US$370 billion in incentives
and programmes to accelerate
action on climate and energy
over the next decade.
Its progress on limiting methane
emissions can be seen as one
of the major successes to have
emerged from the COP26 Climate
Conference in Glasgow. At the
COP27 summit in November 2022,
more than 150 countries signed up
to the Global Methane Pledge and
agreed to contribute to reducing
global methane emissions by at
least 30% from 2020 levels by
2030.
INVESTMENT PERFORMANCE
Given the challenging external
environment, many of our
investment strategies, managed by
our teams in the UK, US and Hong
Kong, lagged their benchmarks
over the Period.
Our Environmental Markets
strategies in particular – which
use a “quality growth at a
reasonable price” investment
style – were negatively impacted,
as market sentiment switched
to favour value-oriented stocks.
This led in particular to stronger,
relative performance of the fossil
fuel energy sector, to which
Impax strategies typically have
no exposure.
Movements in the Company’s AUM for the full year
ended 30 September 2022
AUM movement FY to
30 September 2022
Total AUM at 30 September 2021
Net flows
Market movement, FX
and performance
Listed
equities
£m
35,637
2,634
(4,470)
Fixed
income
£m
1,257
62
35
Total AUM at 30 September 2022
33,801
1,354
Private
markets
£m
318
191
12
521
Total
firm
£m
37,211
2,887
(4,423)
35,676
Longer term, eight out of the
largest ten strategies, accounting
for a combined 89% of AUM, have
outperformed their benchmarks
over three years. Of the nine
that have five-year track records,
seven have outperformed their
benchmarks.
A detailed insight into our
investment performance is
included on pages 22 to 31.
After the Period end, we
launched a UCITS fund based on
a new Sustainable Infrastructure
(active) strategy, which seeks
to generate long-term capital
growth with income by investing
in listed equities, while seeking
to avoid the sustainability risks
which dominate the traditional
infrastructure universe, for
example future carbon taxes
on transportation fuels.
Our team investing in privately-
held companies operating in the
renewable generation sector made
eight new investments through our
fourth fund, ranging from a solar
and energy efficiency investment
in Italy to forming a joint venture
partnership with a decentralised
generation specialist to deploy
rooftop solar, battery storage and
smart meters at scale in Germany.
Meanwhile, the team successfully
completed its second exit from the
portfolio of our third fund.
CLIENT SERVICE AND
BUSINESS DEVELOPMENT
We continue to expand the
breadth of our client base, which
is already well diversified by
channel and geography, with 79%
of our AUM coming from clients
outside the UK. We are particularly
focused on strengthening our
direct distribution capabilities
and have appointed new Heads
of Distribution in North America
(October 2021) and in Europe &
Asia-Pacific (June 2022).
Inflows over the Period were
directed particularly into our
Sustainability Lens strategies.
Global Opportunities accounted
for 58.2% of net inflows, driven
principally by our relationship with
St James’s Place in the UK and
by new pension fund mandates
in Australia. The US Large Cap
strategy was responsible for 10.7%
of net inflows, which included
the launch of a fund on Lombard
Odier’s PrivilEdge platform
targeted at European investors.
Of our thematic Environmental
Markets strategies, Leaders and
Climate received the greatest
investor interest, and were
responsible for 10.7% and 8.9%
of net inflows respectively. This
included two new Climate strategy
mandates in the US and China
during the first half of the Period.
From our intermediaries,
consultants, and distribution
partner channels, amongst
others, we also saw positive flows
via Principal Global Investors
and a private bank in the US,
Formuepleje in Denmark, and
Fidante in Australia.
Our efforts to increase our direct
distribution led to positive flows
into our own-label fund ranges.
Our Ireland-based UCITS fund
range saw net inflows of £150
million, with AUM at £1.9 billion at
the Period end, and our investment
trust, Impax Environmental
Markets plc, registered net inflows
of £50 million.
The AUM of US-based Pax
World Funds grew by 4% to
£6.4 billion, including net inflows
of £669 million.
After the Period end, we
announced that the Pax World
mutual fund range would be
renamed under the Impax brand,
becoming the Impax Funds,
effective 31 December 2022. By
renaming the mutual funds while
keeping the underlying portfolios
and investment processes
unchanged, we are emphasising
Impax’s unified investment
approach, offering a consistent
brand globally and avoiding
confusion in the marketplace.
BEYOND FINANCIAL RETURNS
During the Period, we extended
our ‘Beyond Financial Returns’
programme, an approach to
enhancing our investment
outcomes and client reporting with
activity focused in four areas.
First, our corporate engagement
and stewardship activity aims to
improve our understanding and
management of investment risk.
In 2021 we took part in 204
engagements, while in 2022
we were proud to become a
signatory to the UK Stewardship
Code, a step that requires the
demonstration of robust processes
in this area.
Second, we disclose through our
annual impact report the quantified
environmental and social benefits
linked to our clients’ investments in
our portfolio companies. This year
we have evolved our reporting to
include inter alia a fixed income
strategy, and added metrics on
social impact.
Third, we strive to influence
policy outcomes that support
solutions to environmental and
social challenges. We prioritised
four areas during the Period:
financing the transition to net-
zero emissions; greening the
financial system; biodiversity; and
human capital, including equity,
diversity and inclusion as well as
the response to COVID-19. We
collaborate closely with a broad
network, including the scientific
community, industry bodies, and
not-for-profit organisations.
Finally, we continue to publish
research that provides insights
to our clients and partners. Our
work this year included a report
on the investment case for
sustainable infrastructure and
articles on the implications of
US policy developments, including
the Inflation Reduction Act.
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SectionPage Title
14
Impax Asset Management Group plc
Annual Report and Accounts 2022
15
Chief Executive’s Report continued
CLIMATE AND THE COMMUNITY
We are pleased this year to include
our first report that describes
how we manage climate risks and
opportunities, using the Taskforce
for Climate-related Financial
Disclosures (“TCFD”) framework.
Impax has been supportive of the
TCFD reporting recommendations
since it was established.
We have also expanded our
community activity during
2022. In addition to building
our relationships with existing
charitable partners, Ashden,
ClientEarth, Ceres and Diversity
Project, we are now supporting
Toigo, an organisation in the US
focused on equity, diversity &
inclusion. Separately, our colleagues
voted that our new “Community
Cause of the Year”, coordinated
by our Volunteering Group, should
focus on food scarcity. We plan
to grow our community support
further next year.
IMPAX’S CHIEF FINANCIAL
OFFICER
Charlie Ridge, who has been
Impax’s Chief Financial Officer
since 2008, recently signalled his
wish to retire and will step down
from this role in January 2023. On
behalf of my colleagues, I would
like to extend my sincere thanks
to Charlie for his outstanding
leadership of our Finance team and,
until 2021, our Corporate Services
teams, and for his excellent
contribution to communicating
with our shareholders over the
past 14 years.
1 Full-time equivalent.
I’m very pleased to report that,
upon Charlie’s retirement, Karen
Cockburn will become Impax’s
Chief Financial Officer in January
2023. Karen, who joined Impax
as CFO Designate last month, is a
highly experienced professional,
whose career includes spells
in banking, insurance, wealth
management and digital platforms.
She will lead the Finance function,
including Investor Relations,
have oversight of Governance
arrangements and the Legal
function, and will be a member
of Impax’s Executive Committee.
ATTRACTING AND
DEVELOPING OUR TALENT
Karen is just one of the many
outstanding colleagues that we
have welcomed recently. Over the
Period we grew our headcount
by 26%,1 opened a new office
in Manhattan and welcomed 21
summer interns to Impax as part of
our first global internship scheme.
We now conduct our global
employee engagement survey
annually. This year, the overall
engagement score, which reflects
staff satisfaction and commitment,
was in the top decile of our peer
group. Our colleagues continue to
tell us that they feel closely aligned
to Impax’s purpose and values, in
particular our focus on sustainable
development. Our staff turnover
remains low relative to peers.
The People team continues to
build the systems, processes
and resources that we require
as we scale and grow.
This has included providing
additional training and
development opportunities for
our colleagues and reviewing
our employee benefits to make
sure they are in line with market
practice. Following a review where
we worked with independent
external advisers, we are rolling
out an updated remuneration
framework, including encouraging
clearer objective setting and
providing more clarity on the
link between performance and
pay outcomes.
SYSTEMS AND INFRASTRUCTURE
We are paying particular
attention to ensuring that our
Corporate Services functions are
appropriately scaled to support
the expansion of our investment
and distribution capabilities. In the
context of our current business
plan, we have developed further
our IT platform, and are expanding
and globalising our compliance
team and risk function.
AWARDS AND INDUSTRY
RECOGNITION
Impax continues to be recognised
for our leadership within the
investment management industry.
After the Period, we were named
as “ESG Manager of the Year” by
Financial News. Highlights during
the Period included Pensions Age’s
“Active Manager of the Year” and
“Listed Equities Manager of the
Year” at Environmental Finance’s
Sustainable Investment Awards.
KEITH FALCONER AND DAVID LI
In May this year, we received the
very sad news that Keith Falconer
had died unexpectedly at the age
of 67. Keith played an integral role
in Impax’s growth during his time
as Chairman from 2004 until 2020.
In particular, his long experience of
distribution helped us to raise our
level of ambition as we sought to
extend our reach outside Europe.
But above all, Keith was a kind,
warm and generous person: the
Impax leadership team benefitted
greatly from his encouragement
and sage advice.
In October 2022, we were also
devastated to hear that our friend
and colleague, David Li had died
suddenly at the age of just 51.
David joined Impax in 2007 as
our first colleague in the Asia-
Pacific region and co-managed
our Asian Environmental and
Asian Opportunities strategies,
together with Oscar Yang. David
was a valued leader and mentor
of the Asia-Pacific team, a
talented portfolio manager and
a generous and warm person
with a gentle humour.
OUTLOOK
Looking ahead to 2023, we face
the prospect of a sharp drop in
consumer confidence associated
with spiralling energy and food
prices and higher costs of
borrowing. The growing cost-of-
living crisis will create severe social
challenges requiring a significant
response from policymakers.
Inflationary pressures are expected
to continue to create challenges
for companies unable to reflect
rising costs in price increases. For
this reason, our investment teams
remain focused on companies
with strong market positions and
pricing power that should be more
resilient during this period.
For companies exposed to the
transition to a more sustainable
economy, the current environment
is also providing positive tailwinds.
Over the longer term, we expect
the rise in input prices to drive
an increased focus on energy-
and resource-efficiency, and to
accelerate the shift to diversify
energy supplies and decarbonise
economies. At a policy level,
energy security concerns are likely
to remain high, further prioritising
the shift away from fossil fuels,
while pressure on investors to
demonstrate climate resilience
and protect ecosystems are also
likely to grow in prominence.
Although market volatility is
likely to remain elevated, robust
companies with correctly
designed business strategies
should continue to benefit.
Regulation should also provide
a tailwind. Regulators are
increasingly examining the
appropriate use of “ESG” and
sustainability-related terms in the
promotion of investment products.
We believe these proposals and
rules will broadly be helpful in
reducing “greenwashing” and
those investment managers that
have robust practices in this area
should benefit from additional
demand from asset owners.
2023 will also mark Impax’s
25-year anniversary. Since our
inception, it has become even
clearer that global sustainability
challenges, combined with
disruptive forces in technology,
policy, and consumer preferences,
are creating transformations
on the scale of the Industrial
Revolution across all sectors of the
global economy. This is creating
mispricing of capital and growth
opportunities for well-positioned
companies and increased risks for
companies that do not adapt.
Asset owners continue to be
attracted to Impax’s specialist
focus on the transition to a more
sustainable economy. We remain
confident in our ability to respond
to this increased client demand.
While continuing to expand our
current strategies and develop new
products, we have the capacity to
significantly grow our assets under
management using our existing
investment platform.
With a quarter century of
experience, our authenticity and
heritage, our institutionally focused
client-base, and our commitment
to delivering value for clients
beyond financial returns, make
us well positioned to continue to
provide long-term benefits for all
our stakeholders.
Ian Simm
Chief Executive
29 November 2022
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SectionPage Title
Key Performance Indicators
16
Impax Asset Management Group plc
Annual Report and Accounts 2022
17
Key Performance Indicators
AUM1
AUM represents our total assets under management and advice.
The movement between opening and closing AUM provides an
indication of the overall success of the business during the year
in terms of both net subscriptions and investment performance.
It also provides a good lead indicator of revenue and profitability.
Revenue
Revenue represents the fees we have
earned for services provided in the year.
Adjusted operating profit2
Adjusted operating profit reflects the performance of our core
business. It takes into account our operating efficiency, investments
made to grow our business and how we reward and retain our staff.
2022: AUM was down
by 4.1% to £35.7 billion.
2022
2021
2020
2019
2018
£35.7bn
£37.2bn
£20.2bn
£15.1bn
£12.5bn
2022: Revenue grew by
22.6% to £175.4m.
2022
2021
2020
2019
2018
£175.4m
£143.1m
£87.5m
£73.7m
£65.7m
2022: Adjusted operating profits
grew by 20.8%.to £67.4m.
£67.4m
£55.8m
2022
2021
2020
2019
2018
£23.3m
£18.0m
£20.0m
We use a number of key performance indicators (“KPIs”) to measure
our financial performance. This year we delivered strong growth
for the majority of our KPIs.
Adjusted operating margin2
Adjusted operating margin is a profitability ratio that shows how
much profit we make in relation to our total revenue.
Adjusted diluted earnings per share2
Adjusted diluted earnings per share (“EPS”) reflects the overall financial
performance of the Company for the year and takes into account the
dilutive effect of our share option and restricted share awards.
Dividend
The Company’s dividend policy is to pay between 55% and 80% of
adjusted profit after tax. The Board is recommending a final dividend
of 22.9 pence per share bringing total dividend per share to 27.6
pence.4 This represents growth of 34.0% and is the 14th consecutive
year that we have grown the dividend.
2022: Adjusted operating margin
was down marginally to 38.4%.
2022
2021
2020
2019
2018
38.4%
39.0%
26.6%
24.4%
30.4%
2022: Adjusted diluted EPS grew
to 42.1 pence in line with the
increased adjusted profits.
42.1p
34.4p3
2022
2021
2020
2019
2018
14.5p
11.5p
12.4p
2022: Growth of 34% and the
14th consecutive year that we
have raised the dividend.
27.6p
20.6p
2022
2021
2020
2019
2018
8.6p
5.5p
6.7p5
1 Assets under management and advice as at 30 September 2022. Assets under advice c. 3%.
2 This is an Alternative Performance Measure – see page 196 for definition and calculation.
3 This year the impact of foreign exchange gains and losses on intercompany loans and other unrealised foreign exchange gains and losses that are not linked to the performance
of the Group have also been removed. Prior year adjusted diluted earnings per share has been restated to remove the impact of the equivalent foreign exchange losses of £0.9m.
4 Proposed.
5
Includes special dividend of 2.6p.
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Section
Financial Review
18
Impax Asset Management Group plc
Annual Report and Accounts 2022
19
Financial Review
“ I am pleased
to report another
year of strong
financial results.”
Charlie Ridge
Chief Financial Officer
I am pleased to report another
year of strong results despite
challenging market conditions,
including growth in adjusted
operating profit of 20.8%.
As in previous periods, in
order to facilitate comparison
of performance with previous
time periods and to provide an
appropriate comparison with
our peers, the Board encourages
shareholders to focus on financial
measures after adjustment for
accounting charges or credits
arising from the acquisition
accounting from Impax NH,
adjustments arising from the
accounting treatment of National
Insurance costs on share based
payment awards and significant
tax credits related to prior periods.
This year we have also made an
adjustment to remove certain
foreign exchange gains and losses.
The same adjustment has been
made to the prior year’s reported
numbers. Further information on
the adjustments made and on the
other alternative performance
measures reported is provided on
page 196. A reconciliation of the
International Financial Reporting
Standards (“IFRS”) and adjusted
numbers is provided in Note 4 of
the Financial report.
This also marks my final Report
and Accounts as CFO. My time
at Impax has been fulfilling and
exciting and I hand over the
role to a superb successor in
Karen Cockburn.
FINANCIAL HIGHLIGHTS FOR FINANCIAL YEAR 2022 VERSUS FINANCIAL YEAR 2021
AUM1
Revenue
Adjusted operating profit2
Adjusted profit before tax2
Adjusted diluted earnings per share2
Cash reserves2
Seed investments
Dividend per share3
IFRS operating profit
IFRS profit before tax
IFRS diluted earnings per share
2022
£35.7bn
£175.4m
£67.4m
£68.4m
42.1p
£107.0m
£7.3m
2021
£37.2bn
£143.1m
£55.8m
£54.9m4
34.4p4
£70.1m
£7.5m
4.7p interim + 22.9p final
3.6p interim + 17.0p final
2022
£65.2m
£72.6m
44.7p
2021
£47.4m
£45.7m
30.3p
1 Assets under management and advice as at 30 September 2022.
2 This is an Alternative Performance Measure – see page 196 for definition and calculation.
3 Proposed.
4 Restated to remove the impact of foreign exchange losses of £0.9m.
REVENUE
Revenue for the Period grew by
£32.3 million to £175.4 million
(2021: £143.1 million). Growth was
driven by the positive net inflows
across the business seen in the
current and prior year, offset
in part by market falls during
the Period.
The weighted average run
rate revenue margin remained
consistent with 2021 at 46 basis
points. Our run-rate revenue1,
which is based on the Period end
AUM, fell to £166.2 million (2021:
£173.8 million).
1
This is an Alternative Performance Measure –
see page 196 for definition and calculation.
OPERATING COSTS
Adjusted operating costs
increased to £108.0 million (2021:
£87.3 million), mainly reflecting
a full year of costs from hires
made in 2021 as well as further
hires made during the Period to
support the Group’s current and
projected growth. We expect costs
to increase further in the next
financial year as a result of inflation
and further investment in the
Group’s infrastructure and people.
IFRS operating costs include
additional charges and credits,
principally the amortisation of
intangible assets arising on the
Impax NH acquisition and National
Insurance charges and credits on
share options and restricted shares.
Employer’s National Insurance
is payable based on the share
price when an option is exercised
or restricted shares vest and
accordingly a credit has been
recognised as our share price has
fallen over the year. This credit
is offset by the reversal of a tax
credit which is recorded in equity.
PROFITS
Adjusted operating profit increased
to £67.4 million (2021: £55.8
million), driven by the revenue
growth described above. Run-rate
adjusted operating profits at the
end of the Period was £54.3 million
(2021: £67.5 million). IFRS operating
profit in 2022 increased to £65.2
million (2021: £47.4 million).
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Section
20
Impax Asset Management Group plc
Annual Report and Accounts 2022
21
Financial Review continued
Including adjusted net finance
income of £0.9 million (2021:
adjusted net finance losses of
£0.9 million) gives adjusted profit
before tax of £68.4 million (2021:
£54.9 million (restated)). IFRS
profit before tax of £72.6 million
(2021: £45.7m) includes foreign
exchange gains of £6.4 million
(2021: foreign exchange losses of
£0.9 million) on the retranslation
of intercompany loans and other
unrealised foreign exchange gains
and losses that are not linked to
the performance of the Group.
TAX
Tax rates were higher than the
prior period as we benefited in the
prior year from a £2.8 million credit
in relation to taxation of prior
years’ private equity income.
EARNINGS PER SHARE
Adjusted diluted earnings per
share grew to 42.1 pence (2021:
34.4 pence (restated)) as a
result of the growth in profits.
IFRS diluted earnings per share
increased to 44.7 pence (2021:
30.3 pence).
FINANCIAL MANAGEMENT
At the Period end the Company
held £107.0 million of cash
resources, an increase of £36.9
million on 2021. The Company
had no debt (2021: no debt).
The Company continues to make
seed investments and to invest
in our private equity funds.
These investments were valued
at £7.3 million at the Period end.
SHARE MANAGEMENT
The Board will consider purchasing
the Company’s shares from time
to time after due consideration
of alternative uses of the
Company’s cash resources. Share
purchases are usually made by the
Group’s Employee Benefit Trust
(“EBT”) (subject to the trustees’
discretion), using funding
provided by the Company.
During the Period, the EBT
purchased 1.1 million ordinary
shares. The EBT holds shares
for Restricted Share awards
until they vest or to satisfy
share option exercises.
“ The total dividend for the
year has increased by 34%
reflecting our strong results and
strengthening balance sheet.”
At the Period end the EBTs held
a total of 3.3 million shares,
2.5 million of which were held for
Restricted Share awards leaving up
to 0.8 million available for option
exercises and future share awards.
There were 2.7 million options
outstanding at the Period end, of
which 0.7 million were exercisable.
No new shares were issued during
the Period.
DIVIDENDS
The Company paid an interim
dividend of 4.7 pence per share in
July 2022. Our dividend policy is
to pay, in normal circumstances,
an annual dividend within a range
of 55% and 80% of adjusted profit
after tax. Impax has reported
strong growth in revenue and
profits and is in good financial
health. The Board has therefore
decided to recommend a final
dividend of 22.9 pence. This would
be an increase in the total dividend
for the year of 7.0 pence or 34%.
The total dividend for the year
represents 65% of our adjusted
profit after tax which is in the
middle of our stated range.
This dividend proposal will be
submitted for formal approval by
shareholders at the Annual General
Meeting on 16 March 2023. If
approved, the dividend will be paid
on or around 21 March 2023.
The record date for the payment
of the proposed dividend will
be 10 February 2023 and the
ex-dividend date will be
9 February 2023.
The Group can also preserve
cash through dividend reduction
and through issuance of shares
to cover share option exercises/
restricted share awards (rather
than purchasing shares). The
Directors therefore have a
reasonable expectation that the
Group has adequate resources to
continue in operational existence
for the foreseeable future and
have continued to adopt the going
concern basis in preparing the
financial statements.
Charles D Ridge
Chief Financial Officer
29 November 2022
The Company operates a
dividend reinvestment plan
(“DRIP”). The final date for receipt
of elections under the DRIP will
be 28 February 2023. For further
information and to register and
elect for this facility, please visit
www.signalshares.com and
search for information related
to the Company.
GOING CONCERN
The Financial Reporting Council
requires all companies to perform
a rigorous assessment of all the
factors affecting the business
when deciding to adopt a “going
concern” basis for the preparation
of the accounts.
The Board has made an
assessment covering a period of
at least 12 months from the date
of approval of this report which
indicates that, taking account of
a reasonably possible downside
in relation to asset inflows, market
performance and costs, the Group
will have sufficient funds to meet
its liabilities as they fall due for
that period. The Group has high
cash balances and no debt and,
at the Period end market levels, is
profitable. A significant part of the
Group’s cost base is variable as
bonuses are linked to profitability.
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SectionPage Title
Our Investment Strategies
and Performance
22
Impax Asset Management Group plc
Annual Report and Accounts 2022
23
Our Investment Strategies and Performance
At Impax, every investment strategy is designed to
intentionally allocate clients’ capital towards a more
sustainable economy. Each is underpinned by
proprietary investment tools.
THE INVESTMENT TEAM
Listed equities
Impax’s listed equities strategies
are managed by a team of
portfolio managers and research
analysts, headed by Bruce Jenkyn-
Jones, Chief Investment Officer,
Listed Equities, who has been at
Impax for over two decades. This
team manages the Environmental
Markets, Gender Lens and
Sustainability Lens strategies,
excluding the latter’s fixed income
strategies. Members of the team
also manage Impax’s Systematic
Equities strategies.
Fixed income
Impax’s fixed income strategies,
which use the Impax Sustainability
Lens, are managed by a US-
based team of portfolio managers
and credit analysts. Like their
counterparts in the Listed
Equities team, they are supported
by colleagues in the Impax
Sustainability Research team.
Private markets
The private markets business is
headed by Daniel von Preyss, who
has been with Impax for over 10
years. The UK-based team includes
professionals focused on asset
management and transactions.
AUM by Investment Strategy
(£ billion)¹
£35.7bn
Total AUM
Environmental Markets £22.8bn
Sustainability Lens £10.7bn
Systematic Equities / Other £2.2bn
1
As at 30 September 2022. Assets under advice represent
~3% of total AUM. Total of asset classes may differ due to
rounding. Multi-Asset strategies’ AUM is included within
the underlying strategy.
Environmental Markets strategies
We believe high growth
investment opportunities
will continue to derive
from population dynamics,
resource scarcity,
inadequate infrastructure
and environmental
constraints.
Our thematic Environmental
Markets strategies invest in
companies that address several
long-term macroeconomic
themes including growing
populations, rising consumption
and the depletion of limited
natural resources.
Our strong conviction is that
these powerful drivers will
create above-average growth
for a large, rapidly expanding,
diverse set of companies. Our
rigorous investment process
seeks to invest in higher quality
companies that demonstrate
sound management of risk within
strong business models. We
research a well-defined investment
universe for each strategy, then
construct portfolios that reflect a
combination of strong conviction
and high prospective upside. We
map our views on valuations,
policy, country-specific outlooks
and regulation, given the general
macroeconomic environment.
We also undertake an in-depth
integrated review of risk using
Environmental, Social and
Governance (“ESG”) criteria
as part of our stock analysis.
As illustrated on page 25, our
Environmental Markets strategies
all underperformed their
respective benchmarks during
the Period. This was driven by the
underperformance of ‘growth’
stocks whose valuations have
been particularly affected by
the concerns that have driven
an overall decline in global
stockmarkets: higher inflation and
interest rates, slowing economic
growth and the Russian invasion
of Ukraine. Inflation has led
centrals banks – led by the US
Federal Reserve – to tighten
monetary policy. Rising interest
rates have reduced the perceived
attractiveness of ‘growth’ stocks,
as prospective future cash flows
are valued at less today given
the higher discount rate. The
dramatic rotation out of ‘quality’
and ‘growth’ stocks and into more
value-oriented sectors such as
energy was a headwind for our
strategies, as many of our holdings
are businesses aligned with long-
term secular growth trends.
Over the three and five-year
periods ending 30 September
2022, most Environmental Markets
strategies continued to outperform
their benchmarks, however.
In the face of a challenging global
equities market, we generated
net inflows into most of our
Environmental Markets strategies
during the Period. Only the
Water strategy faced a material
net outflow (£0.3 billion), though
this represented only 4% of the
strategy’s AUM at the start of
the Period.
Among our Environmental Markets
strategies, Leaders attracted the
largest net inflows during the
Period (£0.3 billion). Our Leaders
strategy invests globally in
companies developing innovative
solutions to resource challenges in
the key areas of new energy, water,
waste and resource recovery, and
sustainable food and agriculture.
This strategy invests only in
companies that generate at least
20% of their revenue from these
environmental markets. In practice
this exposure is much higher and
hovers around 55%.
Our US Environmental Leaders and
Asian Environmental strategies
follow the principles and approach
of our Leaders strategy but only
invest in the US and the Asia-
Pacific region, respectively. The
former had very strong inflows
during the Period, with net inflows
equivalent to 19% of the strategy’s
AUM at the start of the Period.
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Section
24
Impax Asset Management Group plc
Annual Report and Accounts 2022
25
Our Investment Strategies and Performance continued
Environmental Markets strategies continued
Our Specialists strategy invests
in ‘pure play', small and mid-
cap companies that generate
more than 50% of their
underlying revenue from sales
of environmental products or
services, though actual exposure
for this strategy is typically around
80%.
Our Climate strategy added two
new mandates from clients in US
and China. This strategy, which
also includes a fund managed for
BNP Paribas Asset Management
(“BNPP AM”), invests in companies
with demonstrable exposure to
products and services enabling
mitigation of climate change or
adaptation to its consequences.
Impax has managed a dedicated
Water strategy on behalf of BNPP
AM since 2008. This fund invests
in companies with operations
related to the water value chain,
including treatment, purification,
infrastructure and municipal
services.
A NEW STRATEGY: SUSTAINABLE INFRASTRUCTURE (ACTIVE)
We believe that investing in sustainable, inclusive and resilient
infrastructure has never been more critical, creating a growing
spectrum of long-term investment opportunities. As the backbone
of the modern economy, our global infrastructure assets and
services must be aligned with the transition to a more sustainable
economy.
After the Period end, in October 2022, we announced the launch of
the Impax Listed Infrastructure Fund based on our new Sustainable
Infrastructure (active) strategy. The strategy seeks to generate
long-term capital growth with income, whilst seeking to avoid the
sustainability risks which dominate the traditional infrastructure
universe. Its performance benchmark is the MSCI ACWI Index.
The Fund meets the classification of Article 9 under Sustainable
Finance Disclosure Regulation (SFDR).
We also manage a Sustainable Food strategy, which includes funds
for BNPP AM, that invests globally in companies that are making food
production more sustainable. While it underperformed the MSCI ACWI
Index during the Period, principally due to its structural underweight
exposure to the Financials sector, this strategy has continued to attract
net inflows. Looking ahead, we believe that the growing focus on a more
sustainable, equitable food system will be a long-term tailwind for the
strategy driven by rising populations, evolving consumer preferences,
regulatory tightening and resource scarcity.
PERCENTAGE RETURNS FOR ONE, THREE AND FIVE YEARS FOR
ENVIRONMENTAL MARKETS STRATEGIES VERSUS BENCHMARK1 (GBP)
Leaders3
Water
Specialists
Climate
Sustainable Food
MSCI ACWI Index2
Asian Environmental
MSCI Asia Composite Index2
US Environmental Leaders
MSCI USA Index2
AUM
£7.2 billion
£5.5 billion
£3.5 billion
£2.7 billion
£1.3 billion
AUM
£1.4 billion
£276 million
Cumulative, GBP, gross of fees
1YR
-11.3%
-8.6%
-13.5%
-14.0%
-10.1%
-4.2%
1YR
-16.1%
-12.5%
-3.1%
-0.5%
3YR
26.5%
33.7%
38.4%
34.9%
12.7%
23.3%
3YR
23.5%
4.9%
39.3%
37.6%
5YR
49.5%
64.1%
62.6%
n/a
29.0%
49.4%
5YR
34.9%
15.4%
n/a
n/a
These figures refer to the past. Past performance is not a reliable indicator of future results. The value of
investments can fall as well as rise and you may get back less than you have invested.
1 All data is in GBP as at 30 September 2022. In line with market standards, the strategy returns are calculated including the dividends re-invested, net of
withholding taxes and gross of management fees.
2 MSCI indices are total net return (net dividend re-invested). MSCI AC AP Composite is a custom-made benchmark made up of 80% MSCI AC Asia-Pacific ex-Japan
and 20% MSCI Japan, rebalanced daily.
3 A hybrid account is not included in the Total AUM of this strategy and the AUM of this account is £886m. Impax Asset Management claims compliance with Global
Investment Performance Standards (GIPS)®. GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organisation, nor does it
warrant the accuracy or quality of the content contained herein. Further information on composite data is available on request.
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SectionPage Title
26
Impax Asset Management Group plc
Annual Report and Accounts 2022
27
Our Investment Strategies and Performance continued
Sustainability Lens strategies
The Impax Sustainability
Lens translates our
investment beliefs into
a practical investment
tool that helps our teams
identify the winners
and avoid the losers in
the transition to a more
sustainable economy.
We believe that the transition
provides a compelling rationale
to construct high-conviction,
low-turnover equities portfolios
that are well positioned to
achieve long-term capital growth.
LISTED EQUITIES
We launched Global Opportunities
in January 2015 as an all-cap
global equities strategy. It has
outperformed its benchmark
(MSCI ACWI Index) by 31
percentage points over the five-
year period ending 30 September
2022 and has consistently
generated net inflows.
In 2018, St James’s Place Wealth
Management selected the strategy
for its Sustainable and Responsible
Equity Fund. The strategy
underperformed during the Period,
like many growth-oriented equities
strategies, as central bank action
to contain inflation resulted in
weaker global stock markets.
Our Asian Opportunities strategy,
launched in 2021, leverages
the proven process behind our
Global Opportunities strategy to
invest regionally in Asia-Pacific
companies. Both strategies
are focused on companies
possessing sustainable competitive
advantages in order to achieve
superior earnings growth and
long-term capital growth.
Our US Large Cap and US Small
Cap strategies also have a regional
focus within the Sustainability
Lens universe. While the US
Large Cap portfolio (which has
more exposure to growth stocks)
underperformed the S&P 500
Index for the Period, the US
Small Cap strategy outperformed
its benchmark.
A DRIVER OF NET INFLOWS
Listed equities Sustainability
Lens strategies accounted for
the majority of net inflows
during the Period.
Global Opportunities – now
the largest Impax strategy by
AUM (£7.5 billion) as at 30
September 2022 – generated
new inflows of £1.7 billion
during the Period.
Both the US Large Cap and
US Small Cap strategies
also generated double-digit
percentage inflows relative
to their AUM. US Large Cap
received net inflows of £308
million, equivalent to 29.6% of
the strategy’s AUM as at the
start of the Period.
net inflows into the
Global Opportunities strategy
FIXED INCOME
Our fixed income strategies
also use the Sustainability Lens
to identify higher opportunity
and lower risk sub-sectors in
their investment universes. Our
proprietary ESG research adds
fundamental insight that enhance
their risk management process.
A significant portion of the Core
Bond strategy portfolio is allocated
to impact bonds that promote
positive environmental and social
outcomes, including green bonds,
community and international
development notes, and other
investments that support climate
change mitigation, sustainable
infrastructure, affordable housing,
education and gender equality.
We remain encouraged by
investor interest in the Core Bond
strategy, which received double-
digit percentage net inflows over
the year.
Over the Period, Core Bond was
slightly ahead of its benchmark
in a challenging year of rising
interest rates. The High Yield
strategy also delivered positive
returns but underperformed
its benchmark. Both strategies
outperformed for the three-year
and five-year periods ending
30 September 2022.
PERCENTAGE RETURNS FOR ONE, THREE AND FIVE YEARS FOR
SUSTAINABILITY LENS STRATEGIES VERSUS BENCHMARK1 (GBP)
Global Opportunities
MSCI ACWI2
US Large Cap
S&P 5003
US Small Cap
Russell 20004
AUM
£7.5 billion
Cumulative, GBP, gross of fees
1YR
-7.3%
-4.2%
3YR
30.8%
23.3%
5YR
80.3%
49.4%
£1.3 billion
-0.2%
51.1%
108.3%
2.1%
39.7%
86.9%
£532 million
-6.0%
-7.6%
28.2%
25.2%
46.9%
43.1%
High Yield Bond
£582 million
2.6%
8.2%
30.0%
ICE BofA US Cash Pay High
Yield Constrained (BB-B)5
4.3%
7.9%
29.6%
Core Bond
£661 million
4.1%
1.4%
20.6%
Bloomberg Barclays
US Aggregate6
3.2%
0.0%
18.6%
These figures refer to the past. Past performance is not a reliable
indicator of future results. The value of investments can fall as well
as rise and you may get back less than you have invested.
1 All data in GBP as at 30 September 2022. In line with market standards, the strategy returns are calculated
including the dividends re-invested, net of withholding taxes and gross of management fees.
2 MSCI index is total net return (net dividend reinvested).
3 S&P 500 Index is an unmanaged index of large capitalisation common stocks.
4 The Russell 2000 Index is an unmanaged index and measures the performance of the small-cap segment
of the U.S. equity universe. The Russell 2000 Index is a subset of the Russell 3000 Index representing
approximately 10% of the total market capitalisation of that index. It includes approximately 2000 of the
smallest securities based on a combination of their market cap and current index membership.
5 The ICE BofAMerrill Lynch U.S. High Yield BB-B (Constrained 2%) index tracks the performance of BB-and
B-rated fixed income securities publicly issued in the major domestic or Eurobond markets, with total index
allocation to an individual issuer limited to 2%.
6 Bloomberg Barclays U.S. Aggregate Bond Index represents securities that are U.S. domestic, taxable
and dollar denominated. The index covers the U.S. investment grade fixed rate bond market, with index
components for government and corporate securities and asset-backed securities. Cumulative percentage
returns. Impax Asset Management claims compliance with Global Investment Performance Standards
(GIPS)®. GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote
this organization, nor does it warrant the accuracy or quality of the content contained herein. Further
information on composite data is available on request.
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SectionPage Title
28
Impax Asset Management Group plc
Annual Report and Accounts 2022
29
Our Investment Strategies and Performance continued
Gender Lens strategies
We manage one of the
leading gender-focused
strategies in North
America, investing in
companies that invest
in women.
A growing arsenal of research
shows that companies with a
greater proportion of women
in leadership roles than their
peers tend to have higher returns
on capital, greater innovation,
increased productivity and
higher employee retention
and satisfaction.
The Impax Global Women’s
Leadership Index, launched in
2014, was the first index of its kind
globally, comprising the highest-
rated companies in the world for
advancing women on boards and
in executive management.
To construct the index, our
dedicated Gender Analytics team
rates companies on multiple
criteria of gender leadership. The
400-plus companies that place in
the top quartile on these factors
are among the best in the world
for promoting and advancing
gender diversity.
The AUM of our Gender Lens
strategies was £693 million
at the end of the Period. The
strategy has underperformed
its benchmark, the MSCI World
index, largely because some stocks
that outperformed during the
Period were laggards on gender
diversity, and so not investable.
This includes many energy and
materials companies as well as
some technology firms. However,
our style bias toward companies
that invest in women continues to
make a positive contribution to
the Global Women’s Leadership
strategy’s performance over the
longer term.
Multi-Asset strategies
Our Multi-Asset strategies
include exposure to all
of Impax’s investment
approaches. They offer
investors diversification
across a variety of US
equities, US fixed income,
developed non-US equities
and global thematic
investment via a risk-
focused asset allocation
strategy.
The Pax Sustainable Allocation
Fund, founded in 1971, was the
first public mutual fund in the US
to choose investments based on
not only financial criteria but also
social and environmental factors.
It has since evolved into a
multi-asset fund-of-funds.
Although relative performance
during the Period was below the
median in its peer group of similar
multi-asset strategies, the Fund
maintains strong longer-term
performance. Over three and five
years the Fund sits within the top
25% of this group.
Systematic Equities strategies
Private Markets strategies
Our US Sustainable
Economy, International
Sustainable Economy and
Systematic Sustainable
Infrastructure strategies
are all informed by the
Sustainability Lens.
The systematic process uses filters
and analytical insights developed
over our 20+ year history to
optimise portfolio exposure to
higher-opportunity sub-sectors
and companies and minimise
exposure to sub-sectors and
companies that face higher risks
in the transition to a more
sustainable economy.
We are pleased in particular with
client interest in the International
Sustainable Economy strategy,
which invests in non-US developed
market companies we believe are
positioned to benefit from this
transition. During the Period, the
strategy received net inflows of
£177 million (equivalent to 29% of
its AUM at the start of the Period).
The Private Equity/
Infrastructure team follows
an industrially focused,
value-add strategy,
investing in renewable
power generation,
including solar, onshore
wind, small-scale
hydropower and adjacent
sectors.
In September 2022, Impax
admitted five more investors from
the UK and Europe into our fourth
fund, Impax New Energy Investors
IV. This is part of a second rolling
close with these five investors
committing an initial €35.3m.
After the Period end, On
31 October 2022 Impax welcomed
a sixth investor from Europe
into the second part of the
rolling second close, bringing an
additional €20m of capital.
The current fourth fund portfolio
comprises eight investments in six
countries across four technologies,
ranging from a solar and energy
efficiency investment in Italy, to
forming a joint venture partnership
with a decentralised generation
specialist to deploy rooftop solar,
battery storage and smart meters
at scale in Germany. While the
team invests predominately in
Europe, it recently entered a new
geography, having made its first
investment in the US with an
experienced solar developer with
an established track record.
In 2022, the team also successfully
exited our 77MW French ground-
mounted solar portfolio in our
third fund, Impax New Energy
Investors III.
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Impax Asset Management Group plc
Annual Report and Accounts 2022
31
Our Investment Strategies and Performance continued
Impax New Energy Investors III portfolio
Impax New Energy Investors IV portfolio
MAP KEY
Battery storage asset
Wind assets in operation
Wind pipeline1
Exited solar assets1
Solar pipeline1
Hydro assets in operation/construction
Hydro pipeline1
Development team
0MW
+
320MW
Operations / Construction / Exited
+
RTB / late-stage dev /
permitted / further pipeline
78MW
+
40MW
46MW
+
14MW
110MW
142MW
+
c.770MW
0MW
+
c.650MW
38MW
+
c.990MW
0MW
+
10MW
1
“Pipeline” encompasses ready-to-build (“RTB”), late-
stage development and permitted assets as well as the
wider pipelines of our existing development platforms.
90MW
+
500MW
MAP KEY
Wind pipeline
Solar pipeline
Energy efficiency pipeline
Storage pipeline
Development team
55MW
+
500+MW
Construction/Engineering business
Advanced / Operating
+
Total MW capacity (gross)
121MW
+
1,000+MW
0MW
+
500+MW
75MW
+
500+MW
105MW
+
200+MW
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SectionPage Title
Beyond Financial Returns
32
Impax Asset Management Group plc
Annual Report and Accounts 2022
33
Beyond Financial Returns
By intentionally
allocating our clients’
capital towards areas of
the market that are
providing solutions to
sustainability challenges,
we support the positive
environmental impacts
delivered by our
portfolio companies.
Since our foundation in
1998, Impax has pioneered
investment in the transition to
a more sustainable, low-carbon
global economy. We invest
in companies that we believe
are well positioned to benefit
as we make this transition,
demonstrating that these can be
sound long-term investments and
so lowering the cost of capital for
companies delivering a positive
impact through their products
and services.
We proactively engage with our
portfolio companies, both to help
us determine how companies
understand and perceive their
own risks and opportunities, and
to improve how we price these in
our investment decision-making
process. Effective engagement also
provides an avenue for us to add
value by encouraging companies
to better manage their risks and
to highlight issues that we believe
pose the greatest challenges to
them arising from the transition
to a more sustainable economy.
Impax is proud to be a signatory
to the UK Stewardship Code,
which sets high stewardship
standards for those investing
money on behalf of UK savers and
pensioners, and those that support
them. As a successful applicant
again in 2022, we demonstrated
our commitment to stewardship.
Our integration of ESG factors
in the investment process has
also been recognised.
We have received very strong
marks from the UN-backed
Principles for Responsible
Investment (“PRI”) in the most
recent 2021 PRI Assessment
Report. Under a new scoring
system, Impax was awarded
at least 4 out of 5 stars across
all applicable categories. The
highest score of 5 out of 5 stars
was awarded for two categories:
investment and stewardship
policy, and private equity. Areas
for improvement, such as ESG
reporting and climate scenario
analysis, have been bolstered
significantly since the original
May 2021 submission.
The authenticity of impact,
ESG and stewardship claims in
financial services is coming under
increased regulatory and industry
scrutiny in all of our key markets.
This year we have established a
multidisciplinary working group
to coordinate reporting on
“Beyond Financial Returns” across
the firm, responding to client
demand, regulatory requirements
and reflecting our voluntary
commitments. We have continued
to develop our approach through
our own research and in response
to feedback from our stakeholders.
Our impact reporting expands
again this year to include another
of our Environmental Markets
strategies, US Environmental
Leaders, which was launched
in 2019. We also include impact
reporting for our actively managed
Sustainable Infrastructure strategy
based on model portfolio holdings,
in advance of its launch in Autumn
2022, after the Period end.
We are also pleased to have
reported, for the first time, on the
impact linked to one of Impax’s
fixed income portfolios, Core
Plus Bond. In another first, this
reporting includes two metrics
for the portfolio’s positive social
impact: educational loans and
affordable housing units financed.
Of course, the impact data we can
report is predominantly based on
metrics reported by our portfolio
companies, although we can
estimate impact metrics where
there is robust industry data.
While corporate measurement and
disclosure is improving, it remains
patchy and inconsistent, especially
beyond carbon reporting. We
continue to make the case for
stronger reporting through our
company engagements. In turn,
we expect this will enable us to
continue improving the breadth
and depth of our impact reporting
to clients over time.
IMPACT
At Impax, the investment
strategies we manage are
designed to intentionally allocate
clients’ capital towards those
companies we expect to benefit
as the global economy transitions
to a more sustainable model. Our
impact reporting shows how this
intention is translated into action.
For each investment strategy, we
consider its specific investment
objectives when identifying the
most relevant impact metrics
to measure and report on.
We are pleased to again
demonstrate, in our Impact @
Impax 2022 report, that most
Impax strategies – through the
products and services of the
companies in which they invest
– deliver a beneficial net CO2
impact, avoiding more greenhouse
gases than they emitted during
the measurement period. We
have detailed our approach to
measuring climate impact within
our TCFD Report (see page 53).
We have continued to expand our
reporting to include additional
strategies and metrics, including
for social impact as well as for
environmental impact.
Additional environmental impact
metrics include renewable energy
generated, water treated, saved
or provided, materials recovered,
and waste treated. In the case
of our Asian Environmental
strategy, we also measure coal
use displaced in Asian cities
(see pages 34 and 35).
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Section
34
Impax Asset Management Group plc
Annual Report and Accounts 2022
35
Beyond Financial Returns continued
ENVIRONMENTAL IMPACT PER US$10M INVESTED BY STRATEGY IN 2021
Asian Environmental*
Total materials
recovered/waste treated
Total renewable
electricity generated
Recovered/treated
990 tonnes
1,870 MWh
Generated
Provided, saved
or treated
Climate**
Leaders**
Equivalent to
3,440
households’
waste output
for a year
90 tonnes
100
households
450 tonnes
480
households
Total water provided,
saved or treated
100 megalitres
Equivalent to
770
households’ water
consumption
for a year
Equivalent to
940
households’
electricity
consumption
for a year
180
households
190 MWh
50
households
2,570
households
100 megalitres
640
households
220
households
270
households
3,210
households
These figures refer to the past. Past performance is not a reliable indicator of future results.
Impax impact calculations are based on strategy AUM and portfolio holdings as at 31 December 2021.
*
Asian household equivalencies: average annual China household electricity usage of 1.96 MWh (source: Impax calculations, based on electricity usage per capita data
from BNEF (2021) and average household size data from ArcGIS (2021)); average annual China household water usage of 162,936 litres (source: Impax calculations,
based on water usage per capita data from Statista (2022) and average household size data from ArcGIS (2021)); average annual China household waste of 236kg
(source: Impax calculations based on UK equivalencies, due to a lack of data, and adjusted using a GDP per capita ratio).
Specialists**
210 tonnes
980 MWh
500 megalitres
New Energy**
Sustainable Food**
Total materials
recovered/waste treated
Total renewable
electricity generated
Recovered/treated
490 tonnes
60 MWh
Generated
Provided, saved
or treated
Equivalent to
520
households’
waste output
for a year
250
households
Total water provided,
saved or treated
700 megalitres
Equivalent to
4,490
households’ water
consumption
for a year
100 megalitres
240
households
Water**
1,200 tonnes
370 MWh
2,400 megalitres
1,270
households
100
households
15,410
households
Equivalent to
20
households’
electricity
consumption
for a year
120 MWh
10
households
25,155 MWh
6,990
households
**
UK household equivalencies: average annual UK household electricity usage of 3.6 MWh (source: Department for Business, Energy & Industrial Strategy, 2022); average
annual UK household water usage of 155,760 litres (source: Impax calculations, based on water usage data from South West Water (2022) and average household size
data from the Office for National Statistics (2022)); average annual UK household waste of 942kg (source: Impax calculations based on data from the Department for
Environment, Food & Rural Affairs (2021) and average household size data from the Office for National Statistics (2022)).
*** US household equivalencies: average annual US household electricity usage of 10.7 MWh (source: US Energy Information Agency, 2022); average annual US household
water usage of 414,500 litres (source: Impax calculations, based on water usage data from the US Environmental Protection Agency (2022), the US Geological Survey
(2022) and The World Counts (2022)); average annual US household waste of 2,116kg (source: Impax calculations based on data from the US Environmental Protection
Agency (2019) and average household size data from the US Census Bureau (2021)).
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400 megalitres
US Environmental
Leaders***
520 tonnes
SectionPage Title
36
Impax Asset Management Group plc
Annual Report and Accounts 2022
37
Beyond Financial Returns continued
We believe that being able to measure how water
impacts companies, and how they impact water at
the local level, is vital for investors’ understanding
of water-related risks and opportunities.
ALIGNMENT WITH THE UN
SUSTAINABLE DEVELOPMENT
GOALS
The UN Sustainable Development
Goals (“SDGs”), agreed in 2015,
comprise a series of 17 sets of
targets to be met by 2030. Impax
clients may seek to assess how
their investments align to the
SDGs, as a means of measuring
their impact.
We therefore map Impax’s
strategies to the SDGs to indicate
their level of alignment with
this framework. We do so by
identifying the proportion of
portfolio companies’ revenues
related to activities described by
the targets within each Goal.
Impax’s investment process does
not identify alignment with SDGs
as a specific objective. Instead,
the nature of Impax’s investment
philosophy results in meaningful
exposure to the SDGs as a by-
product of the investment process.
Expanding our reporting to fixed income
The transition to a more sustainable economy is creating new
risks and opportunities in fixed income markets. This results in
growing opportunities for investors to finance positive social
and environmental outcomes through bond investments. Unlike
investments in equities, which are inherently tied to general
corporate activities, investments can be made in specific issuances
of fixed income securities where the proceeds are directed towards
a pre-defined use.
In addition to green, social and sustainability-labelled bonds
with assurance of the use of proceeds, there is a breadth of fixed
income securities, including asset-backed and mortgage-backed
securities, that are linked to various environmental and social
impact themes. Impax’s expertise in assessing the authenticity of
these instruments in delivering environmental and social benefit
materially widens the opportunity set from bonds with third
party assurance.
We manage a Core Plus Bond portfolio which seeks to finance
affordable housing, community development, development
finance, education, environment and energy projects, gender
equality, sustainable infrastructure and sustainable products and
services. We believe that quantifying the positive environmental
and social impact of the portfolio demonstrates the importance of
bond issuance as a source of capital driving sustainable finance.
It can also reassure investors that the intention behind a bond
issuance is being followed through.
Portfolio company revenue alignment to the UN Sustainable Development Goals by strategy
Asian Environmental
Climate
Leaders
Specialists
Sustainable Food
US Environmental Leaders
Water
Asian Opportunities
Global Opportunities
US Large Cap
US Small Cap
Core Plus Bond
New Energy
Sustainable
Infrastructure (active)
These figures refer to the past. Past performance is not a reliable indicator of future results. Please note that individual revenue alignment numbers may not add up
to strategies’ respective total SDG revenue alignment numbers due to rounding.
Impax impact calculations are based on strategy AUM and portfolio holdings as at 31 December 2021. Figures are based on Impax internal data.
Data for the Impax Active Sustainable Infrastructure represents underlying holdings of proposed strategy. Actual holdings and therefore impact data may vary and
should not be relied upon.
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Impax Asset Management Group plc
Annual Report and Accounts 2022
39
Beyond Financial Returns continued
Positive engagement outcomes
Engagement
Impax undertook
Company engagements in 2021
Impax is committed to helping companies
navigate the transition to a more sustainable
economy. In so doing, we aim to mitigate risks
and enhance opportunities for our clients.
WHY WE ENGAGE
Engagement helps us both
mitigate risk and enhance value
and investment opportunities. The
Impax investment process relies on
a comprehensive understanding
of the character and quality of
its investee companies, including
material ESG issues as well as
areas of potential improvement.
We believe it is in the interests
of our clients that we engage
with our investee companies
to help minimise risks, support
and enhance shareholder value,
promote greater transparency
on ESG issues and encourage
companies and issuers to become
more resilient over time.
HOW WE ENGAGE
Our engagement work takes
the following forms:
• Direct and colloborative
engagement and shareholder
resolutions
• Proxy voting
• Public policy advocacy
Each year we engage with a
significant percentage of our
portfolio companies in our
equities and fixed income
investment portfolios. During
calendar year 2021, Impax
conducted 204 company
engagements. These were both
bottom-up engagements – where
we engage having identified
specific company and issuer-
specific matters and risks – and
top-down engagements that
reflect topics or areas that are
our engagement priorities.
Our four primary focus areas for
engagement areas during the
Period have been:
• Climate
• Corporate governance
• Human capital management,
including equity, diversity and
inclusion (E,D&I)
• Sustainability risk management
PROXY VOTING
Strongly linked to our engagement
work is our voting activity. Impax
is committed to ensuring the
consistent exercise of voting
rights associated with shares held
in investment mandates, where
proxy voting has been delegated
to us. Through the implementation
of the proxy voting policy, Impax
aims to enhance the long-term
value of its shareholdings, foster
corporate governance best
practices and promote greater
accountability and transparency
in its investee companies.
We are delighted that in 2021, for
the second year in row, responsible
investment charity ShareAction
ranked Impax’s voting record
first out of 65 asset managers
on shareholder proposals on
environmental and social issues.1
Our Engagement and Policy
Advocacy Report 2022 outlines
the outcomes of our proxy voting
activities in calendar year 2021, as
well as key shareholder proposals
that we filed or co-filed.
We have detailed our approach
to climate risk management,
engagement and proxy voting
within our TCFD Report (see
page 65).
1
ShareAction, 2021: Voting Matters 2021. The report
examined how 65 of the world’s largest asset
managers voted in 2021 across 146 social and
environmental resolutions. ShareAction believes that
proxy voting is a core part of an asset manager’s
fiduciary duty and a key way in which the sector can
influence companies on social and environmental
issues. ShareAction is a not-for-profit working
to build a global investment sector that takes
responsibility for its impacts on people and planet.
47%
of engagements with a
positive outcome1 in 2021
39%
of engagements where
‘progress achieved’
8%
of engagements where
‘milestone achieved’
13%
of engagements achieved a positive
outcome that we believe was largely
driven by Impax’s efforts
1 Positive outcomes are classified as “progress achieved” or “milestone achieved” as assessed by Impax against engagement objectives.
POLICY AND ADVOCACY
This year we have again enhanced
our focus on policy and advocacy,
through which we make our voice
heard with policymakers. We
believe it is crucial for investors to
participate closely in the design
of public policy and we strive to
influence policy outcomes that
support the growth of market
solutions to environmental and
social challenges.
We are active across a range of
channels ranging from traditional
reactive approaches – working
through industry associations,
responding to consultations
and participating in issue-
specific initiatives and sign-on
letters – to more innovative,
proactive interventions such as
publishing Impax’s perspectives
and commentaries, funding
research, piloting new approaches,
partnering with clients, and
bilateral discussions with
policymakers.
• Greening the financial system:
ensure that climate risks and
opportunities are integrated into
investment decisions through
effective implementation of the
TCFD recommendations
• Nature and biodiversity loss:
Our four priorities for policy
advocacy during 2021 were:
• Achieving net-zero emissions in
the real economy: urge national
governments to adopt net-zero
goals and ambitious nationally
determined contributions
(NDCs), underpinned by sectoral
pathways and dialogues with
investors on detailed policies
needed to attract private capital
improve understanding of risks
of biodiversity loss and nature
degradation and accelerating
action by policy and investors
to restore nature
• Human capital: support the
development of proposals
for consistent, comparable,
and decision-useful corporate
disclosures on employees’
gender, race and ethnicity
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Our People
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Impax Asset Management Group plc
Annual Report and Accounts 2022
41
Our People
We are focused
on developing the
organisation for
the next stage
of its growth.
Employee growth1
2022
2021
2020
2019
2018
272
216
175
155
140
A HIGH-PERFORMANCE
ENVIRONMENT
In a year where we welcomed
many new team members into the
Company, we continued our focus
on developing our organisation to
embrace the next stage of growth.
Our top priorities addressed hiring
and onboarding outstanding
people, developing and retaining
our talent, and supporting an
effective and empowering culture
in which our colleagues feel able
fully to contribute.
We hear from colleagues that they
appreciate Impax’s collaborative
and high-performance
environment that balances
productivity and their wellbeing.
In a competitive market for talent,
the opportunity to work for a
company that is wholly focused on
the transition to a more sustainable
economy is a strong attraction for
our people.
RAPID GROWTH AND
INTERNATIONAL EXPANSION
We continued to hire at an
accelerated rate, building our team
to 2721 at the end of the Period,
an increase in the employee
population of 26%. In the US,
we were pleased to open our
Manhattan, New York office in
May 2022.
1 Full-time equivalent.
Employee engagement survey
We now conduct our employee engagement survey annually.
This year we achieved an overall engagement score of 89% – up
1 percentage point from 2021 and 7 points ahead of the industry
benchmark – based on a 95% employee response rate.
This resulted in Impax once again winning a 5-star employer
rating from WorkBuzz, the survey organiser.
“I am proud to
work for Impax”
96%
10 points ahead of
benchmark of 86%
“I’m motivated to
do my best work”
87%
1 point ahead of
benchmark of 86%
“Corporate
citizenship and
sustainability are core
to Impax’s culture”
94%
2 points ahead of
benchmark of 92%
“I would
recommend
Impax as a great
place to work”
90%
9 points ahead of
benchmark of 81%
“I understand
Impax’s mission,
culture and values”
96%
4 points ahead of
benchmark of 92%
“Impax operates
to the highest ethical
standards across
all its operations”
93%
2 points ahead of
benchmark of 91%
DEVELOPMENT: EQUIPPING
OUR PEOPLE FOR SUCCESS
We provide development
opportunities to all of our people,
including those on a fixed-term
basis and contractors.
This year we provided a more
targeted approach to employee
development by segmenting
offerings by groups. We
introduced a ‘manage my career’
workshop series to those early
in their career journey, and for
those new to management
we delivered our Emerging
Managers Programme where a
cohort of 16 learned the building
blocks of leading others. For
more experienced leaders, we
completed a pilot programme
on Leadership Self-Awareness.
We continue to promote
development at all levels of the
organisation including at senior
levels, recognising the importance
of role modelling from the top. 60
of our senior leaders participated
in an intensive workshop focusing
on collaborative leadership,
courageous conversations, and
constructive candour.
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Impax Asset Management Group plc
Annual Report and Accounts 2022
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Our People continued
Our People – Executive Committee
Our People – Executive Committee
During the Period we had an
employee turnover of 10%, while
11% of the team celebrated
a promotion. 65% of these
promotions were women.
Early careers: Global
Internship Programme
As part of our focus on building
a pipeline of future talent, our
first global internship scheme
welcomed 21 paid interns, working
across a range of disciplines and
on real business research projects.
We were pleased to provide
ongoing opportunities to five
interns at the end of the scheme.
We continued our participation
in the 10,000 Black Interns
programme.
Rigour and reward: scaling our
culture for future growth
We undertook a review of our
existing compensation framework
with support from an independent
remuneration consultant, the results
of which we communicated to all
colleagues in September 2022.
Our refreshed approach, which
will be implemented in full in
2023, is intended to ensure that
we continue to attract and retain
exceptional talent and future-proof
our performance management
approach globally in line with our
growth plans.
The improvements to our pay
and performance process include
clearer guidance and consistency
around how we set objectives
and assess performance through
performance scorecards and
performance evaluation, more
clarity around pay expectations
including notional target bonus
ranges, more tailored market
benchmarks for certain roles,
clear eligibility criteria for equity
schemes and more detail on how
performance at a business and
individual level will be reflected in
pay outcomes. See page 108.
Setting the business up for
success: Impax 2025
During the Period our “Impax
2025” project was a significant
cross-company initiative to
integrate the contribution and
plans of all teams as part of our
broader strategy, culminating
in a Global Senior Leaders
conference in June 2022. 60
leaders discussed external market
drivers, opportunities for improved
collaboration and efficiencies and
how better to serve our clients.
Raising concerns
We promote openness in our
culture and regularly provide
training on conduct and the values
of responsibility and integrity. This
includes reminding colleagues
of the different ways that they
can raise any concerns of a more
serious nature, including formal
processes and via an anonymous
whistleblowing hotline, provided
by an external provider.
IAN SIMM
Founder &
Chief Executive
CHARLIE RIDGE
Chief Financial Officer
KAREN COCKBURN
Chief Financial Officer
Designate
JOSEPH KEEFE
President,
North America
BRUCE JENKYN-JONES
Chief Investment Officer,
Listed Equities
CHARLES FRENCH
Deputy Chief Investment
Officer, Listed Equities
HUBERT AARTS
Deputy Chief Investment
Officer, Listed Equities
DANIEL VON PREYSS
Head of Private Equity/
Infrastructure
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Impax Asset Management Group plc
Annual Report and Accounts 2022
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Our People – Executive Committee continued
Our People – Equity, Diversity & Inclusion
Our People – Equity, Diversity & Inclusion
E,D&I is
central to Impax’s
philosophy, values,
and mission
ED FARRINGTON
Head of Distribution,
North America
PAUL VOÛTE
Head of Distribution,
Europe & Asia-Pacific
LISA BEAUVILAIN
Head of Sustainability
& ESG
MEG BROWN
Chief Product &
Marketing Officer
CATHERINE BREMNER
Chief Strategy &
Operations Officer
DARREN JOHNSON
Chief Operating Officer
MARY ALEXANDER
Chief People Officer
ZACK WILSON
Group General Counsel
1 As of April 2022.
Equity, diversity, and inclusion
(“E,D&I”) is central to Impax’s
philosophy, values, and mission.
Impax’s view of diversity is
intentionally broad and includes,
but is not limited to, gender,
race, ethnicity, sexual orientation,
disability, culture, religion, age, and
social background – as well as the
importance of intersectionality
across these dimensions. Impax
has a deep appreciation of the
positive impact that diversity in all
its richness has on its people, the
Company’s culture, organisational
integrity and success, and its
communities.
Impax’s E,D&I vision is to continue
to build an inclusive, equitable
culture where everyone feels
they belong, are valued as an
individual, and can thrive –
bringing all aspects of themselves
to work. Impax remains focused
on increasing the diversity of its
employees, especially at senior
levels, and committed to pay
equity, including by gender.
Impax has made strong progress
in executing this strategy over
the past year – key highlights are
outlined overleaf.
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Our People – Equity, Diversity & Inclusion continued
GOVERNANCE AND
ACCOUNTABILITY
Our E,D&I Group is responsible for
Impax’s strategy in this area and
reports regularly to the Board.
It is sponsored by Ian Simm,
Chief Executive, and Joe Keefe,
President, Impax North America,
with Lindsey Brace Martinez as its
Non-Executive Director sponsor.
The E,D&I Group meets regularly
to align on ideas, actions and
progress, and to communicate
feedback from colleagues.
Impax has articulated two specific
E,D&I goals for December 2025:
• That Impax’s overall workforce
gender mix should be circa 50%
(48–52%) women
• The representation of women
and racial/ethnic minorities in
senior management, portfolio
management, and client-facing
roles should meaningfully
exceed relevant industry
averages in Impax’s primary
locations (UK and US)
We have also set E,D&I goals
in managers’ objectives and
performance evaluations.
TALENT ATTRACTION
AND RETENTION
To ensure Impax is seeking
candidates from all backgrounds
and objectively evaluating
the Company’s processes to
understand and monitor trends
throughout the hiring process,
Impax has:
• Ensured a solid foundation
is in place for reducing bias
in the recruitment process
by examining language in
job descriptions, including
subscribing to an AI tool to help
identify bias in job descriptions
and other HR materials
• Developed a set of questions
across eight behavioural
competencies to eliminate bias
in the interview process to the
extent possible
• Launched a GDPR-compliant
applicant tracking system,
allowing the Company to collect
demographic information on
candidates and track progress
throughout the recruitment
process
DEMOGRAPHICS
AND PROGRESSION
Understanding our demographics
and sharing this information with
our stakeholders is a key pillar of
our E,D&I strategy to make sure
that we are finding diverse talent
to help Impax and our clients
thrive, we are seeing diversity
in advancement across the firm,
and we are creating an inclusive
workforce at all levels of our
organisation. Impax conducts an
annual demographic survey for
all staff as well as collecting and
reporting on data from new hires
on an ongoing basis. We analyse
these changes year-on-year and
report to senior management and
the Board on progress against
our goals.
GENDER PERSPECTIVE
As at April 2022, based on a
headcount of 235 employees,
48% of employees were women
and 52% men. This compares
to 46% women to 54% men in
April 2021. Female representation
has increased across all levels
compared to the previous year and
65% of the promotions we made
this year were women.
Our gender pay gap analysis,
which compares median base
pay of men and women across
all positions in three groups –
junior staff, mid-level staff and
senior staff – shows that the
median gaps at mid- (2.7%) and
senior (1.9%) levels have reduced
significantly year-on-year (12.7%
and 16.1% respectively in 2021). This
reflected several new female hires,
particularly in the senior band.
However, the median gender pay
gap at the junior level (12.9%) has
increased compared to the prior
year (5.3%). While median junior
salary levels have gone up overall,
the median pay gap at this level
has widened due to the higher
proportion of men in higher-
paying roles.
As part of our overall E,D&I
strategy, we remain focused on
increasing the number of women
in our business, especially at
senior levels, and to the continued
examination of in-level pay
differences, including using robust
external pay benchmarking data.
Ethnicity overview, 2022
Total Company
14%
6% 5%
74%
1%
Board
Exec Committee
7%
Investment team
19%
2%
Promotions
19%
8%
100%
86%
79%
73%
Hires
20%
14%
4%
62%
Asian
White
Black
Additional ethnic groups1
Prefer not to disclose Race/Ethnicity
7%
Gender overview, 2022
Total Company
Board
49%
43%
50%
57%
Exec Committee
20%
73%
7%
Investment team
36%
62%
Promotions
65%
Hires
49%
35%
51%
Female
Male
Prefer not to disclose gender2
1%
2%
Gender progression3
2022
2021
2020
48%
46%
45%
Female
Male
52%
54%
55%
INCLUSION, EDUCATION
AND ENGAGEMENT
Increasing inclusivity and
communications around E,D&I
is a top priority for Impax. As an
example, in January 2022 Impax
leveraged internal and external
networks to launch a speaker
series for employees to broaden
E,D&I inclusion, education and
awareness.
PARTNERSHIPS AND
SOCIAL IMPACT
Impax partners with organisations
that spotlight the unique
challenges faced by women and
minorities within the investment
industry, and is an active member
of the Diversity Project, which has
led to the Company’s sponsorship
and participation in the City Hive
and #TalkAboutBlack mentorship
scheme, including the 10,000
Black Interns programme. These
initiatives aim to help make
progress towards addressing the
gender and ethnicity gaps within
the investment management
industry and wider society.
1
Self-reported, anonymous data collected after Period end in November 2022. Conducted by third
party, with a 92% response rate. Due to Impax’s size and our focus on protecting employees’ privacy
and individually identifiable data, Impax’s race and ethnicity categories with relatively few respondents
have been aggregated for the purposes of external data reporting. As such ‘Additional ethnic groups’
represent Hispanic or Latinx, Middle Eastern, North African, Two or More Races or Mixed Heritage, and
other identities that staff have self-identified.
2
Self-reported, anonymous data collected after Period end in November 2022. For the purposes of
external data reporting ‘Non-Binary’ and ‘Prefer not to disclose gender’ have been combined.
3 Data as of April in the respective year.
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Impax Asset Management Group plc
Annual Report and Accounts 2022
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Our People – Equity, Diversity & Inclusion continued
Gender by job level1
Senior staff
33%
67%
Mid-level staff
Junior staff
57%
57%
Female
Male
43%
43%
Gender pay gap – median base salary gap1
Senior staff
1.9%
Mid-level staff
2.7%
Junior staff
5.3%
2021
2022
1 Data as of April 2022.
16.1%
12.7%
12.9%
LEAD SPONSORSHIP OF
CITY HIVE CROSS COMPANY
MENTORSHIP PROGRAMME
We announced our lead
sponsorship of the City Hive
Cross Company Mentorship
Programme in association
with #TalkAboutBlack in
September 2021. In our role
as a lead sponsor, we aim
to make progress towards
addressing the gender and
ethnicity gaps within the
investment management
industry and wider society.
Impax colleagues took
part in the scheme and we
funded four mentor/mentee
places from other businesses
in the investments and
savings industry.
INVESTMENTS
Impax invests in companies that are well positioned to benefit from the
transition to a more sustainable economy, including companies that are
leaders on human capital issues such as equity, diversity and inclusion.
Impax is a pioneer in gender lens investing.
E,D&I is a core part of Impax’s investment and engagement process,
through consideration of diversity indicators in the Company’s
fundamental ESG research, established track record of principled proxy
voting, and successful company and public policy engagements on
E,D&I issues. For example, Impax withholds votes from companies that
it believes lack sufficient diversity on their boards, and the Firm engages
with the companies in its investment portfolios to press for greater
diversity on company leadership teams and equal pay for all staff.
of promotions this year were women
Engagement Case Study:
The Walt Disney Co
In May 2022, Impax met with Disney to learn about recent human capital and equity, diversity and
inclusion efforts at the company since our last engagement call in 2021. The engagement was held
after the annual meeting, which saw a pay gap reporting shareholder proposal win majority support
from shareholders. (This was also the topic of an Impax-sponsored shareholder proposal in 2020, which
Impax withdrew after the company committed to publishing EEO-1 data and to assign accountability for
workplace equity.) The meeting provided an opportunity to gain insight into the company’s approach
to returning to the office post-COVID and employee engagement, and the complexities of managing
a large, diverse workforce. Impax provided feedback on new disclosures over the last year and
considerations for future disclosures.
In September 2022, Disney published its adjusted pay data by race and gender for first time. Its analysis
showed that women are paid nearly identical to men, and Asian, Black and Hispanic workers are all paid
nearly the same as White workers. The company also committed to additional disclosure over time,
including with respect to unadjusted pay data.
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Impax in the Community
Our community strategy is underpinned by our mission statement,
“...to make a contribution to the development
of a sustainable society by supporting or
undertaking relevant research and engaging
or collaborating with others.”
Our approach is built on three
pillars:
• Working with strategic
community partners
• Delivering a high-impact
approach to volunteering and
charitable donations
• Engaging with colleagues to
promote wellbeing and support
Impax’s culture
COMMUNITY PARTNERSHIPS
We partner with organisations
with shared principles that
can collaborate with us on the
transition to a more sustainable
economy, working within the areas
of environment and human capital.
Ashden
Ashden champions climate change
solutions worldwide through
its annual awards. Impax has
supported the Ashden Award
for Energy Innovation in the UK
for the nearly a decade; working
in partnership with the Ashden
team, a group of Impax colleagues
is involved in the judging and
submission process to shortlist
entrants. This year we welcomed
2021 winners, Kensa Group, to
share their story as part of our
regular as part of our “Brown Bag”
internal series.
Ceres
Ceres is the leading US NGO
addressing the world’s greatest
sustainability challenges through
collaborations with leaders in
business, government and finance.
Impax has partnered with Ceres
for more than nine years as part
of the Ceres Investor Network.
Impax’s support enables the
Ceres research team to have their
voice heard within the investment
community and by the public.
This partnership over the Period
has supported several major
projects: notably, the Ceres team’s
new strategy to aid fiduciaries in
assessing and mitigating Portfolio
Climate Risk. Ceres also published
new research into the sustainable
investment best practices of
more than a dozen leading
global institutional investors, and
publicised and popularised these
findings in subsequent conferences
and presentations.
ClientEarth
Impax’s support for ClientEarth
is in its seventh year. A non-profit
environmental law organisation,
ClientEarth’s team of lawyers fight
the systems which restrict the
planet’s freedom, using the power
of the law to create lasting impact
and drive systematic change to
protect the earth. They advise
decision-makers on policy, train
legal and judicial professionals
and launch legal interventions.
Diversity Project
Diversity Project is a UK-based
cross-company membership
organisation focused on
improving the diversity and
inclusion within investment
management through building
a more inclusive culture. We
participate in the Diversity
Project Board, the CEO Advisory
Board, Steering Committee, and
#TalkAboutBlack workstream.
We champion Diversity Project
initiatives throughout the year,
encouraging our colleagues to
take part in cultural milestones
to celebrate, commemorate
and promote E,D&I within the
organisation and we network
across the Diversity Project
community to promote best
practice. See page 47 for more
information.
Toigo
We entered a partnership with
US-based non-profit Toigo in
September 2022. Toigo aims
to improve the diversity of the
financial services industry by
increasing leadership presence
of individuals from underserved
communities. We will partner with
Toigo through involvement in
their career connections events,
internship support services and
talent support.
VOLUNTEERING AND GIVING
During the Period we launched
our global Community Cause of
the Year, with Impax colleagues
voting for Food Scarcity. All Impax
employees are given paid leave to
volunteer and were encouraged to
volunteer with regular campaigns
throughout the year at our local
food scarcity charities: Neighbor
to Neighbor in Greenwich, CT,
Food Cloud in Dublin, Food Angel
in Hong Kong, Felix Project via
FareShare in London and Gather
in Portsmouth, NH. In total,
colleagues volunteered 923 hours
during the Period.
All Impax colleagues have access
to matched giving schemes in the
UK, US, Ireland, and Hong Kong.
Globally, Impax matched £56,361
of colleagues’ charitable giving.
Impax has been awarded a Gold
Quality Mark from Give As You
Earn for its participation in the UK
giving scheme, with participation
at 21% for the Period.
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TCFD Report
Impax in the Community continued
Mindful Movement
Mindful Movement is our annual community wellbeing and
inclusion initiative, now in its third year, which encourages
Impax colleagues to prioritise their wellbeing. The campaign ran
throughout September culminating in Mindful Movement Day on
23 September. The global campaign involved Impax colleagues
with in-person events across all Impax locations. 21 London-based
colleagues took part in the Yorkshire Three Peaks Challenge. The
Dublin team kayaked to Dalkey Island, our Hong Kong team hiked
the Lo Fu Tau Country Trail, and the New Hampshire team offered
a Nature walk at the Great Bay National Wildlife Refuge.
WELLBEING AND EMPLOYEE
ENGAGEMENT
Our community approach
seeks to unite Impax colleagues
from wherever they are based
and empower them outside
of their day-to-day roles to
contribute to a more sustainable
economy. We offer employee
engagement activities throughout
the year from each of our
four colleague-driven groups:
Environment; E,D&I; Wellbeing;
and Volunteering.
ENVIRONMENT GROUP
The Environment Group launched
a speaker series with Impax
colleagues, where senior leaders
explored the history and context
of environmental investing and
launched a new Book Club to
share ideas within the Impax
community.
For more information on the
Environment Group’s role, see
the TCFD Report (page 58).
Taskforce on Climate-related Financial
Disclosures (“TCFD”) Report 2022
The purpose of this report is to disclose how we identify,
assess and manage the exposure of our business and
our clients’ investments to climate-related risks and
opportunities, as well as our strategic resilience to
climate risks.
Impax Asset Management Group
plc’s (“Impax”, or the “Company”)
is pleased to publish this, its first
Taskforce on Climate-related
Financial Disclosures (“TCFD”)
report, alongside the Company’s
Annual Report and Accounts. This
report covers the same 12-month
period from 1 October 2021 to 30
September 2022 (“the Period”).1
In addition to UK government
requirements, the FCA has made it
a requirement for many regulated
firms, including those within the
Company’s group, to publish
TCFD-aligned climate disclosures
on their website, with effect from
1 January 2023 and with the first
reports due by 30 June 2024,
under ESG 2.1 in the FCA Rules.
While not in scope of this
requirement yet, the Company
has decided to produce its first
group TCFD report ahead of FCA
expectations to demonstrate
its support for the disclosures.
This report is therefore being
produced on a best-efforts basis
and we intend to further develop
our disclosures under the FCA’s
regime when relevant group legal
entities fall under the reporting
requirement.
Impax was among the inaugural
signatories to TCFD in 2017 and
has regularly provided updates in
line with TCFD recommendations
in our responses to CDP (Carbon
Disclosure Project), PRI (Principles
for Responsible Investment)
and other investor initiatives.
Transparency as to how companies
and investors are addressing
these risks and opportunities is
important to shareholders, clients,
employees, regulators and other
stakeholders. The publication of
this report fulfils a commitment
made in our 2021 Annual Report
and Accounts and is aligned
with our mission of investing
in companies that we believe
are well positioned to benefit
from the transition to a more
sustainable economy.
Impax believes that climate risk is a critical sustainability
challenge, and that climate-related risks and opportunities
are likely to be significant drivers of investment
performance for large parts of the global economy
over the decades to come.
1 Data relating to Impax’s engagement activities and impact reporting cover the 2021 calendar year.
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In line with the TCFD’s recommendations, this report comprises four interrelated sections:
Governance
Governance
Impax’s governance structure
around climate-related risks
and opportunities
Strategy
The actual and potential impacts
of climate-related risks and
opportunities on Impax’s
business and strategy
Risk management
The processes in place to
identify, assess and manage
climate-related risks
Metrics and targets
The metrics and targets used to
assess and manage climate-related
risks and opportunities
Each of these sections covers both our business operations and, more critically, the investments we manage
on behalf of our clients. While we can lead by example by reducing our own environmental impact, we
believe that climate-related risks and opportunities are of much greater relevance to our core business
activities as an investment manager specialising in the transition to a more sustainable economy.
1 Data relating to Impax’s engagement activities and impact reporting cover the 2021 calendar year.
The nature of Impax’s business and its investment
philosophy mean that the management of climate-
related and broader sustainability-related risks and
opportunities is a strategic focus for the Company.
Management and monitoring
of climate-related risks and
opportunities, including
implementing the TCFD
recommendations, is delegated to
senior management, specifically
the Executive Committee.
Senior management is represented
on investment committees, which
oversee the Company’s investment
activities, investment performance
and risk management, and
regularly address climate-related
issues. In addition, Impax also has
specialist committees dedicated
to climate and related issues,
most notably the Sustainability
Lens Committee and the ESG
Policy Committee.
The Private Markets division has
its own Investment Committee
and ESG Sub-Committee.
The Board has requested that
climate risk be formally recorded
on the Company’s enterprise
risk register, making it subject
to independent oversight and
assurance from the enterprise
risk team. Work to further
integrate climate-related risks,
including physical climate
risks, into the enterprise risk
framework continues into the
new financial year.
The Board of Directors (“Board”)
is responsible for governing
and overseeing the Company’s
strategy and providing an
oversight, control and monitoring
role of its operations and risks.
In this function, the Board also
oversees climate-related risks
and opportunities.
The Audit & Risk Committee,
which is comprised of independent
non-executive directors, is
responsible for the oversight
of risk management (including
climate risk management) on
behalf of the Board. A dedicated
Director is assigned to have
“climate responsibility” and is
the Board’s representative at
the employee-led Environment
Group, which provides input
and advice to support decision-
making on Impax’s climate policies,
performance and targets.
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Governance continued
Governance structure for climate-related issues
Board of
Directors
The assessment and management of
climate-related risks benefit from
extensive in-house expertise
Board
committees
Audit & Risk
Committee
Environment
Group
Audit & Risk Committee
Committee details
Committee description
Chair: Non-Executive Director
(Vince O’Brien, until 30 November 2022)1
Membership: Non-Executive Directors
The Committee is responsible for overseeing financial
reporting, external audit, risk management, internal
audit, whistleblowing effectiveness, fraud prevention or
detection, and internal controls. The Committee met five
times during the Period.
Investment Committee
Committee details
Committee description
Chair: Chief Investment Officer
(Listed Equities)
Membership: Impax investment teams
The Committee oversees the Company’s investment
activities, investment performance and risk management,
and regularly addresses climate-related issues.
The Committee meets every fortnight.
Management
committees
Executive
Committee
Private
Equity
Investment
Committee
ESG Sub-
Committee
Sustainability Lens Committee
Committee details
Committee description
Investment
Committee
ESG Policy
Committee
Chairs: Chief Investment Officer
(Listed Equities); and Head of
Sustainability & ESG
Membership: Impax’s leading
sustainability experts
The Committee convenes quarterly to assess emerging
issues, risks and opportunities, and their consequences for
the Impax Sustainability Lens and for various economic
activities. Outcomes and decisions from the meeting are
reported at the Investment Committee meeting.
Governance structure as at 30 September 2022. Dotted line denotes
observer role of Chair of Audit & Risk Committee on Environment Group.
1 Annette Wilson, from 30 November 2022.
Sustainability
Lens Committee
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Governance continued
ESG Policy Committee
Private Equity / Infrastructure Investment Committee
Committee details
Committee description
Committee details
Committee description
Chair: President, Impax North America
Membership: Impax staff, including legal
and compliance representatives
The Committee oversees, reviews and approves Impax’s
ESG, sustainability and stewardship-related policies and
positions. It reports significant policy developments to
the Investment Committee.
Environment Group
Committee details
Committee description
Chairs: Head of Sustainability & ESG;
and Head of Sustainability & ESG
(North America)
Membership: Impax staff, with a
Board observer
The Environment Group is responsible for measuring,
monitoring and reporting on Impax’s environmental and
climate performance, as well as proposing firm-level
environmental and climate policies, management systems
and targets. Meeting quarterly, it reports to the Executive
Committee and provides an annual update to the Board.
Chair: Founder & Chief Executive
Membership:1 Head of the PE/
Infrastructure Team, Head of the
Transaction Team (PE/Infrastructure),
Head of Commercial Asset Management
& ESG (PE/Infrastructure), with an
independent observer
The Committee approves all investment and divestment
proposals for the Impax New Energy Investors Funds. The
Committee ensures that all investment decisions are made
in compliance with the relevant Fund’s investment policy,
Limited Partnership Agreement and investor side letters. The
Committee meets as required. The PE/Infrastructure Team’s
Head of ESG is an Observer on the Investment Committee,
responsible for ensuring that investment decisions comply
with the ESG Policy and other relevant rules and regulations
relating to ESG topics, including climate.
ESG Sub-Committee (Private Equity / Infrastructure)
Committee details
Committee description
Chair: Head of Commercial Asset
Management & ESG (PE/Infrastructure)
Membership: Representatives from the
PE/Infrastructure Team (Technical and
the Head of the Team), Compliance,
Legal and Head of Sustainability & ESG
The ESG Sub-Committee meets every six months to discuss
relevant topics, including climate, and is responsible for
governing the PE/Infrastructure ESG Policy.
Impax’s processes for the assessment and management of climate-related risks and opportunities benefit
from extensive in-house expertise on climate throughout the organisation. As well as having trained climate
scientists on its investment team, several members of the Executive Committee have leadership roles or sit
on the boards of organisations that have an objective to promote the transition to a more sustainable and
inclusive economy. This includes Impax founder and Chief Executive, Ian Simm, who is a member of the UK
government’s Net Zero Innovation Board, Chair of the Decarbonisation Board of the Confederation of British
Industry and a Board member of the Institutional Investors Group on Climate Change (IIGCC).
Impax also has an in-house Policy & Advocacy team of experts in climate change, environmental and energy
policy. We outline their work in the Strategy section.
1
This is the Investment Committee for Impax New Energy Investors IV SCSp.
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Strategy
The Company’s strategy is focused on the
investment opportunities arising from the
transition to a more sustainable economy.
This includes the global transition
to net-zero greenhouse gas
emissions and adaptation to the
unavoidable impacts of climate
change.
By using our specialist insights
to invest in companies and
assets that we judge to be well
positioned to benefit from this
transition, we believe our approach
to investment management can
deliver compelling risk-adjusted
financial returns to our clients
over the long term.
In this section, we outline how
we believe the Company is itself
well positioned to capitalise on
climate-related opportunities
and how we approach climate-
related risks. We also explain the
role of our policy advocacy work
in advancing climate-related
opportunities and mitigating
climate-related risks at a
system level.
Impax Climate investment strategy
The Impax Climate strategy invests in a portfolio of 50 to 70
listed companies, across a diverse range of sub-sectors, that have
demonstrable exposure to products and services that enable
mitigation of climate change or adaptation to its consequences.
Climate mitigation solutions include renewable energy and energy
efficiency stocks that reduce and prevent greenhouse gas (“GHG”)
emissions. Primary adaptation solutions focus on addressing the
immediate impacts of climate change, such as rising sea levels
and extreme heat. Secondary adaptation solutions focus on issues
arising from climate change, such as the need for services to
forecast and limit financial losses caused by extreme weather.
Through our impact reporting, we have demonstrated that a
US$10 million investment in the Impax Climate strategy supported
the avoidance of 1,600 tonnes of CO2 through portfolio companies’
products and services in 2021.2
Over the three years to 30 September 2022, the Impax Climate
strategy delivered gross returns of 34.9%, compared with 23.3%
for its benchmark, the MSCI ACWI Index.3
CLIMATE-RELATED
OPPORTUNITIES AND
OUR PRODUCTS
Founded in 1998, Impax is one of
the largest and longest-established
investors dedicated to investing in
the transition to a more sustainable
economy. Rising interest among
institutional investors for actively
managed climate solutions and
strategies aligned to the transition
to a sustainable economy, across
asset classes, presents a key
opportunity for the Company.
All of our investments are
intentionally aligned to a transition
to more sustainable and low-
carbon economy. As of 31
December 2021, 59% of Impax’s
AUM were invested in assets that
we assess to be ‘climate solutions’1.
In January 2018, we launched a
dedicated Climate investment
strategy (see box to the left).
As at 30 September, its AUM stood
at £2.7 billion, making it Impax’s
fifth-largest investment strategy.
1
2
3
To be classified as ‘climate solutions’ under Impax’s
proprietary Climate Opportunities taxonomy,
companies must have a demonstrable exposure
to products and services enabling mitigation of
climate change or adaptation to its consequences.
Source: Impax analysis, as at 31 December 2021.
Investment-related AUM excludes cash. Please note
that this data has not been externally assured.
These figures refer to the past. Past performance
is not a reliable indicator of future results. Data
represents underlying holdings of representative
account. Data as at 31 December 2021.
AUM (GBP) as at 30 September 2022. In line
with market standards, the strategy returns are
calculated including the dividends re-invested, net
of withholding taxes, gross of management fee, and
are represented in sterling. MSCI indices are total
net return (net dividend re-invested).
CLIMATE-RELATED RISKS
TO OUR STRATEGY
Much as climate-related
opportunities are prominent
considerations in all investment
decision-making, so too are
climate risks. We explain how both
transition and physical climate risks
are assessed and managed as part
of the investment process within
the Risk Management section.
The performance of Impax
investment strategies could be
undermined by poor climate
risk management of investee
companies. We therefore
undertake rigorous environmental,
social and governance (ESG)
analysis on all companies and
engage with climate laggards,
as outlined in the section on
Risk Management below.
Were our investment strategies
to diverge from their objectives,
we would not be exposed to the
climate investment opportunities
we perceive and may therefore
underperform over the long
term. This would also expose the
Company to reputational risk. For
this reason, ensuring the integrity
of our investment propositions is
considered paramount.
Impax is a member of a range of
climate-focussed organisations
including CDP, Ceres, the Energy
Transitions Commission, the
Glasgow Financial Alliance on
Net Zero, the IIGCC, the PRI and
the UK Sustainable Investment
and Finance Association.
AUM of Impax Climate strategy
(as at 30 September 2022)
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Strategy continued
POLICY ADVOCACY
As an investment manager, we
believe that one of the most
effective actions which Impax can
take to limit the systemic risks
associated with climate change
is to encourage policymakers
to put in place effective policy
frameworks to accelerate the
transition to net-zero emissions.
Impax therefore places great
emphasis on climate-related
policy and advocacy, collaborating
with clients and stakeholders for
policy action to attract private
capital necessary to achieve this
transition.
Financing the net-zero transition
was one of four priorities for
policy advocacy during the Period.
The COP26 climate summit in
November 2021 was a central
focus of that activity. We used a
range of channels to communicate
our objectives and were pleased
to see our positions reflected in
commitments and calls to action
that emerged at Glasgow.1
Impax is a member of a range of
climate-focussed organisations
including CDP, Ceres, the
Energy Transitions Commission
(“ETC”), the Glasgow Financial
Alliance on Net Zero (“GFANZ”),
the IIGCC, the PRI and the UK
Sustainable Investment and
Finance Association (“UKSIF”). We
also participate in issue-specific
initiatives which focus on different
aspects of climate policy, including
the Climate Financial Risk Forum
(“CFRF”), the Coalition for Climate
Resilient Investment (“CCRI”), the
Financial Sector Deforestation
Action initiative, the FAIRR
Foundation, the Financing the Just
Transition Alliance and the UK’s
Transition Plan Taskforce.
Impax also supports several
charities and non-profit
organisations focused on climate
action through multi-year strategic
partnerships, namely Ashden,
ClientEarth, Ceres, and the World
Resources Institute.
1
Please refer to Impax’s Engagement and Policy Advocacy Report 2022 for details of our COP26-related policy
advocacy work.
Risk management
Impax’s primary climate exposure is through the investments it
makes on behalf of clients, where a failure to manage risks could
negatively affect investment performance and its reputation as a
sustainability-focused investment manager. Secondarily, the
Company also faces certain operational climate risks.
CLIMATE RISK ASSESSMENT
As mentioned in the Strategy
section above, Impax assesses
climate and other material risks
through integrated company-level
ESG analysis that informs our
investment decisions and portfolio
construction. Components of this
analysis and key performance
indicators include:
1. Transition climate risks
• Disclosure: Rigour of
measurement and transparency
of reporting of climate risk
exposure and management,
including carbon emissions
across all scopes, in absolute
and relative intensity terms, e.g.,
TCFD-aligned reporting
• Management: Establishment of
climate management systems,
efficiency and renewable energy
investment, management
compensation tied to climate
outcomes
• Target-setting: Robustness of
targets; science-based, with
short-, medium- and longer-term
time horizons, Paris-aligned with
sectoral pathways to net zero,
ideally externally verified
• Performance: Outcomes
achieved from climate
management and target-setting
2. Physical climate risks
• Disclosure of company key
locations, including strategic
plants and facilities
• Assessment of proportion of
company facilities exposed to
physical climate risks
• Climate risk assessment
undertaken with scenario
analysis, ideally quantifying
financial impacts from physical
climate risks
• Actions planned or taken to
improve physical climate risk
resilience or adaptation
Using a proprietary scoring
methodology, we employ a top-
down assessment of companies’
exposure to chronic and acute
physical climate risks, as well as
their vulnerability to them due
to both company-specific and
country-specific factors. We aim
to expand this analysis to a more
granular level including the use of
geolocation of investee companies’
assets, and are collaborating with
the University of Oxford on a
project to measure the potential
financial impacts, or “Value at
Risk”, stemming from physical
climate risks.
Investments in the New Energy
strategy are subject to climate
risk assessments through our
ESG analysis to identify material
climate risks, and as part of the
permitting process for renewable
energy projects prior to entering
construction. Appropriate
measures to reduce any risks can
be considered in post-acquisition,
active management plans.
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Risk management continued
Physical climate risks
We have also developed a
proprietary tool that examines
how seven physical climate
hazards – including precipitation,
extreme heat and flood risks
– are likely to impact investee
companies under various
emissions-based scenarios,
‘Representative Concentration
Pathways’, that are paired
with ‘Shared Socioeconomic
Pathways’. These scenarios
underpin the research collated by
the Intergovernmental Panel on
Climate Change (“IPCC”) in their
assessment reports.
The output of scenario-based
forecasting can then be mapped
against the locations of assets
owned by investee companies.
To date, we have run the
asset location-level multiple-
scenario analysis model on
assets held in our Private Equity
portfolios, as well as many
companies held within our Listed
Equities portfolios.
Our physical climate risk
assessment tool is used to flag
companies whose climate risk
is more elevated to inform
additional examination of that
risk. This also feeds into our
engagement work.
Using a proprietary scoring
methodology, we employ a top-down
assessment of companies’ exposure to
chronic and acute physical climate
risks, as well their vulnerability to them.
SCENARIO ANALYSIS OF
TRANSITION AND PHYSICAL
CLIMATE RISKS
Transition climate risks
We have adopted a climate
scenario developed by the
Network for Greening the Financial
System (“NGFS”) to assess how
our investee companies’ earnings
might be impacted by the
evolution of carbon prices. Carbon
pricing includes costs associated
with emissions trading systems
globally as well as carbon taxes.
Our carbon pricing model aims
to estimate the impact of carbon
pricing on companies’ future
global earnings before interest and
tax (“EBIT”), accounting for their
Scope 1 and Scope 2 emissions
and based on the Net Zero 2050
scenario by the NGFS. The EBIT
of companies with relatively high
Scope 1 and Scope 2 emissions
and/or low EBIT will be particularly
susceptible to the effects of
carbon pricing. Scope 3 emissions
are currently not used in the
model, as Scope 3 emissions are
outside of the scope of carbon
pricing regimes.
We use this analysis to identify
specific companies with high
exposure to transition risks
with whom we then engage
to encouraged improved
management of those risks.
ENGAGEMENT AS A TOOL FOR
CLIMATE RISK MANAGEMENT
Impax actively engages with
its investee companies to
encourage improved climate risk
management, processes and
disclosures. Climate change has
been one of our four strategic
engagement areas throughout the
Period. Within this, we have been
focused on:
Where material concerns or
anomalies are identified, Impax
will intervene to mitigate risks. The
investee company’s management
team is immediately contacted. If
they are unresponsive or unwilling
to consider alternative options,
Impax will escalate the dialogue by:
• Seeking alternative or more
senior contacts within the
company
• Processes, management and
transparency of climate risks
• Physical climate risks, including
• Intervening or engaging together
with other shareholders,
institutions or organisations
In line with our net-zero
commitment, we will continue
to use our active stewardship
approach to engage investee
companies that are not yet
considered climate resilient or
transition aligned. If interventions
are unsuccessful and Impax
believes the climate risk profile
of the company has significantly
deteriorated, or if a company’s
strategy or governance structures
have altered to a degree where
its return outlook and strategy
no longer meet our expectations,
it would be excluded from our
investable universe and/or sold.
• Highlighting the issue and/or
joint engagement regarding
the issue through institutional
investor platforms that involve
the likes of academics and NGOs
• Filing or co-filing resolutions at
General Meetings
water stress
• Disclosure of the location
data of companies’ assets and
facilities
Engagements are conducted as
part of regular meetings with
company management teams,
or through additional conference
calls, meetings, email exchanges,
or as part of joint communications
with the investment community.
Engagements are also regularly
conducted together with other
investors and partners.
Impax actively manages
investments in the New Energy
strategy and engages directly with
management and via the team’s
positions on boards.
Engagement with ENN Energy Holdings
Companies that are better positioned to respond to climate
change are likely to command a valuation premium over less well-
prepared competitors. We have been engaging with one of our
China-based investments, energy infrastructure company ENN
Energy Holdings, to encourage it to improve its GHG disclosure
and physical climate risk management.
In a series of engagements since 2018, we provided the company
with a physical climate risk assessment that ENN used as a
starting point for conducting a survey of site managers on their
perceived physical climate risks and for carrying out a forward-
looking pilot financial impact analysis of extreme weather risks.
During two engagements in 2021, we found that the company had
made significant improvements: it has improved its sustainability
disclosures; its GHG emissions reporting is now verified against
internationally agreed standards; and the company has set
medium-term emissions reduction targets.
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Risk management continued
In 2021, for the second year in a row, campaign group
ShareAction ranked Impax first out of 65 of the world’s
largest asset managers for its support of 146 shareholder
proposals on environmental and social issues.1
Overall, the assessment indicated
that the main operational risks
are associated with connecting
infrastructure and transport.
The experience of the COVID-19
pandemic demonstrated that
operations could continue
effectively with most staff working
remotely, however, giving us
confidence that the Company
would cope with any acute
climate impacts.
IDENTIFYING, ASSESSING AND
MANAGING CLIMATE RISK IN
OUR OPERATIONS
Transition climate risks
(operational)
We are committed to monitoring
and reducing our own operational
emissions across Scope 1, Scope
2 (emissions relating to electricity
consumption) and Scope 3 (largely
business travel).
All offices are in shared buildings
where energy efficiency measures
are centrally managed and largely
out of Impax’s control. However,
the London headquarters are in
a certified green building (rated
“excellent” by BREEAM and
managed by an ISO 14001-aligned
building management system) and
Impax has been adjusting systems
to minimise inefficiencies and seek
energy-saving opportunities.
Physical climate risks (operational)
Like almost all companies, Impax
is subject to climate-related
risks relating to its operations.
Specifically, Impax offices are
subject to physical risks from
extreme weather events as are our
suppliers, including of electricity
and information technology
services, and the transportation
systems on which employees
depend.
Our assessment concluded that
the physical climate risks facing
our offices remain relatively
low. While drought risk and
water stress is high across
the metropolitan areas where
Impax offices are based, most
significantly in London, as an
office-based company water risks
are moderate and more indirect.
Major storm risk is notable, and
expected to increase, for our US
(Portsmouth, New Hampshire and
New York) and Hong Kong offices,
with sea level rises elevating
coastal flooding risks.
1 ShareAction, 2021: Voting Matters 2021 – See page 38.
Metrics and targets
INVESTMENT-RELATED METRICS
We present our climate metrics and targets using the framework of the Climate Disclosure Dashboard
developed by the Climate Financial Risk Forum (CFRF) with input from Impax and peers. We believe this
is a useful framework in providing an understanding of climate risks, impacts, resilience and contribution
to investments in climate solutions, following the approach of double materiality.
Impax Climate Disclosure Dashboard
Category
Use Case
Metrics
Impact of climate change
on Impax’s investments
Transition climate risks
Assets significantly exposed to carbon pricing
Physical climate risks
Assets significantly exposed to physical climate risks
Impact of Impax’s
investments on
climate change
Financing the transition
Exposure to climate solutions
Financed emissions
Financed GHG emissions
Avoided emissions
Cross-cutting
Engagement
Portfolio alignment
Climate-focused engagements and outcomes
Weighted average carbon intensity (WACI)
In line with the approach proposed by the Dashboard, we are intending to move towards climate-related
financial disclosures wherever possible.
The figures included in this section have been externally assured except where otherwise stated. Where
figures have not been externally assured, they have been subject to internal peer review undertaken by Impax
colleagues who are not involved in their calculation.
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SectionPage Title
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Impax Asset Management Group plc
Annual Report and Accounts 2022
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TCFD Report 2022 continued
Metrics and targets continued
Transition climate risks
(investment-related)
Assets significantly exposed
to carbon pricing
Physical climate risks
(investment-related)
Impax active listed
equities strategies
Financing the
transition
Exposure to
climate solutions
Companies comprising around
9% of the AUM of Impax’s active
listed equities strategies are
exposed to a potential decrease
in future profitability – measured
by earnings before income and
tax (EBIT) – of 30% or more,
based on a scenario analysis of
the impact of carbon pricing (see
“Scenario analysis of transition and
physical climate risks” in the “Risk
Management” section for details).
We are engaging to further
understand these companies’
actions towards mitigating their
transition risk exposure as well as
their overall climate resilience.
Companies comprising around
15% of the AUM of Impax’s active
listed equities strategies are
exposed to “high” or “very high”
physical climate risk, based on
our assessment of chronic and
acute risks as well as companies’
vulnerability due to both company-
specific and country-specific
factors. Most of these companies’
assets and plants are based in the
US, China, India, Japan and Mexico.1
Impax New Energy Funds
On aggregate, the New Energy
portfolio of renewable energy
assets performs well across
location-related, physical climate
hazard metrics. Key areas of focus
remain Spain, where heat and
water stress are consistently high,
and the Netherlands, where coastal
flood risks exist.
At as 31 December 2021, 59%
of total AUM was invested in
companies and assets providing
climate solutions, with 72%
invested in environmental thematic
strategies more broadly.2
1
2
This high-level risk assessment includes the country
location of companies’ headquarters and up to five
company facilities.
Source: Impax analysis, as at 31 December 2021.
Excludes cash. Please note that this data has not
been externally assured.
Avoided emissions of investee companies
CO2 impact per US$10m invested by strategy for one year (tCO2)
Comparators
Global economy1
2˚C scenario (2030)1
1.5˚C scenario (2030)1
Sustainability Lens strategies
Global Opportunities
US Large Cap
Asian Opportunities
US Small Cap
Environmental Markets strategies
Sustainable Food
US Environmental Leaders
Leaders
Water
Specialists
Climate
Asian Environmental
Fixed Income strategies
Core Plus Bond
Sustainable Infrastructure strategies
Sustainable Infrastructure (active)2
New Energy3
CO2 avoided (tCO2)
Scope 1 & 2 CO2 emitted
Scope 3 CO2 emitted
-7,000
-6,000
-5,000
-4,000
-2,000
-2,000
-1,000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
These figures refer to the past. Past performance is not a reliable indicator of future results. Impax impact
calculations are based on strategy AUM and portfolio holdings as at 31 December 2021.1
Please see overleaf for footnotes.
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SectionPage Title
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Impax Asset Management Group plc
Annual Report and Accounts 2022
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TCFD Report 2022 continued
Metrics and targets continued
We calculate and report, on a portfolio basis, the net CO2 impact per
US$10 million invested in Impax strategies for one year.4 To calculate
net CO2 impact, we subtract the emissions avoided over one year – as
a result of the use of portfolio companies’ products and services – from
the direct and indirect emissions produced by portfolio companies
and in their supply chains. We separate strategy carbon emissions out
into Scope 1 and 2 – which includes direct and indirect emissions from
energy produced and consumed by portfolio companies – and Scope
3 – which includes indirect emissions from portfolio companies’ supply
chains and products in use.
FINANCED EMISSIONS
Financed GHG emissions
We have gathered all emissions data disclosed by our investee
companies, estimating Scopes 1 and 2 emissions where those are
not reported. The table below includes both absolute (tonnes of CO2
equivalent (tCO2e)) and intensity-based metrics for listed equities
strategies, which account for 95% of total AUM. This includes both
our active and systematic listed equities strategies.
Scope 1 & 2 emissions
Scope 3 emissions
Carbon footprint
WACI (Scope 1, 2)
WACI (Scope 1, 2 & 3)
Unit
tCO2e
tCO2e
tCO2e / US$1m invested
tCO2e / US$1m revenue
tCO2e / US$1m revenue
Listed equities
3,587,563
6,758,259
200
150
448
Source: Scope 1, 2, and 3 emissions data gathered and estimated as part of the Impact @ Impax 2022 reporting
for active Listed Equities assets. Emissions data for stocks held exclusively in Impax’s systematic Listed Equities
strategies was externally sourced and has not been externally assured, however underwent an internal peer review,
by the Impax systematic quantitative team.
We also gathered emissions data for our fixed income investments,
which comprise 4% of Impax AUM. Scope 1 and 2 and Scope 3 emissions
totalled 321 tCO2e and 2,297 tCO2e, respectively. The carbon footprint for
fixed income investments was 23 tCO2e per US$1m invested.5
The carbon footprint of private equity investments, which comprise 1%
of Impax AUM, was 40 tCO2e per US$1m invested.3
1
The “global economy” comparator has been calculated by dividing estimated total global emissions
in 2021 by the value of total global financial assets. Impax calculations are based on estimated global
assets under management in 2020 (Source: Financial Stability Board. 2021: Global Monitoring Report
on Non-Bank Financial Intermediation 2021) and estimated global GHG emissions in 2018 (Sources: Our
World in Data, 2020: CO₂ and Greenhouse Gas Emissions, & Emissions Database for Global Atmospheric
Research, 2021: GHG emissions of all world countries).
The GHG emissions figure used is an average
of both sources, adjusted to an estimated
2021 figure using the average growth rate in
CO₂ emissions from energy combustion and
industrial processes between 2018 and 2021
(Source: IEA, 2022). The emissions intensity
figure is derived by dividing the adjusted global
GHG emissions figure by the global AUM figure.
The “1.5°C scenario” is based on the IPCC target of
reducing global emissions by 45% from 2010 levels
by 2030, to limit global warming to 1.5°C and the
“2°C scenario” indicates emissions reduction of
25% by 2030, to limit global warming to below 2°C.
Impax calculations for the “1.5°C” and the “2°C”
scenarios are based on estimated global assets
under management (AUM) in 2030 and estimated
global GHG emissions in 2030 compatible with the
1.5°C and 2°C alignment scenarios. The 2030 global
AUM figure is calculated by extrapolating the 2020
global AUM figure (Source: Financial Stability Board
(FSB), 2021: Global Monitoring Report on Non-Bank
Financial Intermediation 2021) using the compound
annual growth rate in global AUM between 2002
and 2020 (Source: FSB). The 1.5°C-aligned and
2°C-aligned global GHG emissions figures are
calculated by reducing 2010 global emissions (an
average of two sources: Our World in Data, 2020:
CO₂ and Greenhouse Gas Emissions, & Emissions
Database for Global Atmospheric Research, 2021:
GHG emissions of all world countries) by 45%
(1.5°C) and 25% (2°C) respectively. The 45% and
25% reduction needed by 2030 are internationally
accepted figures (IPCC, 2018: Global Warming of
1.5°C Summary for Policymakers). The emissions
intensity figure is derived by dividing the estimated
global GHG emissions figure by the estimated
global AUM figure.
2 Reporting for the Sustainable Infrastructure
(active) strategy is based on model portfolio
holdings, in advance of its launch in Autumn 2022.
Data represents indicative underlying holdings of
proposed strategy. Actual holdings and therefore
impact data may vary and should not be relied upon.
3 Reporting for the New Energy considers the
lifecycle emissions of its investments which covers
Scope 1, 2 and 3 emissions. The source for solar
and wind emissions factors is Annex II: Metrics &
Methodology, in “Climate Change 2014: Mitigation
of Climate Change. Contribution of Working
Group III to the Fifth Assessment Report of the
Intergovernmental Panel on Climate Change”. For
hydropower, we use hydroelectric emissions factors
published by the Norwegian Water Resources and
Energy Directorate (NVE).
4
This captures CO2 emission and avoidance
reporting for approximately 90% of Impax’s assets
under management, as of 31 December 2021.
5 This includes emissions for corporate fixed income
assets held within the Impax Core Bond+ strategy.
ENGAGEMENT
Transition alignment of investee companies
Impax has assessed the alignment of its portfolio companies’ climate
management and processes to the net-zero transition and the need
to adapt to physical climate impacts, based on the PAII Net-Zero
Investment Framework1 and influenced by the SBTi Portfolio Coverage
Approach. The approach is also aligned with the GFANZ Financial
Institution Net-zero Transition Plan (“NZTP”) guidance.2 Aligned climate
management processes include appropriate climate risk pricing, robust
climate target-setting (for example, approved the Science Based Target
initiative (“SBTi”) targets) and TCFD-aligned climate reporting.
We have defined three categories: “transition aligned”, “transition
aligning” and “transition non-aligned” climate management and
processes. In this context, “transition aligned” also includes the need to
adapt to climate impacts. The distribution of committed AUM in these
categories, as of 31 December 2021, stood at:3
“Transition aligned” climate management & processes
“Transition aligning” climate management & processes
“Transition non-aligned” climate management & processes
Climate-focused engagements and outcomes
Climate-related engagements during 20214
Total engagements focused on climate-related issues
Companies engaged on climate issues by AUM5
Positive engagement outcomes during 2021
Total engagements with a positive outcome6
Climate-related engagements that achieved a positive outcome
47%
45%
8%
23%
18%
47%
66%
1
2
3
4
5
6
https://www.iigcc.org/resource/net-zero-
investment-framework-implementation-guide/
https://assets.bbhub.io/company/
sites/63/2022/09/Recommendations-and-
Guidance-on-Financial-Institution-Net-zero-
Transition-Plans-November-2022.pdf
Source: Impax analysis, as at 31 December 2021.
These calculations are based on AUM included
towards Impax’s target under the Net Zero Asset
Managers (NZAM) Initiative (see “Investment-
related targets” on page 72 for details). Please note
that this data has not been externally assured.
Source: Impax analysis, as at 31 December 2021.
Please note that this data has not been externally
assured.
AUM, as at 31 December 2021.
Positive outcomes are classified as “progress
achieved” or “milestone achieved” as assessed by
Impax against engagement objectives.
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SectionPage Title
72
Impax Asset Management Group plc
Annual Report and Accounts 2022
73
TCFD Report 2022 continued
Metrics and targets continued
INVESTMENT-RELATED TARGETS
Impax’s net zero target and commitments
The Net Zero Asset Managers (NZAM) initiative, which Impax joined in October 2021, reflects a formal
commitment by signatories to support the goal of net-zero GHG emissions by 2050 or sooner, in line with
global efforts to limit warming to 1.5°C.
As an NZAM initiative signatory: Our aim is for 100% of committed AUM to be within the “transition aligned”
or “transition aligning” categories, related to climate management and processes, by 2030. At least 50% of
committed AUM will be classified as aligned.
To achieve this target, we will:
• Engage with all in-scope companies not yet climate resilient/transition aligned
• Use proxy voting as part of climate resilience and transition stewardship
• Use collaborative engagements and escalations
• Use “system-level” engagement to identify and remove barriers from achieving net zero transition
• Focus on policy advocacy as support for accelerating a real-economy transition
• Consider climate transition in product development
Impax’s approach is informed by the PAII Net Zero Investment Framework1 and is influenced by the SBTi
Portfolio Coverage Approach. Committed AUM consists of all actively managed listed equities and private
equity investments which represent 92% of AUM. Over time we plan to increase the proportion of AUM
committed. We are committed to reporting on the level of our investment in climate solutions and on the
related avoided GHG emissions.
1
IIGCC Paris Aligned Investment Initiative, Net Zero Investment Framework 1.5C Implementation Guide:
https://www.parisalignedinvestment.org/media/2021/03/PAII-Net-Zero-Investment-Framework_Implementation-Guide.pdf
OPERATIONAL METRICS
Our carbon emissions for the Period (12 months to 30 September 2022)
Direct (Scope 1, natural gas)
Indirect (Scope 2, electricity consumed,
market-based approach)
Value chain (Scope 3 business travel)
Impax total (market-based approach)
2022
(tCO2e)1
31
2021
(tCO2e)
32
Change
(%)
-2%
Change
tCO2e/FTE
(%)
Change
tCO2e/AUM
(%)
-22%
+2%
5
340
376
10
-53%
-63%
-51%
9 +3,590%
+2,834%
+3,749%
51
+630%
+480%
+661%
The Company’s total carbon footprint (Scopes 1, 2 and 3) increased substantially during the Period, driven
primarily by increased business travel, from a very low base, with the lifting of global travel restrictions
following COVID-19 lockdowns and continued business growth. The latest pre-pandemic Scope 3 (business
travel) figure, for the Period ending 30 September 2019, was 329 tCO2e. We have enhanced our Scope 3
emissions methodology with more accurate emissions factors, including flight distances, class of travel and
radiative forcing.2
Market-based Scope 2 emissions decreased due to a small reduction in consumption and a switch to
renewable energy at the New Hampshire office in 2021. Our New York City office opened during the Period
and has been added to our reporting scope.3
The Company’s total global energy consumption over the Period was 492 MWh, up 3% compared to the
previous Period.4 The New Hampshire and London offices accounted for 55% and 42% of total energy
consumption, respectively.
OPERATIONAL TARGETS
Impax has the following firm-wide, operational environmental targets in place:
• Scope 2 emissions target: To source 100% renewable energy across all Impax offices (from electricity use).
This stood at 97% across the company at the end of the Period. Our Hong Kong office is now sourcing
renewable electricity.
• Scope 3 emissions target: Air travel has historically been Impax’s largest source of carbon emissions,
and we now look to substitute short-haul air travel by rail or coach where possible. We also favour video
conference meetings whenever practicable. We are discussing a target to reduce Scope 3 emissions.
1
2
3
These FY2022 operational carbon emissions figures have been externally assured by ERM CVS, in accordance with the International Standard on Assurance
Engagements ISAE 3000 (Revised). Following a location-based approach, Impax total emissions for the Period were 440.4 tC02e.
Scope 3 business travel emissions: All air travel distance data provided our third-party corporate travel provider for FY2022 has been used to calculate associated
business travel emissions, by applying the relevant UK Government DEFRA/BEIS emissions factors (including radiative forcing) by flight distance (domestic, short-haul,
long-haul and international) and flight class (economy, premium economy and business).
At present, travel-related emissions data is only available for air travel undertaken by employees based in our London, Hong Kong and Dublin offices (equivalent to 62%
of firm-wide full-time equivalent employees). Emissions associated with rail travel have not currently been captured by the existing data. While business travel by hire
cars and buses is limited, staff expense these journeys retrospectively and we have not been able to capture associated travel or emissions data of these journeys.
4
Reporting in line with Streamlined Energy and Carbon Reporting requirements (SECR). This total global energy consumption figure has been externally assured by
ERM CVS.
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SectionPage Title
74
Impax Asset Management Group plc
Annual Report and Accounts 2022
75
TCFD Report 2022 continued
Metrics and targets continued
Independent Assurance Statement to Impax Asset Management Group plc
Impax Asset Management Group plc (“Impax”) engaged ERM Certification and Verification Services
Limited (“ERM CVS”) to provide limited assurance in relation to selected data in Impax 2022 Annual
Report (the “Report”) as set out below.
OUR ASSURANCE ACTIVITIES
Our objective was to assess whether the reporting of the data is in accordance with the principles of
completeness (inclusion of holdings and the boundary applied), consistency (application of reporting criteria)
and accuracy (supporting information reported by individual assets and collation and aggregation of data).
Scope of our
assurance
engagement
Engagement summary
Whether the selected data for the financial year 2022 listed below and presented in the Report
are fairly presented, in all material respects, in accordance with the reporting criteria:
• Total Scope 1 direct GHG emissions tCO2e
• Total Scope 2 indirect GHG emissions – location based tCO2e
• Total Scope 2 indirect GHG emissions – market based tCO2e
• Scope 3 GHG emissions for Category 6: Business Travel tCO2e
• Total global energy consumption MWh
Reporting period
1 October 2021–30 September 2022
Reporting criteria WBCSD/WRI GHG Protocol (2004, as updated January 2015) as relevant for the Scope 1, 2
and Scope 3 data.
Streamlined Energy Carbon Reporting (SECR) requirements for the Total global energy
consumption data.
Assurance standard International Standard on Assurance Engagements ISAE 3000 (Revised).
Assurance level
Limited assurance.
Respective
responsibilities
Impax is responsible for preparing the Report and for the collection and presentation of the
information within it.
ERM CVS’ responsibility is to provide conclusions on the agreed scope based on the assurance
activities performed and exercising our professional judgement.
OUR CONCLUSION
Based on our assurance activities, nothing has come to our attention to indicate that the data, as listed above,
are not fairly presented in the Report, in all material respects, with the reporting criteria.
EMPHASIS OF MATTER
Without affecting our conclusion, which is not modified, we draw attention to the explanatory notes provided
by Impax relating to Scope 3 GHG emissions for Category 6 in the ‘Operational metrics’ section of the Report.
In particular, GHG emissions for this Category from the USA offices where ~38% of employees are based, as
well as emissions associated with ground transportation such as rail and hire car and buses are currently not
included within reporting due to limitations around data collection processes.
We planned and performed our work to obtain the information and explanations that we believe were
necessary to provide a basis for our assurance conclusion.
A multi-disciplinary team of sustainability and assurance specialists performed the following activities:
• Interviewing relevant staff to understand the methodology, collection, reporting, internal QA/QC and
calculation of the selected data.
• Reviewing documentation related to the methodology, including sources of information and the
application of any factors and/or assumptions used to report the selected data.
• Identifying and testing a sample of material data points (and associated data processes and systems)
for accuracy and completeness.
• Testing the accuracy of the overall consolidation and aggregation of the reported data.
• Reviewing the presentation of information relevant to the scope of our work in the Report to ensure
consistency with our findings.
THE LIMITATIONS OF OUR ENGAGEMENT
The reliability of the assured data is subject to inherent uncertainties, given both the available methods
for determining, calculating or estimating the underlying information and the dependence on individual
companies within Impax investment holdings to provide relevant and accurate performance information.
It is important to understand our assurance conclusions in this context. We do not provide any assurance
on future performance or the achievability of Impax goals and targets.
OUR INDEPENDENCE
ERM CVS is a member of the ERM Group. The work that ERM CVS conducts for clients is solely related to
independent assurance activities and auditor training. Our processes are designed and implemented to
ensure that the work we undertake with clients is free from bias and conflict of interest. ERM CVS and the
staff that have undertaken work on this assurance exercise provide no consultancy related services to Impax
Asset Management Group plc in any respect.
Gareth Manning
Partner, Corporate Assurance
28 November 2022
ERM Certification and Verification Services Limited, London
www.ermcvs.com | post@ermcvs.com
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SectionPage Title
Risk Management and Control
76
Impax Asset Management Group plc
Annual Report and Accounts 2022
77
Risk Management and Control
Enterprise Risk Framework
Impax has adopted
a risk management
framework which
takes into account
the key principles
of risk identification,
risk measurement,
risk mitigation, risk
monitoring and
reporting.
The Board strives to achieve a balance between appropriate levels
of risk and return and to ensure that the risks taken by the firm are
appropriately managed and that controls in place to manage those risks
are effective. Although the Board sets the overall business risk strategy
and appetite, all staff are responsible for identifying, monitoring and
reviewing risks across their team and business functions.
Impax’s Enterprise Risk Team is responsible for maintaining a global
risk management framework, including an on-going programme to
monitor the effectiveness of internal controls and processes designed to
mitigate the risks identified. The Team provides reports to the Board’s
Audit & Risk Committee on a quarterly basis on risk matters, including
the effectiveness of the agreed internal controls. The Board receives a
quarterly report from the Chair of the Audit & Risk Committee, which
is responsible for independently overseeing risk management and
internal control environment effectiveness. Board members receive
internal audit reports which independently assess the adequacy of
internal controls. The effectiveness of specific internal controls are
externally audited each year and documented in a ISAE 3402 Report.
The principal risks that the Company faces are described in this section.
Further information on financial risk is given in note 28 to the financial
statements.
RISK GOVERNANCE
Impax has adopted a structured “three lines of defence” approach to
risk oversight and internal controls which is summarised below:
FIRST LINE:
Business units
SECOND LINE:
Risk and compliance
THIRD LINE:
Audit
• Involved in day-to-
day risk management
• Follow a risk process
• Apply internal controls
and risk responses
• Oversee and
challenge first line
risk management
• Provide guidance
and direction
• Maintain enterprise risk
management framework
• Review first and
second lines
• Provide an independent
perspective and challenge
the process
• Objective and
offer assurance
Impax has identified material risk categories and has documented its appetite for each in a Risk Appetite
Statement. The risk appetite approach is applied across the Company.
PRINCIPAL RISKS
The principal risks that the Company faces are:
Reputational risk
Summary
Reputational risk can arise from any of the key risks
described below and relates to the Impax brand and
relationships with our stakeholders.
Cybersecurity and information technology risk
Summary
The Company is dependent on and therefore relies on the
integrity and security of our IT infrastructure and systems.
Cyber-attacks against financial services firms are growing
in number and sophistication and if successful, could
result in business disruption and/or data loss or loss or
harm to clients of the Company. Remote working presents
additional potential cyber-related risks. The war in Ukraine
has also increased the risk of cyber-related attacks.
Regulatory risk
Summary
The Company’s operations are subject to financial
services legislation and regulations, including minimum
capital requirements, in each of the jurisdictions in which
it operates.
Increasing sustainability and ESG focused regulatory
requirements and disclosure obligations (in particular
SFDR, TCFD) introduce increased regulatory obligations
on the Company.
The ongoing situation in Ukraine, and related financial
sanctions, has seen an elevation of financial crime risk
industry-wide. Impax has not identified any material
elevation of this risk, and has not identified any areas of
concern or heightened risk in respect of Impax’s supplier,
vendors or clients following a review of these against
financial sanctions.
How we mitigate risk
Integrity and appropriate conduct are an integral part of
the Impax culture and values, and all our business dealings.
The integrity and reputation of staff is regularly assessed,
and the controls below help to mitigate the risk of
incidents that may have a reputational impact.
How we mitigate risk
We worked with partners, governments agencies and
regulators, to ensure we are aware of industry best
practice to mitigate the threat of a cyber-attack. We
continue to invest in specialist expertise, systems and
processes to protect clients’ and Company data. All staff
receive regular cyber awareness training. We also carry
out external and internal penetration tests annually and
phishing simulations monthly. We continue to enhance
our oversight of our critical suppliers with respect to their
Cyber readiness and resilience processes. While our IT
infrastructure has remained resilient, we continue to test
ourselves annually against business resilience scenarios,
using external facilitators.
How we mitigate risk
The Company seeks to manage these risks by ensuring
close monitoring of compliance with the regulations, and
by tracking regulatory developments and reacting promptly
when changes are required through the Company’s
permanent and independent compliance function.
Climate risk and sustainability and ESG regulations are
monitored as part of the compliance and risk programmes
at Impax.
During the Period Impax undertook a review of clients,
suppliers and vendors to confirm compliance with recently
introduced sanctions related to Russia’s invasion of
Ukraine and has identified no areas of concern.
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Section
78
Impax Asset Management Group plc
Annual Report and Accounts 2022
79
Risk Management and Control continued
Operational risk
Summary
Operational risk arises in our investment management
activities, distribution activities and in the operation of
our corporate infrastructure.
Market risk
Summary
The Company charges management fees based on AUM
and accordingly its revenue is exposed to market risk. The
Company seeds investments in its own Listed Equities
funds in order to build a track record to market those
funds more effectively. It is therefore directly exposed to
the market performance of the funds. The Company also
invests in its own Private Equity funds and is therefore
exposed to the performance of these funds.
Volatility and inflation continue to have a material impact
on global markets. and as a consequence on the Company
and its investments.
Climate risk and sustainability risk are considered with
regard to investments.
The impact of the conflict in Ukraine continues to affect
markets. Further information on how this impacts
investment strategies is detailed on page 23.
How we mitigate risk
The Company has established control frameworks so
that the risk of financial loss to the Company through
operational failure is minimised. As part of this the
Company obtains full “ISAE 3402” internal controls
assurance every year, for its UK Listed Equities business.
Impax also maintains plans to manage operational business
risks in the case of an emergency or crisis situation. These
involve specific responses to enable business contingency
and recovery procedures. The Company has insurance cover
which is reviewed each year prior to policy renewal.
The Company considers and seeks to manage physical
climate risk in its operational risk management framework.
The Board has requested that climate risk be formally
recorded on the Company’s enterprise risk register. Work
to further integrate climate-related risks, including physical
climate risks, into the Enterprise Risk Framework continues
into the new financial year.
How we mitigate risk
The Company operates a number of different strategies
which themselves are diversified by geography and
industry. The Company’s investment teams have to follow
defined investment processes.
Oversight of the impact of market risk on investment
activity is ongoing and involves the investment teams,
Enterprise Risk Team and the Company’s Investment
Committees, and Audit & Risk Committee.
Liquidity risk
Summary
Liquidity risk in relation to client portfolios is the risk that
funds cannot be generated to meet redemptions or other
obligations as they arise. Liquidity issues can arise as a
result of market conditions or through holdings of illiquid
investments. Liquidity risk also applies to the Company’s
own financial obligations, in the event that cash resources
are insufficient to meet liabilities as they fall due.
How we mitigate risk
We actively monitor the liquidity of individual stocks
and portfolios. Adjustments to fund holdings are made
where necessary to ensure that we are able to meet fund
redemptions. Despite the ongoing market disruptions
noted above, the Company has managed liquidity
obligations consistently during the Period.
The Company’s approach to managing its own liquidity
risk is to ensure that it has sufficient cash on hand to
meet liabilities when due under both normal and stressed
conditions, and to satisfy regulatory requirements. The
Company produces cash flow forecasts covering “a
12-month period”. The Company’s management and Board
review these forecasts. As shown in note 21 to the financial
statements the Company has adequate cash reserves.
Credit risk
Summary
The Company is exposed to the risk of counterparty
default. Our counterparties include banks holding
the Company’s cash reserves.
How we mitigate risk
The Company seeks to manage this risk by only depositing
cash with institutions with high credit ratings and by
allocating its cash holdings to at least four institutions
at any time.
Currency risk
Summary
A significant percentage of Impax LN’s business income is
based on assets denominated in foreign currencies whilst
the majority of costs are in pounds sterling. For the Impax
NH business the majority of income is based on assets
denominated in US dollars and all costs are in US dollars.
How we mitigate risk
For the Period, and on an on-going basis, the Company’s
strategy for the Impax LN business has been to put in
place hedges, in the form of forward rate contracts,
where there is sufficient predictability over the income to
allow for an effective and cost-efficient hedge. Otherwise
foreign currency income is converted to pounds sterling as
soon as practically possible after receipt.
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Engaging with our Stakeholders
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Engaging with our Stakeholders
Section 172 of the Companies Act 2006 requires the Board to act in the way that they consider would most
likely promote the success of the Company for the benefit of all stakeholders. In turn the Directors ensure
that they, and the management team, have regard, amongst other matters, to:
• The likely consequences of any decisions in the long term.
• The interests of the Company’s staff.
• The need to foster the Company’s business relationships with suppliers, customers,
distribution partners and others.
• The need to grow the value of the business for our shareholders.
• The impact of the Company’s operations on the community and the environment.
• The desirability of the Company maintaining a reputation for high standards of business conduct.
• The need to act fairly as between members of the Company.
Stakeholder:
Shareholders
Our approach
2022 highlights
We are committed to full disclosure and clear
communications with institutional and private shareholders
and hold meetings throughout the year.
We invest by seeking price inefficiencies in high growth
markets and are focused on managing a small number
of highly scalable investment strategies.
The governance and management of the Company
is driven by the Board and senior management team.
We seek to adhere to high standards of corporate
governance and reporting.
We manage and optimise a scalable platform for growth,
including systems, processes, and infrastructure.
We balance tight costs control with the needs of an
expanding business.
The Company’s dividend policy is to pay between 55%
and 80% of adjusted profit after tax.
• Revenue grew by 23%
• Adjusted operating profits grew by 21%
• Shareholders’ equity grew by 25%
• Cash reserves grew by 53%
• Adjusted operating margin down marginally to 38%
• Adjusted diluted EPS grew 22%
• Dividend: growth of 34%
We continue to engage Peel Hunt and Berenberg as joint
brokers to maintain our contact with institutional investors.
We continue to engage with groups including Equity
Development, ShareSoc, Mello Events and Shares/AJ Bell
to support our interaction with private investors.
Stakeholder:
Clients
Our approach
2022 highlights
We provide a wide range of investment products and
solutions, including mutual funds and private assets to
our clients who are predominantly institutional investors
and pension funds.
We are focused on ensuring that we are managing all
our funds and accounts in line with clients’ investment
objectives and within a framework that is fully compliant
with applicable regulations and policies.
We seek to deliver consistent outcomes for our clients
and superior financial returns over the longer term.
We conduct fundamental analysis which incorporates long-
term risks, including Environmental, Social & Governance
(“ESG”) factors.
We focus on four areas broader beyond financial returns:
corporate engagement and stewardship; environmental
and social impact reporting; policy and advocacy; and
publishing research.
Our client teams build long-term relationships and have a
deep understanding of our clients’ needs and expectations.
Informed by our dialogue with clients we develop new
products to provide client solutions and invest our own
balance sheet as seed capital.
Continued strong investment performance with eight out of
the largest ten strategies, accounting for a combined 89%
of AUM, outperforming their benchmarks over three years.
Of the eight that have five-year track records, seven have
outperformed their benchmarks.
Net inflows of £2.9 billion across our direct sales and
distribution partner channels globally.
We saw strong allocations to our Global Opportunities, US
Large Cap and Leaders strategies.
Significant new mandate wins.
We continue to focus on managing our capacity and have
significant headroom within our existing strategies.
We have evolved our impact reporting to include three
additional strategies, including a fixed income strategy,
and additional metrics on social, water, and nature-related
impact.
Thought leadership highlights included a report on the
investment case for sustainable infrastructure and articles
on the implications of US policy developments, including
the Inflation Reduction Act.
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Engaging with our Stakeholders continued
Stakeholder:
Colleagues
Stakeholder:
Investee companies
Our approach
2022 highlights
Our approach
2022 highlights
We seek to offer a stimulating, collaborative,
and supportive workplace for our people.
We are focused on integrating our one-team culture,
expanding our global presence, ensuring business resilience
through scalability, and sustaining a high-performing
environment.
We prioritise investment to empower our colleagues to
reach their full potential. This includes both professional
and personal development training for all employees,
including contractors, to ensure we have the skills needed
to develop the business.
We are committed to equity, diversity and inclusion (E,D&I).
We value individuals and seek to understand our peoples’
perspectives and to reflect their views. Lindsey Brace
Martinez is the Board Sponsor of the Company’s E,D&I
activities.
We remain focused on addressing the gender pay gap,
particularly at senior management level.
We learn from and act on the feedback from our colleagues.
We now conduct our global employee engagement survey
annually. This year we achieved an overall engagement
score of 89% – up 1 percentage point from 2021 and 7
points ahead of the industry benchmark – based on a 95%
employee response rate.
During the Period we had an employee turnover of 10%,
while 11% of the team celebrated a promotion.
Our “Impax 2025” project was a significant cross-company
initiative to integrate the contribution and plans of all teams
as part of our broader strategy.
We undertook a review of our existing compensation
framework.
We made good progress on our E,D&I strategy and metrics.
49% of the company is female, including 43% of the
Board, 20% of the Executive Committee and 36% of the
Investment Team. 65% of promotions were women.
Stakeholder:
Distribution partners
Our approach
2022 highlights
We have developed strong relationships with other asset
managers who distribute our white-label funds through
their networks. This enables the Company to distribute
our products to a much wider network of clients.
Our senior management team, investment professionals
and client relationship managers meet our distribution
partners regularly and we have strong reporting systems
in place.
We are deepening the level of reporting that we provide to
our clients via our distribution partners.
Net inflows of £1.6 billion from our distribution partners.
Our growing relationship with St James’s Place in the UK
led to £1.1 billion in net inflows.
We saw positive flows via Principal Global Investors and
a private bank in the US, Formuepleje in Denmark, and
Fidante in Australia.
We are long-term investors and develop strong relationships
with many of our holding companies. We conduct deep, on-
going research into all areas of their businesses.
We prioritised four strategic areas of engagement: climate;
corporate governance; human capital management and
sustainability risk management
We engage with companies to minimise risks, protect
shareholder value, promote greater transparency and
encourage companies to become more resilient over time.
We take a supportive rather than activist approach and
often work in collaboration with other asset managers
or organisations.
In 2021 we took part in over 204 engagements.
We were a successful applicant to the UK Stewardship Code.
Stakeholder:
External service providers
Our approach
2022 highlights
We engage proactively with our service providers
through regular communication from employees and
have an established framework that governs our approach
to selection, on-boarding, and oversight, across our
key suppliers.
Our Supplier Code of Conduct sets out the high
standards we expect from our suppliers, covering social
inclusion, sustainability and the environment. We engage
specialist external service providers to supplement our
own infrastructure and staff so that we can deliver key
services more cost effectively.
The Audit & Risk Committee reviews the company’s
material outsourced providers annually.
We invested in our corporate services functions,
including systems to enhance our third-party oversight,
alongside our automation, data management and
reporting capabilities.
We continue to strengthen the areas of risk management,
compliance, business resilience and IT infrastructure for
hybrid working.
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Engaging with our Stakeholders continued
Stakeholder:
Community and the environment
Stakeholder:
Industry wide groups
Our approach
2022 highlights
Our approach
2022 highlights
We are committed to operating to the highest standards
of corporate responsibility, recognising our responsibility to
the community in which we operate, and to a wider society.
We support a low-carbon economy, primarily through
our investment decisions, company engagement, our
collaboration with clients and stakeholders and policy
advocacy. We are committed to reducing our operational
emissions; Scope 1, 2 & 3. Vince O’Brien is the Board
Sponsor of the Environment Group.
Impax partners with organisations aligned with our focus
on the transition to a more sustainable economy: Ashden,
Ceres, Client Earth, Diversity Project and Toigo.
We facilitate charitable giving by our staff via numerous
schemes and match many of the contributions.
We also encourage staff to volunteer both as individuals
and on Company organised initiatives.
In November 2021 Impax joined the Net-Zero Asset
Managers Initiative. Our aim is for 100% of committed AUM
to be within the “transition aligned” or “transition aligning”
categories, related to climate management and processes,
by 2030. At least 50% of committed AUM will be classified
as aligned.
As of December, 2021, 59% of total investment-related AUM
was invested in companies and assets providing climate
solutions. Full details on climate-related disclosures are in
our TCFD report, pages 53 to 75.
We published our Nature, Biodiversity & Deforestation
Policy.
Impax colleagues volunteered over 923 hours with
charitable organisations. We launched our Community
Cause of the Year. Globally, Impax matched £56,361 of
colleagues’ charitable giving. In total, Impax gave £287,382
to charitable causes during the Period.
We believe that working in collaboration with like-minded
organisations can be more effective in bringing about change.
For a list of memberships see page 195.
During the Period we have focussed on the following
themes: financing net-zero emissions (e.g. CBI’s Financing
the Transition white paper); greening the financial system
(e.g. GFANZ guidance on finance institution net-zero
transition plans); nature and biodiversity loss (e.g. Finance
Sector Deforestation Action initiative); and human capital
(e.g. Financing the Just Transition Alliance).
Stakeholder:
Financial industry regulators
Our approach
2022 highlights
Impax is a global business which has a strong focus
on ethical conduct and compliance with applicable
requirements in all jurisdictions where we operate.
We are committed to regulatory reporting and disclosures
which benefit market transparency and integrity.
We seek to contribute positively to evolving regulatory
standards and actively advocate for sustainable
regulatory policies relevant to our activities and clients.
We provided comments to regulators on a range of
regulatory proposals and rules including:
• the FCA’s Sustainable Disclosure Requirements and
investment labels (including a cost benefit analysis);
• the update to the UK Government’s Green Finance
Strategy
• the SEC’s rule on climate-related disclosures for investors
• the US Department of Labor’s rule regarding the use of
sustainability funds on ERISA platforms
• the ISSB’s international standards for sustainability-
and climate-related disclosures
This Strategic Report has been approved by the Board and signed on its behalf by:
Ian Simm
Chief Executive
29 November 2022
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Governance
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Governance “ As the team continues
to expand, Impax’s
commitment to its culture
remains constant.”
88 Chair’s Introduction
92 Board of Directors
96 Corporate Governance Report
102 Directors’ Report
105 Audit & Risk Committee Report
108 Remuneration Committee Report
Sally Bridgeland
Chair
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Chair’s Introduction
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Chair’s Introduction
A SOLID YEAR AMID TURBULENT MARKETS
2022 has been a year dominated by uncertainty:
geopolitical turmoil, inflationary pressures, and rising
interest rates. By contrast, Impax has shown the value
of its authentic, long-held investment philosophy
focused on the transition to a more sustainable
economy. The management team has successfully led
the business through difficult market conditions, with
strong performance against the majority of its key
performance indicators (“KPIs”), including net inflows
of £2.9 billion; revenues up by 23% and adjusted
operating profit up by 21%.
As our net inflows show, client interest in our
specialist investment approach continues to grow,
despite the volatile markets. The Company continues
to appeal to asset owners and intermediary asset
managers across the globe and to demonstrate its
ability to provide longer-term value creation for all
stakeholders.
FOCUS ON PEOPLE AND CULTURE
As the team continues to expand, Impax remains
committed to preserving its culture, conscious of the
challenges of growing quickly in a hybrid working
environment. The Board has been encouraged
by the strategic approach being adopted by the
management team, increasing its attention to
engaging with employees, and with a major in-
person global Senior Leaders conference
in June.
The Board fully supported the recommendation that
employees on lower remuneration should receive a
one-off payment, made after the Period end, to help
alleviate the significant rise in living costs this year.
STRATEGY
The Board held eight formal meetings during
the Period, devoting significant time to strategic
discussion in order to consider fully a range of
business development opportunities.
In June, the Non-Executive Directors attended a
strategy day with the senior management team.
This included a discussion of how the investment
teams are navigating turbulent market conditions;
hearing about clients’ priorities; a summary of the
global senior leadership meeting; and discussing
developments in our US business.
In September 2022 the Board were delighted to
visit Impax’s Portsmouth, New Hampshire office for
our Board meeting. This gave us the opportunity for
some valuable face-to-face time with team members
and we had the opportunity to join one of the
Company’s monthly all-staff town hall meetings.
DEMONSTRABLE INVESTMENT IN A MORE
SUSTAINABLE ECONOMY
Impax’s long-held mission is to invest in the transition
to a more sustainable economy; this informs how we
create value for all our stakeholders.
In line with this mission, we are pleased this year to
be including our first report that describes how we
manage climate risks and opportunities, using the
Taskforce for Climate-related Financial Disclosures
(“TCFD”) framework. This report covers both our
investment approach and an analysis from the
perspective of climate change of how we run our
business. The report, on pages 53 to 75 of the
Strategic Report, includes our commitment under
the Net Zero Asset Manager’s Initiative, which we
joined in October 2021; this describes how Impax will
redirect capital to support companies that are aligned
with the transition to net zero in the real economy.
Managing climate and broader sustainability risks and
investing in environmental and climate opportunities
is a strategic focus for Impax and a priority for the
senior management and Board. The Board has
requested that climate risk be formally recorded on
the Company’s Enterprise Risk register, and work
to further integrate climate-related risks, including
physical climate risks, into the Enterprise Risk
Framework continues into the new financial year.
Our approach to climate and the environment is
coordinated by the Environment Group, which Vince
O’Brien attended on behalf the Board. The Board was
pleased to hear presentations from the Group on two
occasions during the Period.
More broadly, as a Board we always consider how
the success of the Company should benefit all of
our key stakeholders. Please refer to pages 80 to 85
of the Strategic Report for more information on our
approach.
DIVIDEND
In 2019, the Company adopted a policy of paying
an annual dividend of between 55% and 80% of
adjusted profit after tax. In line with this, the Board
now recommends paying a final dividend for 2022
of 22.9p, a total for the year of 27.6p, representing
65% of adjusted profit after tax and an increase for
the total dividend of 34% on 2021. Further details are
provided In the Financial Review on pages 18 to 21 of
the Strategic Report.
OUR COMMITMENT TO GOOD GOVERNANCE
The Directors recognise the importance of strong
corporate governance and have chosen to apply the
Quoted Companies Alliance Corporate Governance
Code. See page 96 for more information.
The Board monitors its approach to the
evaluation of effectiveness. This year we
engaged Boardroom Review, a leading
independent specialist board evaluation
firm, to conduct our first external board
evaluation. The consultancy carried
out interviews with Board members
and reviewed information prior
to a collective Board workshop
discussing the strengths,
challenges and contribution of
the Board to the Company.
“The management team has
successfully led the
business, with strong
performance against the
majority of its key
performance indicators.”
Sally Bridgeland
Chair
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Chair’s Introduction continued
REMUNERATION AND INCLUSION
Consistent with management’s focus on people
and culture, during the Period the Remuneration
Committee worked with management and
independent external advisors to help ensure
that Impax’s approach to pay and performance is
linked to the strategic priorities of the Company.
The resulting “scorecard” approach, which we will
be adopting to assess individual performance and
provide more clarity on the link with pay outcomes,
is described in the Remuneration Report on pages
108 to 117. Building on feedback from shareholders we
have also increased our disclosures around variable
remuneration and will once again put the Directors’
Remuneration Report to advisory vote at the AGM.
An important feature of the new performance
scorecard is the emphasis on collaboration and
teamwork: as a Board we believe that inclusion is vital
to performance and the resilience of the business as
it grows. Lindsey Brace Martinez acts as the Board
sponsor of the company’s focus on equity, diversity
& inclusion (“E,D&I”) and attends the meetings of the
E,D&I Group.
The Company has made further progress with its
E,D&I strategy this year. Last year we articulated
our aim that by December 2025 our overall
gender mix should be 48–52% women and that
the representation of women and racial or ethnic
minorities in key roles should be meaningfully ahead
of industry average.1 We are encouraged by the
improvement in the gender pay gap data for senior
and mid-level employees since last year and continue
to focus on this issue.
At a personal level, I thoroughly enjoyed the
opportunity this year to take part in the City
Hive mentoring scheme in association with
#TalkAboutBlack, which Impax sponsors. Please
see page 51 of the Strategic Report for more details.
BOARD MEMBERSHIP
Annette Wilson joined the Board in June 2022 and
has already made a significant contribution as a
member of the Audit & Risk Committee and the
Remuneration Committee.
Following 13 years on the Board, Vince O’Brien has
notified of us his intention to retire as a Director,
effective at the AGM in March 2023. He has retired
as Senior Independent Director, Chair and member
of the Audit & Risk Committee, and member of the
Remuneration Committee, effective 30 November
2022. Annette Wilson will succeed Vince as Chair of
the Audit & Risk Committee and will assume his role
as Board Sponsor of the employee-led Environment
Group. Simon O’Regan will succeed Vince as the
Senior Independent Director and as the Board’s
Whistleblowing Champion.
On behalf of the Board, I would like to thank Vince for
his tremendous contribution and many years’ service
to the Impax Board and for his recent chairing of the
Audit & Risk Committee and wish him all the best in
his future endeavours.
It’s also a huge pleasure to welcome Karen Cockburn,
Chief Financial Officer Designate, to Impax. It is
planned that Karen will become Chief Financial
Officer, succeeding Charlie Ridge, in January 2023.
In due course it is expected that Karen will join
the Impax Board as an Executive Director. This is
expected to be following the conclusion of the
Company’s AGM, subject to receipt of regulatory
approval in relation to her appointment as a director
of the Company’s FCA regulated subsidiaries. Karen
brings considerable experience and expertise from
her career in financial services and digital platforms
and will be a significant asset to the Company.
1
In senior management, portfolio management, and client-facing in Impax’s primary locations (UK and US).
Charlie has been an exceptional Chief Financial
Officer over the past 14 years and has overseen
a considerable expansion in our communications
with shareholders. On behalf of the Board, I’d like to
extend our thanks to Charlie for his commitment
and successes.
In May this year we were shocked to hear of the
unexpected and untimely death of Keith Falconer. It
was a great pleasure to work with Keith over our five
years together on the Board and he was particularly
generous in his time as he handed the chair over to
me in 2020. He is greatly missed.
ENGAGEMENT AND OUR AGM
We continue to engage Peel Hunt and Berenberg
as our joint brokers, to maintain our contact with
institutional investors. We also work with providers
including Equity Development, ShareSoc, Mello
Events and Shares/AJ Bell to support our interaction
with private investors and are looking to increase this
outreach over the next year.
Our next AGM will take place on 16 March 2023.
We hope that we will again be able to welcome
shareholders to the meeting in person at our London
office on the 7th Floor, 30 Panton Street, London
SW1Y 4AJ. The Directors and the senior management
team appreciate the opportunity to meet with
shareholders to present on the Company’s progress
and hear your questions and feedback. Details of the
AGM, and the proposed resolutions, are covered in
the separate Notice of Meeting.
Sally Bridgeland
Chair
29 November 2022
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Board of Directors
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Board of Directors
SALLY BRIDGELAND
Chair
IAN SIMM
Founder & Chief Executive
LINDSEY BRACE
MARTINEZ
Non-Executive Director
ARNAUD DE SERVIGNY
Non-Executive Director
Joined the Board 2015
Appointed Chair 2020
Joined the Board 2001
Joined the Board 2015
Joined the Board 2018
Previous roles & experience
Previous roles and experience
Previous roles and experience
Previous roles and experience
Sally qualified as a Fellow of the Institute of Actuaries
with consultants Bacon & Woodrow (now Aon Hewitt)
and was CEO of the BP Pension Fund from 2007 to
2014. She has served as Chair of the Management Board
of the Institute and Faculty of Actuaries, been a Trustee
of Lloyds Bank’s Pension Schemes, and the Nuclear
Liabilities Fund.
Ian has been responsible for building the Company
since its launch in 1998. Prior to joining Impax Ian was
an engagement manager at McKinsey & Company
advising clients on resource efficiency issues. Between
2013 and 2018 he was a board member of the
Natural Environment Research Council (“NERC”), the
UK’s leading funding agency for environmental science.
Lindsey has over 30 years in the investment sector.
Previously, she served on the Executive team at global
investment firm, Cambridge Associates, for 15 years
where she held multiple Global Head roles including
Business Development and Client Relationship
Management; External Relations; and Consulting
Services. Prior to this she was a portfolio manager at
the Hancock Timber Resource Group and a management
consultant at Booz, Allen.
Arnaud was previously a Managing Director at Deutsche
Bank Asset and Wealth Management, where he was
the CIO for the Multi Asset Group. Prior to this he
was a Managing Director at Barclays Wealth, heading
the Global Investment Committee and before that at
Standard & Poor’s where he ran the global quantitative
group.
External appointments
External appointments
External appointments
External appointments
Non-executive director, Pension Insurance Corporation
plc, Royal & Sun Alliance Insurance Limited, Local
Pensions Partnership Ltd and Royal London. Serves
as Honorary Group Captain with 601 Squadron of the
Royal Auxiliary Air Force. Strategic adviser to Darwin
Alternatives.
Member of the UK government’s Energy Innovation
Board. Commissioner with the Energy Transmissions
Commission. In November 2019 Ian was appointed to
the board of the Institutional Investors Group on Climate
Change (“IIGCC”). In September 2022 Ian was appointed
Chair of the CBI’s Decarbonisation Council.
Founder & Managing Partner of StarPoint Advisors, LLC;
Chair, People and Culture Committee, Onward Energy;
Trustee, Pax World Funds; and Director, Seven Islands
Lands Company.
Non-executive directorships of BNP Paribas Asset
Management France, President of Queens Field SAS.
Qualifications and experience
Qualifications and experience
Qualifications and experience
Qualifications and experience
First class honours degree in mathematics from Imperial
College, London. Fellow of the Institute of Actuaries.
35 years’ experience in the UK pensions and actuarial
sector.
First class honours degree in physics from Cambridge
University and a Master’s in Public Administration from
Harvard University.
She currently serves as the Co-Chair of the Center for
Business and Environment at Yale. Lindsey received
an MBA (finance and strategy) and a Masters of
Environmental Studies from Yale University, and her
Bachelor of Arts from Dartmouth College.
Arnaud has been a Visiting and then Adjunct Professor
of Finance at Imperial Business School since 2005. He is
the author of several books on finance, economics and
investment management.
Committee membership and other roles
Committee membership and other roles
Committee membership and other roles
Committee membership and other roles
Remuneration Committee – Member
N/A
Remuneration Committee – Chair
Audit & Risk Committee – Member
Board sponsor, E,D&I
N/A
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Impax Asset Management Group plc
Annual Report and Accounts 2022
95
Board of Directors continued
VINCE O’BRIEN
Non-Executive Director
SIMON O’REGAN
Non-Executive Director
Joined the Board 2009
Joined the Board 2020
ANNETTE WILSON
Non-Executive Director
Joined the Board
June 2022
ZACK WILSON
Group General Counsel
and Company Secretary
Assumed roles 2011
Previous roles and experience
Previous roles and experience
Previous roles and experience
Previous roles and experience
Vince has over 30 years’ experience in the private equity
industry. He served as a director of Montagu Private
Equity for over 23 years. He was part of the core team
which lead the buyout of Montagu from HSBC in 2003.
Prior to that he worked in audit and corporate finance
for Coopers & Lybrand, now PwC.
Simon has 40 years’ experience in the insurance,
pensions and asset management industries. Simon
served as CEO of Mercer in Australia, in the UK, in
Europe and in the USA/Canada. He was formerly a Non-
Executive Director of Alexander Forbes Group Holdings
Ltd and Mercer Africa Limited. He was a member of the
UK’s Nuclear Liabilities Financing Assurance Board until
it submitted its final advice on Hinkley Point in 2015
and served as a Non-Executive Member of the Foreign,
Commonwealth and Development Office’s Audit & Risk
Assurance Committee.
External appointments
Chair of Quest Fund Placement LLP. Board advisory
positions with the private equity firm Montana Capital
Partners and the London branch of a leading Swiss
private bank.
External appointments
None
Qualifications and experience
Chartered accountant, former chairman of the British
Venture Capital Association.
Qualifications and experience
Fellow of the Faculty of Actuaries (UK).
Annette has spent over 20 years in the private equity
and venture capital sector. She is a former Partner and
COO of Finch Capital and was founding CFO of Palamon
Capital Partners, a European growth investor. Prior to
joining the private equity sector, Annette worked in the
insurance sector at Sedgwick plc, a FTSE 100 company
in various roles in the UK, USA and Europe and thereafter
was CFO of Windsor PLC, a LSE listed company. She
started her career at PricewaterhouseCoopers.
Zack was Director & General Counsel for the investment
management group Development Capital Management.
Previously he was Corporate Counsel for Telewest Global
Inc (renamed Virgin Media Inc), where he played a
leading role in managing the successful execution
of a number of high profile transactions. Zack was a
Non-Executive director of Impax Funds (Ireland) plc.
External appointments
External appointments
Non-Executive Director and Chair of the Audit & Risk
Committee, Tech Nation Group Limited. Chair and
Trustee, ADHD Embrace. Chair of Europe and Global
Adviser, Antler VC (Singapore).
Member of the Advisory Board of Prime Advocates
Limited.
Qualifications and experience
Qualifications and experience
B.Com (Hons), University of Johannesburg.
Fellow of the Institute of Chartered Accountants
in England and Wales.
Qualified as a solicitor in 2000 at the global law firm
Norton Rose. Master of Arts in Jurisprudence from
Oxford University.
Committee membership and other roles
Committee membership and other roles
Committee membership and other roles
Committee membership and other roles
Audit & Risk Committee – Chair (until 30 Nov 2022)
Remuneration Committee – Member (until 30 Nov 2022)
Board sponsor, Environment (until 30 Nov 2022)
Senior Independent Director (until 30 Nov 2022)
Audit & Risk Committee – Member
Remuneration Committee – Member
Senior Independent Director (from 30 Nov 2022)
Audit & Risk Committee – Chair (from 30 Nov 2022)
Audit & Risk Committee – Member
Remuneration Committee – Member
Board sponsor, Environment (from 30 Nov 2022)
N/A
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Section
Corporate Governance Report
96
Impax Asset Management Group plc
Annual Report and Accounts 2022
97
Corporate Governance Report
COMPLIANCE WITH QCA CODE
The Directors recognise the importance of good
corporate governance and have chosen to apply
the Quoted Companies Alliance’s Corporate
Governance Code (the “QCA Code”). The correct
application of the QCA code requires the Company
to apply its ten principles and also to publish certain
related disclosures either on our website or in this
Annual Report or a combination of both. We have
chosen to use a combination of both. Our website
includes disclosure, updated annually, considering
each principle in turn and references where the
appropriate disclosure is given. The QCA Code
recommends that all members of a remuneration
committee must be independent. All members of the
Remuneration Committee and Audit & Risk Committee
are considered to be independent in accordance with
the recommendations of the QCA Code.
THE BOARD OF DIRECTORS
The Board deals with all aspects of the Company’s
affairs including setting and monitoring strategy,
reviewing performance, ensuring adequate financial
resources are in place and reporting to shareholders.
The Board reserves these and other specific matters for
its own decision. Operational decisions are delegated
to the Chief Executive and senior management.
Board composition
The Board consists of a Non-Executive Chair, five
Non-Executive Directors and the Chief Executive.
Details of the current Board members are given on
pages 92 to 94 of this report. Throughout the year
the position of Chair and Chief Executive were held
by separate individuals. There is a clear division of
responsibilities between the Chair and Chief Executive.
The Chair’s primary role is to ensure that the Board
and Directors are able to operate effectively, setting
the agenda and format of Board discussions to
promote constructive challenge and sound decision
making. The Chair provides a sounding board for the
Chief Executive and also leads on succession planning
and skills assessments for the Board and Executive
Director roles.
The Chief Executive leads the Executive Team and is
primarily responsible for implementing the Board’s
strategy, communication with shareholders and
managing the activities of the Group other than in
relation to those matters specifically reserved to the
Board or delegated to its Committees.
The Board has appointed one of the Non-Executive
Directors (Simon O’Regan) to act as the Senior
Independent Director. Simon succeeds Vince O’Brien
in this role and also acts as the Board’s Whistleblowing
Champion. The Board considers that the Chair (Sally
Bridgeland) and four of the Non-Executive Directors
(Vince O’Brien, Lindsey Brace Martinez, Simon
O’Regan and Annette Wilson) are independent
as envisaged by the QCA Code.
Board Committees
The Board has two standing Committees: the Audit
& Risk Committee and the Remuneration Committee.
The Board may appoint other Committees from time
to time to consider specific matters. The Audit & Risk
Committee is responsible for overseeing financial
reporting, external audit, risk management, internal
audit, whistleblowing effectiveness, fraud prevention
or detection, and internal controls. Annette Wilson
chairs this committee, succeeding Vince O’Brien
effective 30 November 2022. The Committee’s report
is provided on 105 to 107.
The purpose of the Remuneration Committee is
to ensure that the Chief Executive and other senior
employees are fairly rewarded for their individual
contribution to the overall performance of the
Group and that remuneration packages provided
do not promote undue risk taking. Lindsey Brace
Martinez chairs this committee. The Committee’s
report is provided on 108 to 117. The Board considers
the skills and knowledge of individual members of
each committee upon appointment and periodically,
to ensure that each committee includes members with
appropriate expertise and who are able to offer an
independent outlook. These committees report to the
Board on a regular basis. They have clearly defined
Terms of Reference which are published on the
Company’s website.
Arnaud de Servigny is not considered to be
independent as he represents a significant
shareholder. He does not serve as a member of
either the Remuneration Committee or the Audit
& Risk Committee. Vince O’Brien is not considered
independent according to the UK Governance Code
due to his length of tenure. Vince O’Brien has notified
the Company of his resignation as a Director, which
shall become effective at the AGM in March 2023.
He has retired as Chair and member of the Audit &
Risk Committee, and member of the Remuneration
Committee, effective 30 November 2022. Annette
Wilson succeeds Vince as Chair of the Audit & Risk
Committee and also assumes his role as Board
Sponsor of the employee-led Environment Group.
It is planned that Karen Cockburn, Chief Financial
Officer Designate, will succeed Charlie Ridge as
Chief Financial Officer in January 2023. In due
course it is expected that Karen will join the Impax
Board as an Executive Director. This is expected to
be following the conclusion of the Company’s 2023
AGM, subject to receipt of regulatory approval in
relation to her appointment as a director of the
Company’s FCA regulated subsidiaries.
The Non-Executive Directors and Chair all have or
have had senior executive experience and offer
insightful judgement on Board matters. The Non-
Executive Directors do not participate in any bonus
schemes or share ownership schemes and their
appointments are non-pensionable. The Company
anticipates a time commitment from the Non-
Executive Directors of 20 days per annum. This
includes attendance at regular Board meetings,
participation in the Audit & Risk and Remuneration
Committees and a number of regular meetings to
review and discuss progress with the Executive
team. The Chief Executive works full time in the
business and has no other significant outside
business commitments.
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Impax Asset Management Group plc
Annual Report and Accounts 2022
99
Corporate Governance Report continued
Meeting Attendance
Total Number of meetings
Ian Simm
Vince O’Brien
Sally Bridgeland
Lindsey Brace Martinez
Simon O’Regan
Arnaud de Servigny
Annette Wilson2
Board
Audit & Risk Committee
Remuneration Committee
8
8
8
8
61
8
8
1
5
2 as observer
5 as member
4 as observer
5 as member
5 as member
5 as observer
1 as member
7
7 as observer
7 as member
7 as member
7 as member
7 as member
7 as observer
1 as member
1 Unable to attend one quarterly meeting due to illness and one ad hoc meeting due to unavoidable scheduling conflict.
2 Appointed as Board member 28 June 2022. Attended all Board and Committee meetings held from date of appointment.
Meetings
The Board has a formal agenda of items for
consideration at each meeting but also convenes
at additional times when required. All Directors
receive detailed Board papers and reports
sufficiently in advance of meetings to enable
a proper review and have full access to the advice
and services of senior management should further
information be required. There is provision for Board
members to solicit professional advice on Board
matters at the Company’s expense. The Directors
of the Company during the year and at the date
of this report, details of the number of Board and
committee meetings, and the attendance record
of each Director are shown in the table above.
Appointment of new Directors
There is a rigorous procedure to appoint new
Directors to the Board which is led by the Chair.
At appropriate times the Board considers the
balance of skills, experience, independence and
knowledge of the Group on the Board and its
diversity, how the Board works as a unit and other
factors relevant to its effectiveness. Where new
Board appointments are considered, the search for
candidates will be conducted, and appointments
made, on merit, against objective criteria and with
due regard for the benefits of diversity on the
Board, including gender. The Board also considers
appropriate and effective succession planning.
All Directors are subject to reappointment by
shareholders at the first opportunity after their
appointment and thereafter at intervals of no
more than three years pursuant to the Company’s
Articles of Association. The Board considers it best
practice that all Directors are put up for re-election
at the Annual General Meeting and accordingly
has decided to go beyond the requirements of
the Company’s Articles of Association and require
that all Directors of the Company offer themselves
for re-election.
Performance evaluation
The Board carries out an evaluation of its
performance annually. This year, the Company
engaged Boardroom Review to carry out its first
external evaluation. In parallel to this process,
Directors completed online questionnaires about
their own and the Chair’s performance, which were
followed up with discussions with the Chair. The
Senior Independent Director led the evaluation of
the Chair’s performance. The discussions highlighted
topics for informal briefings, to complement the
existing formal regulatory and cyber-security training,
to ensure that Directors’ knowledge remains up to
date in fast-moving areas. Otherwise, Directors and
the Chair noted improvements in performance since
last year, with discussion and constructive challenge
on strategy and risk appetite being welcomed.
External evaluation
This year, following a formal selection process, the
Company engaged Boardroom Review to conduct
its first external board evaluation. Boardroom
Review is a leading independent specialist board
evaluation firm with extensive experience of
conducting external Board reviews for clients
including FTSE 100/250 companies, private
companies and regulators.
Dr Tracy Long, CEO of Boardroom Review carried
out one-to-one interviews with Board members,
several members of the Executive and the Company
Secretary and reviewed information on the Board
and its process prior to a collective Board workshop
discussing the current strengths of the Board, the
key challenges it faces and how well prepared the
Board is for the future.
Dr Long made strong and positive observations
about the culture and dynamics of the Board, which
were seen as a particular strength and very much
aligned to the Company’s exceptional sense of
purpose. Board members demonstrated significant
relevant knowledge and experience, commitment
to the Company’s values and principles, appropriate
and constructive challenge and diversity of thought.
The Board was considered to be open and
supportive, with a shared strategic perspective and
well organised meetings with a healthy balance
between Executive presentation and Board debate.
Key challenges identified included managing a
period of rapid business and headcount growth,
leadership and talent development and navigating
the highly uncertain macro-economic environment.
As would be expected, there were some
opportunities identified by Dr Long to increase
effectiveness to ensure that the Company
benefits from the combined expertise and insight
of the Board. Areas for focus included aligning
performance objectives for the Board to the scale
of business envisaged in the Company’s business
plan, continued Board development and training,
talent development and succession planning
(including the forums within which they are
discussed), and the evolution of how the Board
oversees risk management. The Board will also
consider further its mix of formal and informal
time, including private sessions and discussions
with both internal and external stakeholders.
Board development
The Board was satisfied that the issues raised
in the previous year’s evaluation had been
addressed, including the increasing importance of
maintaining the Company’s culture and values, talent
management and resourcing, development of the
Board’s non-financial goals and risk appetite and the
evolution of the Board and Committee agendas to
reflect the Company’s increasing size and complexity.
The Board’s annual strategy discussions included
hearing how the investment team is navigating the
turbulent market conditions; hearing about clients’
priorities; a summary from management of the
“Impax 2025” global Senior Leadership meeting; and
discussing developments in the Group’s US business.
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Impax Asset Management Group plc
Annual Report and Accounts 2022
101
Corporate Governance Report continued
Board members maintain and extend their skillsets
through practice in day-to-day roles, enhanced
with attending specific training where required. The
training consists of a combination of online modules,
in-house Company arranged briefings and external
training. The Company Secretary, Chief Risk and
Compliance Officer (Europe & Asia Pacific) and
Chief People Officer support the Chair in addressing
the training and development needs of Directors.
In order to develop awareness and understanding
of the Group’s operations, the Chair ensures there
are additional opportunities for the Non-Executive
Directors to meet with senior management outside
of the Board and its committees.
Resources
The Board uses external advisers to enhance
knowledge or to gain access to particular skills or
capabilities. Accountants and lawyers are used
for diligence work on acquisitions. Specialist
advisers have also been used by the Board to
ensure compliance or to benchmark against peers,
in areas such as internal audit, remuneration and
regulatory compliance.
Indemnity
As permitted by the Company’s Articles of
Association, the Company has maintained qualifying
third-party indemnity provisions (as defined under
relevant legislation) for the benefit of the Company’s
Directors throughout the period.
INTERNAL CONTROL
The Board has overall responsibility for the Group’s
system of internal controls including financial,
operational, compliance and risk management
controls. The Group performs regulated activities in
multiple jurisdictions globally, which are supervised
by a number of supervisory authorities: the UK
Financial Conduct Authority (“FCA”), the US
Securities and Exchange Commission (“SEC”),
the Central Bank of Ireland (“CBI”), and the Hong
Kong Securities and Futures Commission (“SFC”).
The Board has adopted procedures and controls
designed to ensure its obligations are met. Details of
the key risks facing the Group and internal controls
acting to control or mitigate the risks are set out on
pages 76 to 78 of the Strategic Report.
DIALOGUE WITH SHAREHOLDERS
The Company reports formally to shareholders at the
half-year and year end. At the Annual General Meeting
of the Company, a presentation is usually given and
Directors are available to take questions, both formally
during the meeting, and informally after the meeting.
The Chief Executive, Chair and/or Senior Independent
Director are available for dialogue with major
shareholders on the Company’s plans and objectives
and meet with them at appropriate times.
Management (typically the Chief Executive and Chief
Financial Officer) meet formally with institutional
shareholders, usually after the interim and final
results announcements, presenting Company results,
articulating strategy and updating shareholders on
progress. Management also holds webinars and
attend investor forums for private investors. The
Board recognises the Annual General Meeting as an
important opportunity to meet private shareholders.
We have continued to work closely with our brokers,
Peel Hunt and Berenberg, to maintain contact with
institutional investors. In parallel, we have engaged
other groups, including Shares/AJ Bell and Mello
Events, to support our interaction with private
investors and are looking to increase this outreach.
This year the Chair engaged with institutional
shareholders and advisers to discuss improvements
to the disclosures in its Remuneration Report and
has subsequently included increased disclosure of
the Company’s variable remuneration structure and
outcomes in the Report see pages 108 to 117.
CULTURE
Integrity and appropriate conduct are an integral
part of the Impax culture and values, and all our
business activities. The Company undertakes regular
review and monitoring of its policies in specific areas
such as anti-bribery and corruption, anti-money
laundering, Code of Ethics compliance, conflicts of
interest, whistleblowing and information security.
The Company has a strong collegial culture which
continues to evolve. Meritocracy, openness, fairness
and transparency are valued. In June 2022 the Group
carried out an employee engagement survey, now
held annually.
The Group achieved an overall engagement score
of 89%, 7 points above the industry benchmark,
based on a 95% employee response rate. Impax is
committed to equity, diversity and inclusion (“E,D&I”).
Our E,D&I vision is to continue to build an inclusive,
equitable culture where everyone feels they belong,
are valued as an individual, and can thrive. The
Company made strong progress in executing its
E,D&I strategy during the Period. Please see page 45
for more details.
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Directors’ Report
102
Impax Asset Management Group plc
Annual Report and Accounts 2022
103
Directors’ Report | For the year ended 30 September 2022
DIVIDENDS
The Directors propose a final dividend of 22.9 pence
per share (2021: 17.0 pence) which together with the
interim dividend of 4.7 pence per share (2021: 3.6
pence) gives a total for the year ended 30 September
2022 of 27.6 pence per share (2021: 20.6 pence). The
dividend will be submitted for formal approval at the
Annual General Meeting. These financial statements
do not reflect the final dividend payable, which
will be accounted for in shareholders’ equity as an
appropriation of retained earnings in the year ending
30 September 2023.
The final dividend for the year ended 30 September
2021 was paid on 31 March 2022, being 17.0 pence per
share. The trustees of the Impax Employee Benefit
Trusts (“EBT”) waived their rights to part of these
dividends, leading to a total dividend payment of
£22,474,737. The interim dividend of 4.7 pence for the
year ended 30 September 2022 was paid on 22 July
2022 and totalled £6,190,189 after the EBT waiver.
These payments are reflected in the statements of
changes in equity.
SHARES
During the year the Group’s EBT purchased
£1,078,000 ordinary shares. The EBT holds shares
for Restricted Share awards until they vest or to
satisfy share option exercises. The Board will consider
purchasing the Company’s shares from time to time
after due consideration of alternative uses of the
Company’s cash resources. Share purchases are
usually made by the EBTs (subject to the trustees’
discretion), using funding provided by the Company.
DIRECTORS AND THEIR INTERESTS IN SHARES
The Directors of the Company during the year and
at the date of this report are set out below. The
Directors’ interests and those of their connected
persons in the Ordinary Shares of the Company,
all of which are beneficial, at 30 September 2022
and 30 September 2021 were:
Ian Simm1
Vince O’Brien
Sally Bridgeland
Simon O’Regan
Lindsey Brace Martinez2
Arnaud de Servigny
Annette Wilson3
30 September
30 September
2022
2021
9,578,409
9,576,740
116,000
12,000
12,000
12,000
–
–
110,000
6,000
6,000
6,000
–
–
1
Includes vested shares within sub-funds of the Impax Group Employee Benefit
Trust 2004 (“EBT 2004”) from which the individual and their families may benefit.
2 Shares held by Lindsey B. Martinez Trust.
3 Appointed on 28 June 2022.
There have been no changes to the above holdings
since 30 September 2022.
Ian Simm has a 5.88 per cent interest in the capital
of Impax Carried Interest Partner LP, a 5 per cent
interest in the capital of Impax Carried Interest
Partner II LP, a 4 per cent interest in the capital of
INEI III CIP LP and a 4 per cent interest in the capital
of INEI IV CIP SCSp, entities in which the Company
holds an investment.
Ian Simm has 20,000 Restricted Shares awarded
in December 2017 which vest in December 2022,
a further 20,000 Restricted Shares awarded in
February 2019 which vest equally in February 2023
and February 2024, a further 20,000 Restricted
Shares awarded in February 2021 which vest in three
equal tranches between February 2024 and January
2026 and a further 17,500 Restricted Shares awarded
in January 2022 which vest in three equal tranches
between February 2025 and January 2027.
RISK
A description of the key risks facing the Group
and policies and procedures in place to monitor or
mitigate the risk is provided on pages 76 to 79 of
the Group’s Strategic Report.
SUBSTANTIAL SHARE INTERESTS
The following interests in 3 per cent or more of the issued Ordinary Share capital have been notified to the
Company as at 29 November 2022:
BNP Paribas Asset Management Holding
Funds managed by Liontrust Investment Partners LLP
Ian R Simm1
Funds managed by abrdn plc
Funds managed by BlackRock Investment Management
Grandeur Peak Global Advisors, LLC
Funds managed by Janus Henderson Investors
Hargreaves Lansdown Asset Management
Rathbone Investment Managers
Bruce Jenkyn-Jones1
Number
18,258,112
12,084,319
9,578,409
7,518,566
7,476,058
6,706,026
5,832,658
5,501,024
4,784,211
4,401,864
Percentage
13.8
9.1
7.2
5.7
5.6
5.1
4.4
4.1
3.6
3.3
1
Includes vested shares within sub-funds of the EBT 2004 from which the individual and their families may benefit.
In addition, the EBT 2004 has a legal interest in a further 13,950,080 shares which have transferred to
sub-funds from which individuals and their families may benefit.
PEOPLE
Details of our people policies and employee
engagement are provided on pages 40 to 49 of
the Strategic Report.
ENERGY CONSUMPTION
Details of the Group’s energy consumption and
measures taken to achieve energy efficiencies are
provided on page 73 of the Strategic Report.
CREDITOR PAYMENT POLICY
The Group seeks to maintain good terms with its
trading partners. It is the Group’s policy to agree
appropriate terms and conditions for its transactions
with suppliers and, provided the supplier has
complied with its obligations, to abide by the terms
of payment agreed. Trade creditor days of the Group
for the year ended 30 September 2022 were 29
(2021: 25).
CHARITABLE DONATIONS
During the year the Group has made donations
to charities totalling £287,382 (2021: £183,198).
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the
Strategic Report, the Governance Report and the
Group and Parent Company financial statements
in accordance with applicable law and regulations.
Company law requires the Directors to prepare
Group and Parent Company financial statements
for each financial year. As required by the AIM
Rules of the London Stock Exchange they are
required to prepare the Group financial statements
in accordance with UK-adopted international
accounting standards and applicable law and have
elected to prepare the Parent Company financial
statements on the same basis.
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Section
104
Impax Asset Management Group plc
Annual Report and Accounts 2022
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Audit & Risk Committee Report
AUDITORS
Each person who is a Director at the date of approval
of this report confirms that so far as the Director is
aware, there is no relevant audit information of which
the Company’s auditor is unaware and the Director
has taken all the steps that he or she ought to have
taken as Director in order to make himself aware of
any relevant information and to establish that the
Company’s auditors are aware of that information.
This confirmation is given pursuant to the section
418 of the Companies Act 2006 and should be
interpreted in accordance therewith.
By order of the Board
Zack Wilson
Company Secretary
29 November 2022
Registered office:
7th Floor, 30 Panton St
London SW1Y 4AJ
Audit & Risk Committee Report
COMMITTEE MEMBERS
The Audit & Risk Committee is comprised
of the following Non-Executive Directors:
• Vince O’Brien – Chair
(until 30 Nov 2022)
• Annette Wilson – (Member from 28 June
2022; Committee Chair from 30 Nov 2022)
• Lindsey Brace Martinez
• Simon O’Regan
• Sally Bridgeland and Arnaud de Servigny
also attend the meetings
MEETINGS
5
During the year the Committee met five times.
Details of attendance at the meetings are shown
on page 98.
Directors’ Report continued
Under company law the Directors must not approve
the financial statements unless they are satisfied
that they give a true and fair view of the state of
affairs of the Group and Parent Company and of their
profit or loss for that period. In preparing each of the
Group and Parent Company financial statements, the
Directors are required to:
• select suitable accounting policies and then
apply them consistently
• make judgments and estimates that are
reasonable, relevant and reliable
• state whether they have been prepared in
accordance with UK-adopted international
accounting standards
• assess the Group and Parent Company’s ability
to continue as a going concern, disclosing, as
applicable, matters related to going concern and
• use the going concern basis of accounting unless
they either intend to liquidate the Group or the
Parent Company or to cease operations, or have
no realistic alternative but to do so.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the Parent Company’s transactions and
disclose with reasonable accuracy at any time the
financial position of the Parent Company and enable
them to ensure that its financial statements comply
with the Companies Act 2006. They are responsible
for such internal control as they determine is necessary
to enable the preparation of financial statements that
are free from material misstatement, whether due
to fraud or error and have general responsibility for
taking such steps as are reasonably open to them to
safeguard the assets of the Group and to prevent and
detect fraud and other irregularities.
The Directors are responsible for the maintenance
and integrity of the corporate and financial
information included on the Company’s website.
Legislation in the UK governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions.
ROLE AND RESPONSIBILITIES
The Committee’s responsibilities include:
Financial Reporting
• monitoring the integrity of the financial statements
and formal announcements relating to the
Company’s and Group’s financial performance
• the implementation of new accounting standards
and policies
External Auditors
• considering appointment, re-appointment and
removal of the external auditors and approving
the remuneration of the external auditors
• reviewing and monitoring the external
auditors’ independence and objectivity and
the effectiveness of the audit process
• ensuring the objectivity and independence
of the external auditor by acting as primary
contact with the external auditors, meeting
the external auditors without the presence
of management where considered necessary
and receiving all reports directly from the
external auditors
Risk Management
• reviewing the Group’s risk management
processes and risk reports
• monitoring of the internal financial control
procedures
• reviewing the Group’s Internal Capital and
Risk Assessment (“ICARA”) process
• reviewing the Group Risk Appetite Statement
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SectionPage Title
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Impax Asset Management Group plc
Annual Report and Accounts 2022
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Audit & Risk Committee Report continued
Internal Audit
• reviewing an internal audit plan
• reviewing the findings of the internal audits
performed
• monitoring the implementation of agreed
actions from internal audits performed
• monitoring the performance of the internal
auditors
Whistleblowing & Fraud Detection
• reviewing arrangements for Group employees
to raise concerns, in confidence, about possible
wrongdoing or misconduct
• reviewing procedures for detecting fraud
FINANCIAL REPORTING
The Committee has reviewed the Group’s Interim
Report and the Annual Report and accounts and
recommended them to the Board for approval.
The Committee has considered whether suitable
accounting policies have been adopted and whether
management have made appropriate estimates and
judgements when preparing the financial statements.
The Committee received reports from the external
auditor, KPMG on the audit scope and strategy and
their independent assessment of the management
conclusion on key areas of judgements and estimates.
KPMG attended the Committee meetings following
the half and full year ends and met privately with
the Committee.
The Committee supports the Board in its assessment
of going concern. The Committee considered a report
from management setting out a number of factors
such as the Group’s current financial position, budget
and cash flow forecasts, liquidity and the impact
of downside scenarios. The Committee concluded
that it was appropriate to prepare the accounts
on a going concern basis for the year ended
30 September 2022.
EXTERNAL AUDITOR
KPMG LLP has acted as the auditor of the Group
since 2010 when it was appointed following a
competitive tender. Jatin Patel is the current audit
partner and this is the fifth year that he has signed
the audit report. Ethical standards require him to
rotate off following the audit of the year ended 30
September 2022 and a new partner, Alison Allen will
be the audit partner for 2023. A formal audit tender
was held in 2019 and the Committee agreed to
reappoint KPMG.
Details of fees paid to the Company’s auditor are
shown in note 7 to the financial statements. The
Committee considered and agreed the audit fee
during the Period. Total fees paid for non-audit
services, which were all assurance-related, were
£80,000 and 27% of total fees. In the opinion
of the Board, none of the non-audit services
provided caused any concern as to the auditor’s
independence or objectivity. The Committee also
considered if there were any other factors impacting
the auditors independence and objectivity and
concluded that there were none. As part of this
assessment the committee received and considered
a report from KPMG which confirmed that in their
view they were independent.
RISK MANAGEMENT
The Company’s risk management process and
the risks which are considered to be the key risks
facing the Group are described on pages 76 to
79. The committee has received and considered
reports from the Chief Risk Officer and Head of Risk
Management, at each of its Meetings and reviewed
all material risk events and associated reviews of the
control environment.
The Committee oversees the Risk Appetite Statement
and continues to monitor the Group capital adequacy
framework, most notably the review of the a new
UK Internal Capital and Risk Assessment (ICARA)
required under the FCA Investment Firms Prudential
Regime (IFPR).
INTERNAL AUDIT
The Group has appointed Grant Thornton to
provide Internal Audit functions, including audit
universe creation, risk assessment and prioritisation,
fieldwork execution and reporting. Internal Audits are
performed for both business functions and cross-
functional topics. Grant Thornton attend Committee
meetings and independently present their audit
recommendations to the non-executive members.
WHISTLEBLOWING & FRAUD DETECTION
The Group uses an online system called EthicsPoint,
to facilitate the anonymous reporting of concerns
or more serious allegations, such as fraud or other
financial crimes, to independent senior managers
for review and investigation.
Vince O’Brien
Chair of the Audit & Risk Committee
29 November 2022
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“The foundation of our risk
management framework is
a strong risk-aware culture
with clear oversight
responsibilities.
Management actively
monitor both current
and emerging risks.”
Vince O’Brien
Chairman, Audit &
Risk Committee
Section
Remuneration Committee Report
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Impax Asset Management Group plc
Annual Report and Accounts 2022
109
Remuneration Committee Report
COMMITTEE MEMBERS
The Remuneration Committee is comprised
of the following Non-Executive Directors:
• Lindsey Brace Martinez – Chair
• Sally Bridgeland
• Simon O’Regan
• Annette Wilson (from 28 June 2022)
• Vince O’Brien (until 30 November 2022)
MEETINGS
7
During the year the Committee met seven times.
Details of attendance at the meetings are shown
on page 98.
CHAIR’S STATEMENT
On behalf of the Board, I am pleased to present the
Directors’ Remuneration Report for the year ended
30 September 2022 (the “Period” or “financial
year 2022”).
The report sets out the remuneration paid to the
Directors during the Period and provides more
information about the outcome of our recent review
of global compensation practice. As part of this
review, we also enhanced our governance framework
to comply with the requirements under the new
Investment Firm Prudential Regime (IFPR) which
applies to Impax from 1 October 2022 (i.e., the start
of financial year 2023).
Using shareholder feedback to improve our
Remuneration Report
In alignment with best practice and in the spirit
of being progressive, Impax voluntarily puts its
Remuneration Report to a vote at the AGM. At the
2021 AGM, shareholders approved the Remuneration
Report that was published in the 2021 Annual Report.
However, we appreciate that the extent of our
disclosures last year fell short of the expectations
of some shareholders.
For this year’s Report, following engagement with
shareholders and advisers, we have increased
disclosure of the Company’s variable remuneration
structure and outcomes, adding context on how pay
outcomes are determined, and as a result, explaining
the link between the Company’s strategy and
performance and individual reward.
Our disclosures for this year not only give more
insight into the current review processes but also
summarise how performance scorecards have been
used for the Period, setting out more information
for the compensation of our CEO, Ian Simm, and
anticipates the firmwide use of performance
scorecards across the Company in financial
year 2023.
Our remuneration journey
While we believe we have enhanced our disclosures
beyond the requirements for an AIM listed company,
we acknowledge that we are on a journey. The
Company has grown very quickly and until relatively
recently it was viable for the Remuneration
Committee to work with management to discuss
individual salary, bonus and share awards, exercising
discretion to assess performance in the context of
market benchmark data.
Although we currently employ fewer than 300
people, the Board has determined that, as part
of our strategic journey, it is appropriate for the
Company to use a more structured and delegated
approach to remuneration. Drawing on the
experience of our non-executive directors and
working with independent external advisers, the
Board has agreed to introduce changes to how we
assess individual performance ready to be used
in the calculation of variable pay for the financial
year 2023, which will be applied consistently for all
employees, including Executive Directors.
The new approach uses of a two-part scorecard
– Business & Functional performance; and
Collaboration & Culture – with weighted objectives
and clear performance indicators. Each objective
will be assessed using a four-part rating at the
year end. For 2022, we introduced a performance
scorecard for the CEO; CIO, Listed Equities; and CFO.
It is worth mentioning that some things will not
change. Under normal market conditions we will
continue to cap (at 45%) the percentage of adjusted
operating profits that is available for distribution
in the total bonus pool. This ensures that the
Company’s performance is automatically reflected in
variable pay at a firmwide level and hence aligns the
interests between staff and our shareholders in both
good and bad years.
The Remuneration Committee will retain full
discretion on all bonuses, including using the
current process for reviewing the performance
of the senior team members and taking advice
from risk and compliance on whether adjustments
should be made for conduct or for risk-taking
outside the Company’s appetite.
Remuneration outcomes for financial year 2022
As indicated above, total variable remuneration is
capped to ensure alignment with shareholders. The
process adopted by the Remuneration Committee
for reviewing salary and variable pay has been
largely based on individual performance, guided
by market benchmarking. The Committee
explicitly considered the Company’s gender
pay gap as part of its work.
On share-based variable remuneration,
the Committee also considered the
principles for awarding Restricted
Share Scheme (“RSS”) and Long-
Term Option Plan (“LTOP”)
shares to ensure that these
incentives had been used
appropriately both in
the amount and in the
individuals who had
received awards.
“The new approach will
provide more clarity on
the link between
individual performance
and awards, consistently
for all employees.”
Lindsey Brace Martinez
Chair, Remuneration
Committee
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Section
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Impax Asset Management Group plc
Annual Report and Accounts 2022
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Remuneration Committee Report continued
As outlined in the table below, RSS shares are a
retention mechanism for key talent and vest over a
three to five-year period and LTOP options are a way
for senior management to share in the value created
over the long term, with benefits to accrue over a five
to 10-year period.
The Company’s policy is that variable remuneration
of up to 45% of adjusted operating profit before
variable remuneration is available for performance-
related pay in normal circumstances. Included within
this calculation are two Variable Remuneration
Adjustments: (a) the cost related to employer
national insurance payments due on cash bonuses
and equity awards; and (b) the current year’s expense
of share awards.
As a result of its assessment of the performance
of individual members of staff and using the cap
on the bonus pool to reflect the Company’s overall
performance, the Committee has decided to award
variable remuneration of 40% of adjusted operating
profit before variable remuneration for financial year
2022 (the same percentage as 2021).
CEO’s performance
Ian Simm’s objectives during the Period
were grouped in five areas: Group Strategy
& Objectives; Group Management; Financial
Performance; Investment Management; and Group
Investor Relations.
The Remuneration Committee reviewed the Chair’s
appraisal of the CEO’s performance at mid year and
year end, rating his objectives for the year using
the four-part scale which is being introduced for
all employees from next year. The Committee also
discussed with the CEO his assessment of the senior
team’s performance and debated where adjustments
might be appropriate.
Based on overall business performance and his
personal achievements against his performance
scorecard, the Committee decided to award Ian
Simm a bonus payment of £1,800,000 plus 12,250
restricted shares under the Group Restricted Share
Scheme (“RSS”). In determining this award, the
Committee has taken into account the significant
shareholdings of 7.2% of the issued Ordinary Share
Capital he has as Founder and Chief Executive
which continue to provide long-term alignment to
shareholders’ interests. The Committee noted that
a different balance between cash and shares was
appropriate for newer senior hires.
Further detail regarding the remuneration outcomes
for financial year 2022 is set out below.
Looking forward to financial year 2023
For financial year 2023 there is a 5% budget for
salary increases for all employees including Executive
Directors. Ian Simm’s salary of £300,000 was
effective 1 January 2022 which was based on a
benchmarking review to better align with other CEO’s
pay in the market. There will be no change to Ian
Simm’s base salary.
During financial year 2023, the performance of
each member of staff will be assessed against a
performance scorecard covering two categories –
Business & Functional Performance and Collaboration
& Culture. At the end of the financial year, the
scorecards will be used to guide performance
assessments that will inform discretionary
bonus decisions.
We will continue to reflect on the merits of and
options for deferring additional elements of
performance-related pay across the Company.
As part of IFPR, there is a maximum variable to
fixed pay ratio for all employees, including Executive
Directors. Furthermore, all remuneration awards will
be made subject to malus and clawback provisions.
This year’s report is split into three main sections to
enable ready access to information which may be of
specific interest to shareholders:
1.
2.
A summary of the Company’s remuneration
structure and this year’s remuneration outcome
for the CEO;
Details of the Executive and Non-Executive
Directors’ remuneration for financial year 2022,
including the Remuneration Committee’s
assessment of the CEO’s performance for
financial year 2022; and
3. The CEO’s performance objectives for
financial year 2023.
Together with my colleagues on the Remuneration
Committee I would welcome your support for the
Remuneration Committee Report.
Lindsey Brace Martinez
Chair, Remuneration Committee
29 November 2022
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SectionPage Title
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Impax Asset Management Group plc
Annual Report and Accounts 2022
113
Remuneration Committee Report continued
REMUNERATION COMMITTEE’S ACTIVITIES DURING THE YEAR
During the past year, the Committee met seven times to undertake the following:
• Objectives setting and approval of performance scorecards for the Chief Executive, Chief Investment
Officer (Listed Equities) and Chief Financial Officer for financial year 2022;
• Approval of performance scorecard and variable incentive target approach for financial year 2023;
• Review the overall remuneration policy to ensure that this is designed to be in line with the business
strategy, objectives and long-term interests of the wider group.
• Approval of all remuneration and share-based awards.
• Ensure that the Company’s policies and practices are compliant with the relevant FCA Remuneration
Codes and associated remuneration-related regulations.
• Review and recommendation of updates to the Terms of Reference of the Remuneration Committee.
• Review and recommendation to the Board on division of responsibilities per the Terms of Reference
of the Committee.
OVERVIEW OF IMPAX REMUNERATION POLICY FOR FINANCIAL YEAR 2022
The table below provides an overview of Impax key remuneration elements.
Element
Overview of Impax’s policy
Basic salary, pension,
and benefits
Purpose: Base salary is set at an appropriate level to attract and retain a suitable
calibre of talent for the role. Pension and benefits are market competitive to aid
recruitment and retention.
Policy: Basic salaries are recommended to the Board by the Remuneration
Committee taking into account the performance of the individual and the rate
for similar positions in comparable companies.
The Group pays a defined contribution to the pension schemes of certain employees.
The individual pension schemes are private, and their assets are held separately from
those of the Group.
Benefits include income protection, critical illness insurance, life assurance and
private medical insurance.
Element
Overview of Impax’s policy
Annual bonus
Purpose: To reward individual performance and contribution to the delivery of the
strategy and business performance during the year.
Policy: Bonus awards are determined by discretion taking into account the
profitability of the relevant area where the employee works and the individual’s
personal performance.
Share-based awards
Impax operates two long-term equity incentive plans for the Executive Director and
senior employees – the Restricted Share Scheme (“RSS”) and the Long-Term Option
Plan (“LTOP”).
Restricted Share Scheme (“RSS”)
Purpose: To provide alignment to the long-term success of Impax and a retention
mechanism for key talent.
Policy: Shares awarded to employees are initially held by a nominee and
awards will vest in equal tranches (one-third) over years 3, 4 and 5, subject to
continued employment. At the point of vesting, employees will gain unfettered
access to the shares.
Long-Term Option Plan (“LTOP”)
Purpose: To enhance senior management skin-in-the-game by allowing them to share
in the value-created over the long term.
Policy: Options awarded under the LTOP have a pre-defined exercise price. Options
will vest after five years subject to continuous employment and are then subject to
a holding period of a further five years.
The CEO and certain senior employees are eligible to receive interests in Impax Carried Interest Partner LP,
Impax Carried Interest Partner II LP, INEI III CIP LP and INEI IV CIP (the “Partnerships”). The Partnerships will
receive payments from the Group’s private equity funds depending on the fund’s performance.
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SectionPage Title
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Impax Asset Management Group plc
Annual Report and Accounts 2022
115
Remuneration Committee Report continued
DIRECTORS’ REMUNERATION DURING THE YEAR
Details of each Director’s remuneration are shown below.
Executive director (CEO)
Ian Simm
Non-executive directors
Sally Bridgeland
Vince O’Brien
Lindsey Brace Martinez
Simon O’Regan
Arnaud de Servigny
Annette Wilson6
Salary/
Fees
£
Benefits1
£
Annual
Bonus
£
RSS2
£
LTOP3
£
2022
total
£
2021
total4
£
293,7505
9,002 1,800,000
91,875
– 2,194,627 2,537,671
121,250
79,750
83,488
67,500
67,500
18,307
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
121,250
102,718
79,750
70,000
83,488
62,763
67,500
49,154
67,500
60,000
18,307
NA
1 Taxable benefits represent pension, medical cover, life, income protection and critical illness insurances.
2 Estimated grant date valuation of 12,250 units of restricted shares awarded.
3 No Long-Term Option Plan (LTOP) awarded.
4
5
Ian Simm’s total remuneration granted for 2021 financial year consisted of 17,500 restricted shares (grant value of £241,150), bonus of £2 million, salary of £287,643
and benefits of £8,878.
Ian Simm’s annual salary for the period from 1 October 2021 to 31 December 2021 was £275,000. This increased to £300,000 for the period from 1 January 2022 to
30 September 2022.
6 Annette Wilson was appointed as a non-executive director effective from 28 June 2022.
Ian Simm did not exercise any options during the Period (2021: 100,000 options exercised, with a gain of
£613,100). 30,000 restricted shares held by Ian Simm vested during the year when the shares were valued
at £376,385 (2021: £122,744). Ian Simm was granted 17,500 restricted shares under the Group Restricted
Share Scheme (“RSS”) in January 2022, which vest in three annual tranches between February 2025 and
February 2027. At the end of the Period, Ian Simm held no options (2021: nil) and 77,500 restricted shares
(2021: 90,000).
Ian Simm received an additional interest of 4% in one of the carried interest partnerships during financial
year 2022.
Lindsey Brace Martinez is also a Director of the Board of Pax World Funds acting as the Group’s
Representative on this Board. The Company paid her £65,052 for this service (2021: £55,318).
Annual bonus – Performance scorecard assessment
During financial year 2022 the board agreed objectives for the CEO in five categories. These are set out in
the table below, which also includes a summary of the CEO’s performance. The Remuneration Committee
considered this performance when determining the Chief Executive’s annual bonus for financial year 2022.
Performance highlights
Group Strategy & Objectives
The Company made significant progress in preparing for its next phase of growth
and now has a detailed plan to guide this expansion. Despite challenging market
conditions, the Company continued to receive positive net inflows of £2.9 billion, a
strong performance compared to peers. The Company also successfully completed the
integration of Pax World Management, a business based in the United States that Impax
acquired in 2018.
Group Management
The Company continued to pay close attention to the development of its culture.
Headcount increased from 217 to 272 during financial year 2022 and the Company
proved to be an attractive destination for recruits. Staff retention was 90%, which
is very good by sector standards; and staff satisfaction was very high, as indicated
by a strong engagement score. In addition, the Company completed a number of
restructuring projects, including the adoption of a new Leadership Advisory Group and
the strengthening of the Client Service & Business Development function.
Financial Performance
Revenue grew 23% to £175 million this year driven by positive net flows across the
business offset in part by market falls. Operating profit margin fell moderately from
39.0% to 38.4% and adjusted profit before tax increased to £68.4m. The Company
increased its headcount and resources in order to progress its business plan, but, with an
eye to the nearer term financial results, calibrated this expansion in light of challenging
market conditions and an uncertain economic outlook.
Investment Management
During the financial year, Impax’s AUM fell by 4.1% to £35.7 billion. This was driven by
positive net flows of £2.9 billion which were offset by a decline of £4.4 billion due to market
movements, investment performance and the impact of foreign exchange movements.
Longer-term performance of investment strategies remained strong with eight out of the
ten largest strategies continuing to outperform benchmarks over three years.
CEO performance
assessment
Producing an
Exceptional Contribution
Delivering to a High Bar
Delivering to a High Bar
Delivering to a High Bar
Group Investor Relations
During financial year 2022, the Company’s share price fell by 54% from £11.52 to £5.25;
however, the valuation rating of the Company’s shares remained in the top quartile of the
peer group and analyst coverage of the Company remained positive.
Making Progress
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SectionPage Title
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Impax Asset Management Group plc
Annual Report and Accounts 2022
117
Remuneration Committee Report continued
Payments to past Directors
No payments were made to past Directors during financial year 2022.
DIRECTORS’ INTERESTS IN SHARES
The Directors’ beneficial interests in the Company’s ordinary share capital are disclosed on page 102.
Payments for loss of office
There have been no payments made to Directors for loss of office during financial year 2022.
CEO PERFORMANCE OBJECTIVES FOR FINANCIAL YEAR 2023
Looking forward to financial year 2023, the Board recognises that the Company has a wealth of opportunities
in an increasingly competitive space. As Impax grows, economic conditions and market sentiment will
continue to shape our revenues, while increasing regulatory requirements and the necessity of a robust risk
and compliance culture will inevitably add to costs. Faced with strong growth in the team, collaboration
and inclusion will be vital in ensuring that Company’s successful business development continues and that
decisions are resilient and well understood.
The CEO will again be responsible for charting Impax’s course through volatile markets, ensuring that the
Company makes the most of the opportunities to launch new products and attract new clients, while assuring
the service we give to our established customers. In planning the year ahead, the Board has considered a
number of different market scenarios to understand the levers that the CEO may need to pull during the year
to manage the business successfully.
We have summarised the CEO’s objectives in a scorecard and will use relevant key performance indicators
(“KPIs”) to measure success. The table below shows the high level objectives and examples of the KPIs. These
will be monitored as the year progresses and discussed at Board meetings, forming inputs to the assessment
of the CEO’s performance and use of discretion by the Remuneration Committee at the year end.
Scorecard
Illustrative KPIs
Weighting
Business & Functional
Performance (70%)
Development of the business to
realise the Company’s potential
Assets under Management; new products
and clients
Robust financial performance
in challenging markets
Profitability/margins; headcount;
investment in compliance, risk and systems
Servicing existing clients
Client satisfaction; investment outcomes in
line with agreed processes; regretted client
outflows; investment in client service
Improving communication
with investors
Feedback from shareholders; share register
diversification; share price rating vs peers
20%
20%
20%
10%
Collaboration &
Culture (30%)
Building a resilient, inclusive
culture as the Company grows
Staff engagement; regretted staff turnover
30%
SERVICE CONTRACTS
The Chief Executive is employed under a contract requiring one year’s notice from either party. The Chair
and Non-Executive Directors each receive payments under appointment letters which are terminable by
three months’ notice from either party.
NON-EXECUTIVE DIRECTORS’ REMUNERATION POLICY
The Chair and the Non-Executive Directors each receive a fee for their services. The fee is approved by
the Board, mindful of the individual’s time commitment and responsibilities and of current market rates for
comparable organisations and appointments. The Non-Executive Directors and the Chair are reimbursed for
their travelling and other minor expenses incurred. No Director participates in the decision in respect of their
own fees. Non-Executive Directors do not receive performance-related compensation and are not provided
with pension related benefits.
EXTERNAL ADVISERS
The Remuneration Committee had recourse to external advice from PwC in relation to employee
compensation, remuneration practices, governance and regulatory requirements, McLagan in relation to
external market benchmarking, and BDO LLP in relation to the Company’s share plans.
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SectionPage Title
Financial Statements
118
Impax Asset Management Group plc
Annual Report and Accounts 2022
119
Financial
Statements
120 Independent Auditor’s Report
129 Consolidated Income Statement
129 Consolidated Statement of
Comprehensive Income
130 Consolidated Statement of
Financial Position
132 Consolidated Statement of
Changes in Equity
134 Consolidated Cash Flow Statement
136 Notes to the Financial Statements
176 Company Statement of Financial Position
178 Company Statement of Changes in
Equity
179 Company Statement of Cash Flows
180 Notes to the Company Financial
Statements
191 Notice of Annual General Meeting
195 Memberships
196 Alternative Performance Measures
198 Officers & Advisers
“ Impax has reported strong
growth in revenue and
profits and is in good
financial health.”
Charlie Ridge
Chief Financial Officer
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Independent Auditor’s Report
120
Impax Asset Management Group plc
Annual Report and Accounts 2022
121
Independent Auditor’s Report | to the members of Impax Asset Management Group plc
Overview
Materiality:
Group financial
statements as a
whole
Coverage
£3,620k (2021: £2,040k)
5.0% of Group profit
before tax (2021: 4.5% of
Group profit before tax)
92% (2021: 91%) of
Group profit before tax
Key audit matters
vs 2021
Recurring risks
Revenue recognition
Recoverability of
Parent Company’s
investment in
subsidiaries and
non-current
intercompany debtors
1 OUR OPINION IS UNMODIFIED
We have audited the financial statements of Impax
Asset Management Group plc (“the Company”) for
the year ended 30 September 2022 which comprise
the consolidated income statement, consolidated
statement of comprehensive income, consolidated
statement of financial position, consolidated
statement of changes in equity, consolidated cash
flow statement, company statement of financial
position, company statement of changes in equity,
company statement of cash flows, and the related
notes, including the accounting policies in notes
31 and 32.
In our opinion:
• the financial statements give a true and fair view
of the state of the Group’s and of the Parent
Company’s affairs as at 30 September 2022 and
of the Group’s profit for the year then ended;
• the Group financial statements have been properly
prepared in accordance with UK adopted
international accounting standards;
• the Parent Company financial statements have
been properly prepared in accordance UK-adopted
international accounting standards and as applied
in accordance with the provisions of the Companies
Act 2006; and
• the financial statements have been prepared in
accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with
International Standards on Auditing (UK) (“ISAs
(UK)”) and applicable law. Our responsibilities are
described below. We have fulfilled our ethical
responsibilities under, and are independent of the
Group in accordance with, UK ethical requirements
including the FRC Ethical Standard as applied to
listed entities. We believe that the audit evidence we
have obtained is a sufficient and appropriate basis for
our opinion.
2 KEY AUDIT MATTERS: OUR ASSESSMENT OF RISKS OF MATERIAL MISSTATEMENT
Key Audit Matters (KAM) are those matters that, in our professional judgement, were of most significance in
the audit of the financial statements and include the most significant assessed risks of material misstatement
(whether or not due to fraud) identified by us, including those which had the greatest effect on: the overall
audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters. In arriving at our
audit opinion above, the key audit matters, in decreasing order of audit significance, were as set out below
(unchanged from 2021).
Revenue recognition –
recurring management
fee income
(£172.3 million* of the
£175.4 million revenue
balance; 2021: £139.0
million)
Refer to page 170
accounting policy and
page 141 (financial
disclosures).
*US distribution fees
and non-recurring
dealing fees have been
excluded from the
KAM
The risk
Our response
Data capture and calculation error
Revenue is the most significant item in
the Consolidated Income Statement and
represents an area that had the greatest
effect on the overall group audit.
Revenue largely comprises of recurring
management income which results from
the business activities of the Group. The
two key components to management
fee calculations are fee rates to be
applied and the amount of assets
under management. The following are
identified as the key risks for recurring
fee income:
• Risk in relation to fee rates: There
is a risk that fee rates have not been
entered appropriately into the fee
calculation when new clients are
on boarded or agreements are
amended.
• Risk in relation to assets under
management (“AUM”): There is a risk
that AUM data is not complete or/and
accurate.
• Risk in relation to calculation of
management fee income: There is
a risk that management fee income
is incorrectly calculated.
We performed the tests below rather than
seeking to rely on any of the Group’s
controls because the nature of the balance
is such that we would expect to obtain
audit evidence primarily through the
detailed procedures described.
Our procedures included:
Procedures in relation to fee rates:
• Test of details: We agreed a selection
of fee rates used in the calculation to the
original investment management
agreements, fee letters or fund
prospectuses outlining the latest effective
fee rate.
Procedures in relation to AUM:
• Test of details: For a sample of AUM used
in the calculation of revenue we obtained
independent confirmation of the AUM
from the third party custodian or
administrator, where appropriate.
General procedures:
• Test of details: We independently
recalculated 100% of all material recurring
management fee transactions for in scope
components with reference to the signed
investment management agreement, fee
letter or fund prospectuses and the AUM.
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122
Impax Asset Management Group plc
Annual Report and Accounts 2022
123
Independent Auditor’s Report continued
Recoverability of
Parent Company’s
investment in
subsidiaries and
non-current
intercompany debtors
(£61.9 million;
2021: £58.9 million)
Refer to page 182
(accounting policy)
and page 182
(financial disclosures).
The risk
Low risk, high value
The carrying amount of the Parent
Company’s investments in subsidiaries
and intercompany debtor represents
80% (2021: 76%) of the Parent Company
total assets.
The intercompany debtor (£13.8m)
represents a loan to IAM US Holdco.
Their recoverability is not considered
to contain a high risk of significant
misstatement or be subject to a
significant judgement. However due to
their materiality in the context of the
Parent Company financial statements
this is considered to be the area that had
the greatest effect on our overall Parent
Company audit.
Our response
We performed the tests below rather than
seeking to rely on any of the Group’s
controls because the nature of the balance
is such that we would expect to obtain
audit evidence primarily through the
detailed procedures described.
Our procedures included:
• Test of details: Comparing the carrying
amount of 100% of investments and
intercompany debtors with the
subsidiaries’ draft balance sheet to
identify whether their net assets, being an
approximation of their minimum
recoverable amount, were in excess of
their carrying amount and therefore
coverage exists of the debt owed,
as well as assessing whether those
subsidiaries have historically been
profit making.
• Comparing valuations: For investments
where the carrying amount exceeded the
net asset value of the company,
comparing the carrying amount of the
investment with the expected value of the
business based on a value in use
calculation.
Of the Group’s 22 (2021: 24) components, we
subjected 4 (2021: 4) to full scope audits for
group purposes.
The components within the scope of our work
accounted for the percentages illustrated on the next
page.
The remaining 8% (2021: 9%) of Group profit before
tax, 6% (2021: 3%) of total Group assets and 1%
(2021: 1%) of total Group revenue is represented by
18 (2021: 20) components, none of which individually
represented more than 6% (2021: 6%) of any of total
Group revenue, Group profit before tax or total Group
assets. For these residual components, we performed
analysis at an aggregated group level to re-examine
our assessment that there were no significant risks
of material misstatement within these.
The audit of the components and the Parent
Company was performed by the Group team. The
component materiality ranged from £557k (2021:
£229k) to £3,077k (2021: 1,428k) having regard to
the mix of size and risk profile of the Group across
the components.
The scope of the audit work performed was fully
substantive as we did not place reliance upon the
Group’s internal control over financial reporting.
3 OUR APPLICATION OF MATERIALITY AND AN
OVERVIEW OF THE SCOPE OF OUR AUDIT
Materiality for the Group financial statements
as a whole was set at £3,620k (2021: £2,040k),
determined with reference to a benchmark of
Group profit before tax of which it represents
5.0% (2021: 4.5%).
Materiality for the Parent Company financial
statements as a whole was set at £776k (2021: £751k),
determined with reference to a benchmark
of the Parent Company total assets, of which it
represents 1.03 % (2021: 1.00%).
In line with our audit methodology, our procedures
on individual account balances and disclosures
were performed to a lower threshold, performance
materiality, so as to reduce to an acceptable level
the risk that individually immaterial misstatements
in individual account balances add up to a material
amount across the financial statements as a whole.
Performance materiality was set at 75% (2021: 75%)
of materiality for the financial statements as a whole,
which equates to £2,715k (2021: £1,530k) for the
Group and £582k (2021: £563k) for the Parent
Company. We applied this percentage in our
determination of performance materiality because
we did not identify any factors indicating an elevated
level of risk.
We agreed to report to the Audit & Risk Committee
any corrected or uncorrected identified
misstatements exceeding £181k (2021: £102k), in
addition to other identified misstatements that
warranted reporting on qualitative grounds.
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Impax Asset Management Group plc
Annual Report and Accounts 2022
125
Independent Auditor’s Report continued
4 GOING CONCERN
The directors have prepared the financial statements
on the going concern basis as they do not intend to
liquidate the Group or the Parent Company or to
cease their operations, and as they have concluded
that the Group and the Parent Company’s financial
position means that this is realistic. They
have also concluded that there are no material
uncertainties that could have cast significant doubt
over their ability to continue as a going concern for at
least a year from the date of approval of the financial
statements (“the going concern period”).
We used our knowledge of the Group, its industry,
and the general economic environment to identify
the inherent risks to its business model and analysed
how those risks might affect the Group’s and
Company’s financial resources or ability to continue
operations over the going concern period. The risk
that was considered most likely to adversely affect
the Group’s and Company’s available financial
resources over this period was:
• The impact of adverse movements in the value
of assets under management
We considered whether this risk could plausibly
affect the liquidity in the going concern period by
comparing severe, but plausible downside scenarios
that could arise from this risk against the level of
available financial resources indicated by the Group’s
financial forecast.
We considered whether the going concern disclosure
in note 2 to the financial statements gives a full and
accurate description of the directors’ assessment of
going concern, including the identified risk and
dependencies.
Group profit before tax
£72.5m (2021: £45.8m)
Group materiality
£3,620k (2021: £2,040k)
Group PBT
Group materiality
£3,620k
Whole financial statements
materiality (2021: £2,040k)
£2,715k
Whole financial
statements performance
materiality (2021: £1,530k)
Range of materiality at 4
components (£577k to £3,077k)
(2021: £229k to £1,428k)
£181k
Misstatements reported
to the Audit & Risk Committee
(2021: £102k)
Group revenue
Group profit before tax
1
1
99%
(2021: 99%)
99
99
Group total assets
3
6
94%
(2021: 97%)
94
97
9
8
92%
(2021: 91%)
92
91
Full scope for group audit
purposes 2021
Residual components 2021
Full scope for group audit
purposes 2022
Residual components 2022
Our conclusions based on this work:
• we consider that the directors’ use of the going
concern basis of accounting in the preparation
of the financial statements is appropriate;
• we have not identified, and concur with the
directors’ assessment that there is not, a material
uncertainty related to events or conditions that,
individually or collectively, may cast significant
doubt on the Group’s ability to continue as a
going concern for the going concern period; and
• we found the going concern disclosure in note 2 to
be acceptable;
However, as we cannot predict all future events or
conditions and as subsequent events may result in
outcomes that are inconsistent with judgements that
were reasonable at the time they were made, the
above conclusions are not a guarantee that the
Group or the Company will continue in operation.
5 FRAUD AND BREACHES OF LAWS AND
REGULATIONS – ABILITY TO DETECT
Identifying and responding to risks of material
misstatement due to fraud
To identify our risks of material misstatement due to
fraud (fraud risks) we assessed events or conditions
that could indicate an incentive or pressure to
commit fraud or provide an opportunity to commit
fraud. Our risk assessment procedures included:
• Enquiring of directors, the Group Audit & Risk
Committee, the Group’s Compliance team and
inspection of policy documentation as to the
Group’s high-level policies and procedures to
prevent and detect fraud, as well as whether
they have knowledge of any actual, suspected
or alleged fraud
• Reading Board minutes and attending Group
Audit & Risk Committee meetings; and
• Considering remuneration incentive schemes and
performance targets for management and directors.
We communicated identified fraud risks throughout
the audit team and remained alert to any indications
of fraud throughout the audit.
As required by auditing standards, and taking into
account possible pressures to meet profit targets,
we perform procedures to address the risk of
management override of controls, in particular the risk
that Group and component management may be in
a position to make inappropriate accounting entries.
On this audit we do not believe there is a fraud risk
related to revenue recognition because there is limited
management judgement involved in the valuation
and recognition of all material revenue streams.
We did not identify any additional fraud risks.
We performed procedures including:
• Identifying journal entries and other adjustments
to test for all full scope components based on risk
criteria and comparing the identified entries to
supporting documentation. These included, but
were not limited to, journals containing descriptions
that were identified as high risk in our risk
assessment procedures.
Identifying and responding to risks of material
misstatement due to non-compliance with laws
and regulations
We identified areas of laws and regulations that could
reasonably be expected to have a material effect on
the financial statements from our general commercial
and sector experience and through discussion with
the directors and other management (as required by
auditing standards), and discussed with the directors
and other management the policies and procedures
regarding compliance with laws and regulations.
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Impax Asset Management Group plc
Annual Report and Accounts 2022
127
Independent Auditor’s Report continued
As the Group is regulated, our assessment of risks
involved gaining an understanding of the control
environment including the Group’s procedures for
complying with regulatory requirements.
We communicated identified laws and regulations
throughout our team and remained alert to any
indications of non- compliance throughout the audit.
The potential effect of these laws and regulations on
the financial statements varies considerably. Firstly,
the Group is subject to laws and regulations that
directly affect the financial statements including
financial reporting legislation (including related
companies legislation), distributable profits
legislation and taxation legislation and we assessed
the extent of compliance with these laws and
regulations as part of our procedures on the related
financial statement items.
Secondly, the Group is subject to many other laws
and regulations where the consequences of non-
compliance could have a material effect on amounts
or disclosures in the financial statements, for instance
through the imposition of fines or litigation. We
identified the following areas as those most likely
to have such an effect: AIM Rules, specific areas of
regulatory capital and liquidity, conduct including
Client Assets, money laundering, market abuse
regulations, US Securities and Exchange Commission
regulations and certain aspects of company
legislation recognising the financial and regulated
nature of the Group’s activities and its legal form.
Auditing standards limit the required audit
procedures to identify non-compliance with these
laws and regulations to enquiry of the directors and
other management and inspection of regulatory and
legal correspondence, if any. Therefore, if a breach
of operational regulations is not disclosed to us or
evident from relevant correspondence, an audit
will not detect that breach.
We assessed the legality of the distributions in the
period based on the level of distributable profits.
CONTEXT OF THE ABILITY OF THE AUDIT TO
DETECT FRAUD OR BREACHES OF LAW OR
REGULATION
Owing to the inherent limitations of an audit, there is
an unavoidable risk that we may not have detected
some material misstatements in the financial
statements, even though we have properly planned
and performed our audit in accordance with auditing
standards. For example, the further removed non-
compliance with laws and regulations is from the
events and transactions reflected in the financial
statements, the less likely the inherently limited
procedures required by auditing standards would
identify it.
In addition, as with any audit, there remained a higher
risk of non-detection of fraud, as these may involve
collusion, forgery, intentional omissions,
misrepresentations, or the override of internal
controls. Our audit procedures are designed to detect
material misstatement. We are not responsible for
preventing non-compliance or fraud and cannot be
expected to detect non-compliance with all laws
and regulations.
6. WE HAVE NOTHING TO REPORT ON THE OTHER
INFORMATION IN THE ANNUAL REPORT
The directors are responsible for the other
information presented in the Annual Report together
with the financial statements. Our opinion on the
financial statements does not cover the other
information and, accordingly, we do not express an
audit opinion or, except as explicitly stated below,
any form of assurance conclusion thereon.
Our responsibility is to read the other information
and, in doing so, consider whether, based on our
financial statements audit work, the information
therein is materially misstated or inconsistent with the
financial statements or our audit knowledge. Based
solely on that work we have not identified material
misstatements in the other information.
Strategic report and directors’ report
Based solely on our work on the other information:
• we have not identified material misstatements in the
strategic report and the directors’ report;
• in our opinion the information given in those reports
for the financial year is consistent with the financial
statements; and
• in our opinion those reports have been prepared in
accordance with the Companies Act 2006.
7. WE HAVE NOTHING TO REPORT ON THE OTHER
MATTERS ON WHICH WE ARE REQUIRED TO
REPORT BY EXCEPTION
Under the Companies Act 2006, we are required
to report to you if, in our opinion:
• adequate accounting records have not been kept
by the Parent Company, or returns adequate for
our audit have not been received from branches
not visited by us; or
• the Parent Company financial statements are not in
agreement with the accounting records and returns;
or
• certain disclosures of directors’ remuneration
specified by law are not made; or
• we have not received all the information and
explanations we require for our audit.
We have nothing to report in these respects.
8. RESPECTIVE RESPONSIBILITIES
Directors’ responsibilities
As explained more fully in their statement set out
on page 104, the directors are responsible for: the
preparation of the financial statements including
being satisfied that they give a true and fair view;
such internal control as they determine is necessary
to enable the preparation of financial statements that
are free from material misstatement, whether due
to fraud or error; assessing the Group and Parent
Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going
concern; and using the going concern basis of
accounting unless they either intend to liquidate the
Group or the Parent Company or to cease operations,
or have no realistic alternative but to do so.
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Impax Asset Management Group plc
Annual Report and Accounts 2022
129
Independent Auditor’s Report continued
Consolidated Income Statement | For the year ended 30 September 2022
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance
about whether the financial statements as a whole
are free from material misstatement, whether due to
fraud or error, and to issue our opinion in an auditor’s
report. Reasonable assurance is a high level of
assurance, but does not guarantee that an audit
conducted in accordance with ISAs (UK) will always
detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are
considered material if, individually or in aggregate,
they could reasonably be expected to influence the
economic decisions of users taken on the basis of the
financial statements.
A fuller description of our responsibilities is provided
on the FRC’s website at www.frc.org.uk/
auditorsresponsibilities.
9. THE PURPOSE OF OUR AUDIT WORK AND TO
WHOM WE OWE OUR RESPONSIBILITIES
This report is made solely to the Company’s
members, as a body, in accordance with Chapter 3
of Part 16 of the Companies Act 2006. Our audit
work has been undertaken so that we might state
to the Company’s members those matters we are
required to state to them in an auditor’s report and
for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to
anyone other than the Company and the Company’s
members, as a body, for our audit work, for this
report, or for the opinions we have formed.
Jatin Patel
(Senior Statutory Auditor) for and on
behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square, London
29 November 2022
Revenue
Operating costs
Finance income
Finance expense
Profit before taxation
Taxation
Profit after taxation
Earnings per share
Basic
Diluted
Dividends per share
Notes
6
7
10
11
12
2022
£000
175,396
(110,213)
7,950
(574)
72,559
(13,077)
59,482
2021
£000
143,056
(95,622)
286
(1,971)
45,749
(5,504)
40,245
13
13
46.0p
44.7p
31.5p
30.3p
Interim dividend paid and final dividend declared for the year
14
27.6
20.6p
Adjusted results are provided in Note 4.
Consolidated Statement of Comprehensive Income
For the year ended 30 September 2022
Profit for the year
Change in value of cash flow hedges
Tax on change in value of cash flow hedges
Exchange differences on translation of foreign operations
Total other comprehensive income
Total comprehensive income for the year attributable to equity holders of the Parent
2022
£000
59,482
–
–
2,685
2,685
62,167
2021
£000
40,245
137
(26)
(1,075)
(964)
39,281
All amounts in other comprehensive income may be reclassified to income in the future.
The statement has been prepared on the basis that all operations are continuing operations.
The notes on pages 136 to 175 form part of these financial statements.
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Consolidated Statement of
Financial Position
130
Impax Asset Management Group plc
Annual Report and Accounts 2022
131
Consolidated Statement of Financial Position | As at 30 September 2022
Company No: 03262305
Assets
Goodwill
Intangible assets
Property, plant and equipment
Deferred tax assets
Total non-current assets
Trade and other receivables
Investments
Current tax asset
Cash invested in money market funds
Cash and cash equivalents
Total current assets
Total assets
Equity and liabilities
Ordinary shares
Share premium
Merger reserve
Exchange translation reserve
Retained earnings
Total equity
2022
2021
Notes
£000
£000
£000
£000
15
16
17
12
18
19
21
21
24
13,932
18,340
9,279
4,781
38,769
7,255
176
58,687
52,232
1,326
9,291
1,533
3,059
122,969
11,816
17,473
9,435
11,895
46,332
50,619
157,119
203,451
39,800
7,564
134
38,066
36,172
1,326
9,291
1,533
374
97,998
138,178
110,522
Trade and other payables
Lease liabilities
Current tax liability
Total current liabilities
Lease liabilities
Deferred tax liability
Total non-current liabilities
Total equity and liabilities
2022
2021
Notes
22
17
£000
53,624
1,488
2,202
17
12
7,590
369
£000
57,314
7,959
203,451
£000
50,107
1,330
1,923
8,102
371
£000
53,360
8,473
172,355
Authorised for issue and approved by the Board on 29 November 2022. The notes on pages 136 to 175 form
part of these financial statements.
121,736
172,355
Ian R Simm
Chief Executive
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Consolidated Statement of
Changes in Equity
132
Impax Asset Management Group plc
Annual Report and Accounts 2022
133
Consolidated Statement of Changes in Equity | For the year ended 30 September 2022
Share
capital
£000
Share
premium
£000
Merger
reserve
£000
Note
Exchange
translation
reserve
£000
Hedging
reserve
£000
Retained
earnings
£000
Total
Equity
£000
1,304
9,291
–
1,449
(111)
59,515
71,448
Share
capital
£000
Share
premium
£000
Merger
reserve
£000
Note
Exchange
translation
reserve
£000
Hedging
reserve
£000
Retained
earnings
£000
Total
Equity
£000
1,326
9,291
1,533
374
1 October 2020
Transactions with owners
of the Company:
New shares issued
Dividends paid
14
Cash received on option exercises
Purchase of Impax NH shares
Tax credit on long-term incentive
schemes
Share based payment charges
9
Total transactions with owners
of the Company
Profit for the year
Other comprehensive income:
Change in value of cash flow hedge
Tax on change in value of cash flow
hedges
Exchange differences on translation
of foreign operations
Total other comprehensive Income
22
–
–
–
–
–
–
–
–
–
–
–
1,533
–
–
–
–
–
22
9,291
1,533
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(1,075)
(1,075)
374
–
–
–
–
–
–
–
–
137
(26)
–
111
–
(20)
1,535
(13,616)
(13,616)
597
597
(2,239)
(2,239)
8,634
4,882
8,634
4,882
(1,762)
(207)
40,245
40,245
–
–
–
–
137
(26)
(1,075)
(964)
97,998
110,522
30 September 2021
1,326
9,291
1,533
30 September 2021
Transactions with owners
of the Company:
Dividends paid
14
Cash received on option exercises
Tax charge on long-term incentive
schemes
Share based payment charges
9
Acquisition of own shares
Total transactions with owners
of the Company
Profit for the year
Other comprehensive income:
Exchange differences on translation
of foreign operations
Total other comprehensive Income
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2,685
2,685
3,059
–
–
–
–
–
–
–
–
–
–
–
97,998
110,522
(28,665)
(28,665)
540
540
(3,756)
(3,756)
6,151
6,151
(8,781)
(8,781)
(34,511)
(34,511)
59,482
59,482
–
–
2,685
2,685
122,969
138,178
30 September 2022
1,326
9,291
1,533
The notes on pages 136 to 175 form part of these financial statements.
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Consolidated Cash Flow Statement
134
Impax Asset Management Group plc
Annual Report and Accounts 2022
135
Consolidated Cash Flow Statement | For the year ended 30 September 2022
Operating activities
Cash generated from operations
Corporation tax paid
Net cash generated from operating activities
Investing activities
Net acquisition of property plant & equipment and intangible assets
Net redemptions/(investments) from unconsolidated Impax funds
Income from settlement of investment related hedges
Note
27
Purchase of Impax NH shares
Investment income received
Increase in cash held in money market funds
Net cash used by investing activities
Financing activities
Acquisition of non-controlling interest
Interest paid on bank borrowings
Payment of lease liabilities
Acquisition of own shares
Cash received on exercise of Impax staff share options
Dividends paid
Net cash used by financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effect of foreign exchange rate changes
Cash and cash equivalents at end of year
(28,665)
(38,958)
(13,616)
(15,030)
13,440
16,935
36,172
2,620
52,232
20,245
(1,008)
36,172
21
2022
£000
2021
£000
Movements on cash reserves are shown in the table below:
Cash and cash equivalents
Cash invested in money market funds
Cash in RPAs
Total Group cash reserves
At the
beginning
of the year
£000
36,172
38,066
(4,089)
70,149
Cashflow
£000
13,440
19,091
138
32,669
Foreign
exchange
£000
At the end
of the year
£000
2,620
1,530
–
52,232
58,687
(3,951)
4,150
106,968
80,321
(9,046)
71,275
(796)
355
69
–
586
(19,091)
(18,877)
(182)
(141)
(1,729)
(8,781)
540
59,812
(4,445)
55,367
(257)
(2,529)
(455)
(704)
93
(19,550)
(23,402)
(191)
(129)
(1,691)
–
597
Cash and cash equivalents under IFRS does not include cash held in money market funds. The Group
however considers its total cash reserves to include these amounts. Cash held in RPA accounts are not
included in cash reserves (see note 21). There are no significant changes to liabilities arising from financing
activities.
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Notes to the Financial Statements
136
Impax Asset Management Group plc
Annual Report and Accounts 2022
137
Notes to the Financial Statements | For the year ended 30 September 2022
1 REPORTING ENTITY
Impax Asset Management Group plc (the “Company”) is incorporated and domiciled in the UK and is listed
on the Alternative Investment Market (“AIM”). These consolidated financial statements comprise the
Company and its subsidiaries (together referred to as the “Group”). The Company’s separate financial
statements are shown on pages 176 to 190.
2 BASIS OF PREPARATION
These Group and Parent Company financial statements have been prepared in accordance with UK-adopted
international accounting standards.
The financial statements have been prepared under the historical cost convention, with the exception of the
revaluation of certain investments and derivatives being measured at fair value.
Details of the significant accounting policies adopted by the Group are shown in note 31.
The financial statements are presented in sterling. All amounts have been rounded to the nearest thousand
unless otherwise indicated.
Going concern
The financial statements have been prepared on a going concern basis which the Directors consider to be
appropriate for the following reasons. Cash flow forecasts covering a period of 12 months from the date of
approval of these financial statements indicate that, taking account of reasonably possible downside
assumptions in relation to asset inflows, market performance and costs, the Group will have sufficient funds
to meet its liabilities as they fall due and regulatory capital requirements for that period. The Group has
sufficient cash balances and no debt and, at the Period-end market levels, is profitable. A significant part of
the Group’s cost basis is variable as bonuses are linked to profitability. The Group can also preserve cash
through dividend reduction and through issuance of shares to cover share option exercises/restricted share
awards (rather than purchasing shares). Consequently, the Directors are confident that the Group will have
sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of
approval of the financial statements and therefore have prepared the financial statements on a going
concern basis.
3 USE OF JUDGEMENTS AND ESTIMATES
In preparing these financial statements management has made estimates that affect the reported amounts
of assets, liabilities, income and expenses. Actual results may differ from estimates. Revisions to estimates
are recognised prospectively.
The Group has not identified any significant judgements and estimates at the end of the reporting period.
However the key areas that include judgement and/or estimates are set out in notes 15 and 16.
4 ADJUSTED PROFITS AND EARNINGS
The reported operating earnings, profit before tax and earnings per share are substantially affected by
business combination affects and other items. The Directors have therefore decided to report an Adjusted
operating profit, Adjusted profit before tax and Adjusted earnings per share which exclude these items in
order to enable comparison with peers and provide consistent measures of performance over time.
A reconciliation of the adjusted amounts to the IFRS reported amounts is shown below.
Revenue
Operating Costs
Amortisation of intangibles arising on acquisition
Acquisition equity incentive scheme charges
Mark to market credit on equity awards*
Operating Profit
Finance income
Finance costs
Profit before taxation
Taxation
Credit re historical tax charges
Tax charge on adjustments
Profit after taxation
Diluted earnings per share
Year ended 30 September 2022
Adjustments
Business
combination
effects
£000
Other
£000
2,420
1,340
3,760
(1,527)
(1,527)
(6,440)
3,760
(7,967)
Reported
– IFRS
£000
175,396
(110,213)
65,183
7,950
(574)
72,559
(13,077)
59,482
44.7
3,760
2.8
(730)
1,514
(7,183)
(5.4)
Adjusted
£000
175,396
(107,980)
67,416
1,510
(574)
68,352
(12,293)
56,059
42.1
* The credit is offset by £3,756,000 of tax charges shown in the Statement of Changes in Equity.
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138
Impax Asset Management Group plc
Annual Report and Accounts 2022
139
4 ADJUSTED PROFITS AND EARNINGS CONTINUED
Revenue
Operating costs
Amortisation of intangibles arising on acquisition
Acquisition equity incentive scheme charges
Contingent consideration adjustment
Mark to market charge on equity awards*
Operating Profit
Finance income
Finance costs
Profit before taxation
Taxation
Credit re historical tax charges
Tax credit on adjustments
Profit after taxation
Diluted earnings per share
Year ended 30 September 2021
Adjustments
Business
combination
effects
£000
Other
£000
2,358
1,649
167
4,174
4,176
4,176
(89)
906
4,174
4,993
Reported
– IFRS
£000
143,056
(95,622)
47,434
286
(1,971)
45,749
(5,504)
40,245
30.3
4,174
3.2
(2,803)
(948)
1,242
0.9
Adjusted
(restated)**
£000
143,056
(87,272)
55,784
197
(1,065)
54,916
(9,255)
45,661
34.4
* The charge is offset by £8,634,000 of tax credits shown in the statement of changes in equity.
** Adjusted profit before tax has been restated to add back unrealised foreign exchange losses of £906,000.
The diluted number of shares is the same as used for the IFRS calculation of earnings per share (see note 13).
Amortisation of intangibles
Management contracts, which are classified as intangible assets, were acquired as part of the acquisition
of Impax NH and are amortised over their 11 year life. This charge is not linked to the operating performance
of the Impax NH business so is excluded from adjusted profit.
Acquisition equity incentive scheme charges
Impax NH staff have been awarded share based payments in respect of the transaction. Charges in respect
of these relate to the acquisition rather than the operating performance of the Group and are therefore
excluded from adjusted profit.
Mark to market charge on equity incentive awards
The Group has in prior years and the current period awarded employees options over the Group's shares,
some of which are either unvested or unexercised at the balance sheet date. The Group has also made
awards of restricted shares (“RSS awards”) which have not vested at the balance sheet date. Employers
National Insurance Contributions (“NIC”) are payable on the option awards when they are exercised and
on the RSS awards when they vest, based on the valuation of the underlying shares at that point. The Group
does however receive a corporation tax credit equal to the value of the awards at the date they are exercised
(options) or vest (RSS awards). An accrual for the NIC is recognised based on the share price at the balance
sheet date and changes in the accrual are recognised as a charge or credit within IFRS operating profit.
Similarly, the corporation tax credit is accrued within equity based on the share price at the balance sheet
date with changes in the credit recognised as a credit or charge to equity.
The charge to profit varies based on the Group's share price and is not linked to the operating performance
of the Group. It is therefore eliminated when reporting adjusted profit.
Finance income and expense
Finance income for the Period has been adjusted for foreign exchange gains on intercompany loans and
other unrealised foreign exchange gains and losses that are not linked to the performance of the Group. Prior
year adjusted profit before tax has been restated to remove unrealised foreign exchange losses of £906,000
to aid comparability with the current Period.
Taxation
The IFRS tax charge in both the current and prior period included a credit in respect of the reversal of
historical tax charges related to private equity income. This does not reflect the performance of the
Group and is therefore excluded from adjusted profit.
Contingent consideration adjustment
Until the time it was settled, the Group was required to review and adjust its estimate of the contingent
consideration payable in respect of the Impax NH acquisition. Adjustments were recorded through income
but excluded from adjusted profit. These adjustments are not linked to the operating performance of the
Impax NH business and are therefore eliminated from operating costs.
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Notes to the Financial Statements continued
140
Impax Asset Management Group plc
Annual Report and Accounts 2022
141
5 SEGMENTAL REPORTING
(a) Operating segments
The Group is managed on an integrated basis and there are no reportable segments.
Segment information is presented on the same basis as that provided for internal reporting purposes
to the Group's chief operating decision maker, the Chief Executive.
(b) Geographical analysis
An analysis of revenue by the location of client is presented below:
UK
North America
France
Luxembourg
Ireland
Netherlands
Australia
Other
Revenue
2022
£000
34,069
61,890
12,261
43,362
13,175
3,012
2,796
4,831
2021
£000
26,733
50,608
12,680
35,448
9,412
3,359
1,523
3,293
6 REVENUE
See accounting policy at note 31(D)
The Group's main source of revenue is investment management and advisory fees. The Group may also earn
carried interest from its Private Equity funds. Management and advisory fees are generally based on an
agreed percentage of the valuation of assets under management (“AUM”) for Listed Equity and Fixed Income
funds. For Private Equity funds they are generally based on an agreed percentage of commitments made to
the fund by investors during the fund's investment period and thereafter on the cost price of investments
made and not exited. Carried interest is earned from Private Equity funds if the cash returned to investors
exceeds an agreed return.
The Group determines the investment management and advisory fees to be a single revenue stream as they
are all determined through a consistent performance obligation. Should AUM reduce as result of equity
market downturns or allocation of capital away from equity markets then the revenue would reduce.
None of the Group's funds individually represented more than 10% of Group revenue in the current or prior year.
Revenue includes £170,840,243 (2021: £140,236,441) from related parties.
7 OPERATING COSTS
The Group’s largest operating cost is staff costs. Other significant costs include direct fund costs, IT and
communication costs, premises costs (depreciation on office building leases, rates and service charge),
amortisation of intangible assets, mark to market charges on share awards and professional fees.
The Group’s non-current assets (property plant and equipment, goodwill and intangible assets) are located
in the countries listed below:
175,396
143,056
See accounting policy at note 31(E) for leases and note 31(F) for placement fees.
UK
United States
Hong Kong
Ireland
Non-current assets
2022
£000
6,427
34,907
140
77
2021
£000
6,952
31,594
7
171
41,551
38,724
Staff costs (note 8)
Direct fund expenses
IT and communications
Depreciation and amortisation
Professional fees
Placing agent fees
Premises costs
Research costs
Mark to market (credit)/charge on share awards
Other costs
Sub-total
Contingent Consideration
Total
2022
£000
81,766
6,388
5,805
4,257
4,006
1,783
1,333
980
(1,527)
5,422
110,213
–
110,213
2021
£000
66,215
5,542
4,457
4,057
3,321
1,774
1,015
780
4,176
4,118
95,455
167
95,622
Operating costs include £1,183,000 (2021: £898,000) in respect of placing agent fees paid to related parties.
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142
Impax Asset Management Group plc
Annual Report and Accounts 2022
143
7 OPERATING COSTS CONTINUED
Other costs include £295,000 (2021: £291,000) paid to the Group's auditors which is analysed below:
Audit of the Group's Parent Company and consolidated financial statements
Audit of subsidiary undertakings
Audit-related assurance services
2022
£000
2021
£000
91
124
80
295
75
130
86
291
8 STAFF COSTS AND EMPLOYEES
Staff costs include salaries, a variable bonus, social security cost (principally UK NIC on salary, bonus and
share awards), the cost of contributions made to employees’ pension schemes and share-based payment
charges. Further details of the Group’s remuneration policies are provided in the Remuneration Committee
Report. Share-based payment charges are offset against the total cash bonus pool paid to employees. NIC
charges on share-based payments are accrued based on the share price at the balance sheet date and the
proportion vested.
Salaries and variable bonuses
Social security costs
Pensions
Share-based payment charge (see note 9)
Other staff costs
2022
£000
62,393
6,356
1,635
6,152
5,230
81,766
2021
£000
51,510
5,181
1,069
4,882
3,573
66,215
See accounting policy for pensions in note 31(G)
The Group contributes to private pension schemes. The assets of the schemes are held separately from those
of the Group in independently administered funds. The pension cost represents contributions payable by the
Group to these funds. Contributions totalling £105,000 (2021: £82,000) were payable to the funds at the year
end and are included in trade and other payables.
Other staff costs include the cost of providing health and other insurances for staff, Non-Executive Directors'
fees, contractor fees, recruitment fees and termination costs.
Directors and key management personnel
Details related to emoluments paid to Directors and Directors’ rights to share awards are included in the
Remuneration Committee Report under the “Directors’ remuneration during the year” heading on page 114
and in the Directors’ Report under the “Directors and their interests in shares” heading on page 102.
Key management personnel are related parties and are defined as members of the Board and/or the
Executive Committee. The remuneration of key management personnel, including pension contributions,
during the year was £14,525,298 with £2,239,493 of share-based payments (2021: £14,080,503 plus £1,024,156
of share-based payments). No Board members received pension contributions during the year (2021: nil).
Employees
The average number of persons (excluding Non-Executive Directors and including temporary staff),
employed during the year was 240 (2021: 195).
Portfolio Management
Private Equity
Client Service and Business Development
Group
2022
No.
86
13
82
59
240
2021
No.
69
12
63
51
195
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Notes to the Financial Statements continued
144
Impax Asset Management Group plc
Annual Report and Accounts 2022
145
9 SHARE-BASED PAYMENT CHARGES
See accounting policy at note 31(H)
The total expense recognised for the year arising from share-based payment transactions was £6,151,000
(2021: £4,882,000). The charges arose in respect of the Group’s Restricted Share Scheme (“RSS”) and the
Group’s Employee Share Option Plans which are described below. Share based payment charges also arose
in the prior year in respect of the Put and Call arrangement made with Impax NH management to acquire
their shares in Impax NH. Details of all outstanding options are provided at the end of this note. The charges
for each scheme are:
RSS
LTOP
Put and Call
2022
£000
5,231
920
–
6,151
2021
£000
3,636
1,003
243
4,882
Restricted Share Scheme
Restricted shares are awarded to some employees as part of their year end remuneration. These awards are
made post year end but part of the charge is recorded in the Period based on an estimated value at the year
end date. 413,750 restricted shares were granted during the Period under the 2021 plan. Awards may also be
made to new employees and during the Period, 397,889 RSS awards were granted to employees joining
under the 2022 plan ("RSS 2022A"). Post year end, the Board approved the grant of a further 763,000
restricted shares under the 2022 plan ("RSS 2022 Final"). Following grant, the shares are held by a nominee
for employees, who are then immediately entitled to receive dividends. After a period of three years’
continuous employment, the employees will receive unfettered access to one third of the shares, after four
years a further third and after five years the final third. The employees are not required to make any payment
for the shares on grant or when the restrictions lapse other than personal taxes.
In the prior period, 912,084 restricted shares were also granted to employees of Impax NH following the
acquisition of the remaining shares held by management in that business ("2021 RSS NH"). These have the
same conditions as described above except that unfettered access is gained to all of the shares after a period
of 3 years.
Full details of the awards granted during the year along with their valuation and the inputs used in the
valuation are described in the tables below. The valuation was determined using the Black-Scholes-Merton
model with an adjustment to reflect that dividends are received during the vesting period.
Awards originally granted
Weighted average award value
Weighted average share price on grant
Weighted average expected volatility
2022 RSS
Final
(estimated)
2022
2022
RSS A
2021
2021
RSS
2020
RSS
2021
RSS NH
763,000
397,889
413,750
356,500
912,084
£7.45
£7.58
35.0%
£7.32
£7.32
34.6%
£13.82
£13.94
34.0%
£7.10
£7.26
32.4%
£4.78
£5.02
32.4%
Weighted average award life on grant
5.2 years
2.6 years
5.2 years
5.3 years
3.2 years
Weighted average expected dividend yield
Weighted average risk free interest rate
3.9%
4.3%
3.0%
1.6%
1.5%
1.0%
1.2%
0.0%
1.2%
0.0%
The expected volatility was determined by reviewing the historical volatility of the Company and that of
comparator companies. The expected dividend rate is determined using the Company share price and most
recent full year dividend to grant date.
The fair value of the 2022 RSS Final awards has initially been estimated using the average share price over
the period of five days preceding the final Remuneration Committee and other inputs as at this date.
Restricted shares outstanding
Outstanding at 1 October 2021
Granted during the year
Vested during the year
Forfeited during the year
Outstanding at 30 September 2022
3,322,833
811,639
(1,616,286)
(24,180)
2,494,006
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146
Impax Asset Management Group plc
Annual Report and Accounts 2022
147
9 SHARE-BASED PAYMENT CHARGES CONTINUED
Employee share option plans
Options are awarded to some employees as part of their year end remuneration.
Options granted in 2017
Awards were granted to employees under the Company’s Employee Share Option Plan (“ESOP”). The strike
price of these options was set at a 10% premium to the average market price of the Company's shares for
the five business days following the announcement of the results for the preceding financial year. The 2017
options did not have performance conditions but did have a time vesting condition such that they vested
subject to continued employment on 31 December 2020.
The valuation was determined using the Black-Scholes-Merton model.
Options granted between 2018 and 2021
Awards have been granted to employees under the Company’s Long Term Option Plan (“LTOP”). The strike
prices of these options were £1 (2018 and 2019), £3 (2020) and £9 (2021). These options do not have
performance conditions but do have a time vesting condition such that the options vest subject to
continued employment on five years following grant. Vested shares are restricted from being sold until
after a further five year period (other than to settle any resulting tax liability).
Post year end the Board approved the grant of 60,000 options under the 2022 plan with a £7.50 strike price
and with the other conditions the same as the 2018–2021 plans.
The valuation was determined using the binomial model. Full details of the awards granted during the year
along with their valuation and the inputs used in the valuation are described in the table below.
Share options are equity settled.
Awards originally granted
Exercise price
Weighted average award value
Weighted average share price on grant
Weighted average expected volatility
Weighted average award life on grant
Weighted average expected dividend yield
Weighted average risk free interest rate
2022 LTOP
(estimated)
2022
2021 LTOP
2021
2020 LTOP
60,000
339,575
610,000
£7.50
£1.87
£7.58
35.0%
6 years
3.9%
4.3%
£9.00
£4.87
£13.90
34.2%
6 years
1.5%
0.8%
£3.00
£3.47
£7.26
32.4%
6 years
1.2%
0.0%
The expected volatility was determined by reviewing the historical volatility of the Company and that of
comparator companies. The expected dividend rate is determined using the Company share price and most
recent full year dividend to grant date.
The fair value of the 2022 LTOP awards has initially been estimated as at the time of preparing the accounts.
Options outstanding
An analysis of the outstanding options arising from the Company's option plans is provided below:
Options outstanding at 1 October 2021
Options granted
Options exercised
Options outstanding at 30 September 2022
Options exercisable at 30 September 2022
Number
2,660,000
339,575
(300,000)
2,699,575
700,000
The weighted average remaining contractual life, including the exercise period, was 6.0 years.
10 FINANCE INCOME
Fair value gains
Interest income
Other investment income
Foreign exchange gains
2022
£000
148
520
33
7,249
7,950
Weighted
average
exercise price
p
176.0
900.0
180.2
266.6
180.2
2021
£000
161
36
89
–
286
Fair value gains represent those arising on the revaluation of listed and unlisted investments held by the
Group (see note 19) and any gains or losses arising on related hedge instruments held by the Group.
The fair value gain comprises realised gains of £102,000 and unrealised losses of £46,000 (2021: £487,000
of realised losses and £648,000 of unrealised gains). Foreign exchange gains mainly arise on the retranslation
of cash and intercompany loans held in USD.
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Notes to the Financial Statements continued
148
Impax Asset Management Group plc
Annual Report and Accounts 2022
149
11 FINANCE EXPENSE
See accounting policy at note 31(J)
Interest on lease liabilities
Finance costs on bank loans
Foreign exchange losses
2022
£000
433
141
–
574
2021
£000
468
85
1,418
1,971
Commitment fees are payable on the revolving credit facility which the Group retains (see note 23). Foreign
exchange losses in the prior year mainly arose on the retranslation of intercompany loans.
12 TAXATION
See accounting policy at note 31(K)
The Group is subject to taxation in the countries in which it operates (the UK, the US, Hong Kong and Ireland)
at the rates applicable in those countries. The total tax charge includes taxes payable for the reporting period
(current tax) and also charges relating to taxes that will be payable in future years due to income or expenses
being recognised in different periods for tax and accounting periods (deferred tax).
A tax credit of £713,000 was recorded in 2021 in respect of prior year tax losses that previously had not been
recognised.
The current tax adjustment in respect of prior years in the Period arises as a result of tax that was expected
to be payable on private equity income as well as the finalisation of intra-group recharges.
The deferred tax adjustment in respect of prior years in the Period arises from the finalisation of intra-group
recharges.
The deferred tax adjustment in respect of prior years in the prior period mainly reflects reductions in the tax
expected to be payable on private equity income, recorded in prior years, as a result of transactions which
took place in the year.
An increase in the main rate of UK corporation tax from 19% to 25% with effect from 1 April 2023 was enacted
in the Finance Act 2021. This rate increase has been taken into account in the calculation of the Group’s UK
deferred tax assets and liabilities as at 30 September 2022, to the extent that they are expected to reverse
after the rate increase comes into effect.
(b) Factors affecting the tax charge for the year
The UK tax rate for the year is 19%. The tax assessment for the period is lower than this rate (2021: lower).
The differences are explained below:
(a) Analysis of charge for the year
Current tax expense:
UK corporation tax
Foreign taxes
Adjustment in respect of prior years
Total current tax
Deferred tax expense/(credit):
Charge for the year
Adjustment in respect of prior years
Total deferred tax
Total income tax expense
2022
£000
2021
£000
13,400
472
(1,606)
12,266
133
678
811
5,960
235
73
6,268
2,104
(2,868)
(764)
13,077
5,504
Profit before tax
Tax charge at 19% (2021: 19%)
Effects of:
Non-taxable income
Non-deductible expenses and charges
Adjustment in respect of historical tax charges
Effect of higher tax rates in foreign jurisdictions
Tax losses not recognised
Recognition of prior year tax losses
Total income tax expense
Net tax charges of £3,756,000 (deferred tax charges of £6,739,000 net of current tax credits of £2,983,000)
are also recorded in equity in respect of tax deductions on share awards arising due to the share price
decrease (2021: credits of £8,634,000). Tax credits of £26,000 on cash flow hedges were reclassified from
equity to the income statement in 2021 on maturity of the hedges.
2022
£000
72,559
13,786
(506)
617
(928)
31
77
–
13,077
2021
£000
45,749
8,692
(18)
316
(2,795)
22
–
(713)
5,504
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Notes to the Financial Statements continued
150
Impax Asset Management Group plc
Annual Report and Accounts 2022
151
12 TAXATION CONTINUED
(c) Deferred tax
The deferred tax asset/(liability) included in the Consolidated Statement of Financial Position is as follows:
Share-based
payment
scheme
£000
5,202
8,634
–
(3,243)
10,593
(7,848)
Other assets
£000
Total assets
£000
291
(26)
–
1,038
1,303
1,109
5,493
8,608
(1)
(2,205)
11,895
(6,739)
311
127
438
267
3,323
(1,081)
1,458
(813)
4,781
Income not
yet taxable
£000
Other
liabilities
£000
Total
liabilities
£000
(3,130)
(210)
(3,340)
–
–
2,969
(161)
–
–
161
–
–
–
–
(210)
–
–
(159)
(369)
–
–
2,969
(371)
–
–
2
(369)
As at 1 October 2020
Credit to equity
Exchange differences on
consolidation
Credit/(charge) to the
income statement
As at 30 September 2021
Credit/(charge) to equity
Exchange differences on
consolidation
Credit/(charge) to the
income statement
As at 30 September 2022
Other assets include carried forward losses of £611,000 as at 30 September 2022 (2021: £681,000). The tax
credit on other assets recognised directly in equity of £1,109,000 relates to the increase in carried forward tax
losses arising from share-based payment schemes that vested during the period.
13 EARNINGS PER SHARE
Basic earnings per share (“EPS”) is calculated by dividing the profit for the year attributable to ordinary
equity holders of the Parent Company (the “Earnings”) by the weighted average number of ordinary shares
outstanding during the year, less the weighted average number of Own Shares held. Own Shares are held in
Employee Benefit Trusts (“EBTs”).
Diluted EPS includes an adjustment to reflect the dilutive impact of share awards.
2022
Basic
Diluted
2021
Basic
Diluted
Earnings for
the year
£000
Shares
000’s
Earnings
per share
59,482
129,409
46.0p
59,482
133,168
44.7p
40,245
127,644
31.5p
40,245
132,669
30.3p
The weighted average number of shares is calculated as shown in the table below:
Weighted average issued share capital
Less Own Shares held not allocated to vested ESOP options
Weighted average number of ordinary shares used in the calculation of basic EPS
Additional dilutive shares regarding share schemes
Adjustment to reflect option exercise proceeds and future service
from employees receiving share awards
Weighted average number of ordinary shares used in the calculation of diluted EPS
2022
£000
132,597
(3,188)
129,409
4,860
(1,101)
133,168
2021
£000
131,772
(4,128)
127,644
5,983
(958)
132,669
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152
Impax Asset Management Group plc
Annual Report and Accounts 2022
153
14 DIVIDENDS
Dividends are recognised as a reduction in equity in the period in which they are paid or in the case of final
dividends when they are approved by shareholders. The reduction in equity in the year therefore comprises
the prior year final dividend and the current year interim dividend.
Dividends declared/proposed in respect of the year
15 GOODWILL
See accounting policy at note 31(L)
The goodwill balance within the Group at 30 September 2022 arose from the acquisition of Impax Capital
Limited on 18 June 2001 and the acquisition of Impax NH in January 2018.
Interim dividend declared per share
Final dividend proposed per share
Total
2022
pence
4.7
22.9
27.6
2021
pence
3.6
17.0
20.6
The proposed final dividend of 22.9p will be submitted for formal approval at the Annual General Meeting to
be held on 16 March 2023. Based on the number of shares in issue at the date of this report, and excluding
own shares held, the total amount payable for the final dividend would be £30,188,130.
Cost
At 1 October 2020
Foreign exchange
At 1 October 2021
Foreign exchange
At 30 September 2022
Goodwill
£000
12,306
(490)
11,816
2,116
13,932
Dividends paid in the year
Prior year final dividend – 17.0p, 6.8p
Interim dividend – 4.7p, 3.6p
2022
£000
22,475
6,190
28,665
2021
£000
8,871
4,745
13,616
Impax NH consists of only one cash-generating unit (“CGU”). Goodwill is allocated between CGUs at 30
September 2022 as follows – £12,303,000 to Impax NH and £1,629,000 to the Listed Equity and Private
Equity CGUs.
The Group has determined the recoverable amount of its CGUs at the Period-end by calculating their value
in use using a discounted cash flow model over a period of 10 years. The cash flow forecasts were derived
taking into account the budget for the year ended 30 September 2023, which was approved by the Directors
in September 2022. The discount rate was derived from the Group’s weighted average cost of capital and
takes into account the weighted average cost of capital of other market participants.
The goodwill on the Listed Equity and Private Equity CGUs arose over 15 years ago and the business has
grown significantly in size and profitability since that date. There is accordingly significant headroom before
an impairment is required. The main assumptions used to calculate the cash flows in the impairment test
for these CGUs were that assets under management would continue at current levels and margins would
continue at current levels, that fund performance for the Listed Equity business would be 5% per year (2021:
5%) and a discount rate of 12.5% (2021: 12.5%). There has been no impairment of goodwill related to these
segments to date and there would have to be significant asset outflows over a sustained period before
any impairment was required. If the discount rate increased by 3% there would no impairment and if
fund performance reduced to zero there would be no impairment (2021: 3% increase in discount rate,
no impairment).
The impairment test for the Impax NH CGU showed no impairment (2021: no impairment) was required and
used the following key assumptions, based on historical performance – average fund inflows of US$0.38
billion (2021: US$0.38 billion), fund performance of 5% (2021: 5%), an average operating margin of 17%
(2021: 17%) and a discount rate of 12.5% (2021: 12.5%). The following plausible changes in assumptions
would individually not give rise to an impairment: a consistent 10% decrease in inflows (2021: 10% decrease);
a 100 basis point annual reduction in performance each year (2021: 100 basis point reduction); a 1% annual
reduction in operating margin (2021: 1% reduction), a 1% increase in discount rate (2021: 1% increase).
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154
Impax Asset Management Group plc
Annual Report and Accounts 2022
155
16 INTANGIBLE ASSETS
See accounting policy at note 31(M)
17 PROPERTY, PLANT AND EQUIPMENT
See accounting policy at note 31(N)
Intangible assets mainly represents the value of the management contracts acquired as part of the
acquisition of Impax NH.
Property, plant and equipment mainly represents the costs of fitting out the Group’s leased London
(leasehold improvements), office furniture and computers (fixtures, fitting and equipment) and the
capitalised value of the Group’s leases on its office buildings (right of use assets).
Cost
As at 1 October 2020
Foreign exchange
As at 30 September 2021
Additions
Disposals
Foreign exchange
As at 30 September 2022
Accumulated amortisation
As at 1 October 2020
Charge for the year
Foreign exchange
As at 30 September 2021
Charge for the year
Disposals
Foreign exchange
As at 30 September 2022
Net book value
As at 30 September 2022
As at 30 September 2021
As at 30 September 2020
Management
contracts
£000
Software
£000
Total
£000
27,707
(1,266)
26,441
–
–
5,469
31,910
6,907
2,358
(277)
8,988
2,459
–
2,199
13,646
18,264
17,453
20,800
529
–
529
81
(309)
–
301
458
51
–
509
26
(310)
–
225
76
20
71
28,236
(1,266)
26,970
81
(309)
5,469
32,211
7,365
2,409
(277)
9,497
2,485
(310)
2,199
13,871
18,340
17,473
20,871
Cost
As at 1 October 2020
Additions
Disposals
Foreign exchange
As at 30 September 2021
Additions
Disposals
Foreign exchange
As at 30 September 2022
Accumulated depreciation
As at 1 October 2020
Charge for the year
Disposals
Foreign exchange
As at 30 September 2021
Charge for the year
Disposals
Foreign exchange
The management contracts were acquired with the acquisition of Impax NH in January 2018 and are
amortised over an 11 year life.
Asset inflows, operating margin and discounted cost of capital are all the same or in excess of the
assumptions when the management contracts were first valued. As such, there are no indicators of
impairment.
Net book value
As at 30 September 2022
At 30 September 2021
As at 30 September 2020
7,647
8,065
9,315
914
821
975
718
549
567
9,279
9,435
10,857
As at 30 September 2022
3,970
1,429
1,896
Right of use
assets
£000
Leasehold
improvements
£000
Fixtures,
fittings and
equipment
£000
10,555
2,093
194
–
(222)
10,527
139
-
951
0
(19)
–
2,074
274
(6)
1
1,847
257
–
(14)
2,090
441
(22)
105
Total
£000
14,495
451
(19)
(236)
14,691
854
(28)
1,057
11,617
2,343
2,614
16,574
1,240
1,236
–
(14)
2,462
1,273
-
235
1,118
145
(10)
–
1,253
181
(6)
1
1,280
267
–
(6)
1,541
318
(22)
59
3,638
1,648
(10)
(20)
5,256
1,772
(28)
295
7,295
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156
Impax Asset Management Group plc
Annual Report and Accounts 2022
157
17 PROPERTY, PLANT AND EQUIPMENT CONTINUED
Lease arrangements
Property, plant and equipment includes right-of-use assets in relation to operating leases for the Group’s
office buildings.
The carrying value of the Group’s right of use assets, associated lease liabilities and the movements during
the period are set out below.
Right of
use asset
Lease
liabilities
18 TRADE AND OTHER RECEIVABLES
See accounting policy at note 31(O)
Trade receivables
Other receivables
Prepayments and accrued income
2022
£000
10,196
1,205
27,368
38,769
2021
£000
8,679
1,717
29,404
39,800
At 1 October 2021
New leases
Lease payments
Interest expense
Depreciation charge
Foreign exchange movement
At 30 September 2022
£m
8,065
139
–
–
(1,273)
716
7,647
Current
Non current
The contractual maturities on the undiscounted minimum lease payments under lease liabilities are
provided below:
Within one year
Between 1 and 5 years
Later than 5 years
Total undiscounted lease liabilities
2022
£000
2,937
6,339
2,447
11,723
£m
9,432
139
(1,729)
433
–
803
9,078
1,488
7,590
9,078
2021
£000
1,694
6,452
3,110
11,256
The Company’s London office lease has an extension option of a further five years from June 2027, subject
to a rent review, which is not included in the above numbers on the basis that it is not yet reasonably certain
that it will be exercised.
Accrued income relates to accrued management fees and arises where invoices are raised in arrears.
An analysis of the aging of trade receivables is provided below:
0–30 days
Past due but not impaired:
31–60 days
61–90 days
Over 90 days
2022
£000
9,069
382
557
188
10,196
2021
£000
6,865
1,052
762
–
8,679
At the date of this report, substantially all of the trade receivables above have been received. As at
30 September 2022, the assessed provision under the IFRS 9 expected loss model for trade receivables
and prepayments and accrued income was immaterial (2021: immaterial).
£32,954,000 of trade and other receivables and accrued income were due from related parties
(2021: £34,685,000).
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158
Impax Asset Management Group plc
Annual Report and Accounts 2022
159
19 CURRENT ASSET INVESTMENTS
See accounting policy at note 31(P)
Market risk and investment hedges
See accounting policy for derivatives at note 31(Q)
The Group makes seed investments into its own Listed Equity funds and also invests in its Private Equity
funds. Where the funds are consolidated the underlying investments are shown in the table below.
Investments made in unconsolidated funds are also included. Further details of when funds are
consolidated are described in note 31(A).
Investments made are subject to market risk. Where appropriate the Group has attempted to hedge against
the risk of market falls by the use of derivative contracts. The derivative contracts consist of short positions
against a global equity index and are arranged through BNP Paribas, a related party. Any outstanding
amounts on the short positions are settled daily.
At 1 October 2020
Additions
Fair value movements
Repayments/disposals
At 30 September 2021
Additions
Fair value movements
Repayments/disposals
At 30 September 2022
Total
£000
4,387
2,832
648
(303)
7,564
256
46
(611)
7,255
The investments include £3,534,000 in related parties of the Group (2021: £3,474,000).
Hierarchical classification of investments
The hierarchical classification of the investments as considered by IFRS 13 Financial Instruments: Disclosures
is shown below:
At 1 October 2021
Additions
Fair value movements
Repayments/disposals
At 30 September 2022
Level 1
£000
4,090
–
(369)
–
3,721
Level 2
£000
–
–
–
–
–
Level 3
£000
3,474
256
415
(611)
Total
£000
7,564
256
46
(611)
3,534
7,255
There were no movements between any of the levels in the Period.
The level 3 investments are in the Group’s Private Equity funds. The net asset value of these funds as reported
in the NAV statements represents the fair value at the end of the reporting period and as such a range of
unobservable inputs is not reported. If the NAV of those funds changed by +/- 10% then the valuation of
those investments would change by +/- £353,000.
20 INTERESTS IN UNCONSOLIDATED STRUCTURED ENTITIES
See accounting policy at note 31(A) and note 31(X)
The Group’s interest in structured entities is reflected in the Group’s AUM. The Group is exposed to
movements in AUM of structured entities through potential loss of fee income as a result of client
withdrawals or market falls. Outflows from funds are dependent on market sentiment, asset
performance and investor considerations. Further information on these risks can be found in the
Strategic Report. Considering the potential for changes in AUM of structured entities, management
has determined that the Group’s unconsolidated structured entities include segregated mandates
and pooled funds vehicles. Disclosure of the Group’s exposure to unconsolidated structured entities
has been made on this basis.
At 30 September 2022, AUM managed within unconsolidated structured entities was £35.68 billion
(2021: £37.21 billion) and within consolidated structured entities was £nil (2021: £nil).
£175,396,000 (2021: £143,056,000) in revenue was earned from unconsolidated structured entities.
The total exposure to unconsolidated structured entities in the Statement of Financial Position is shown
in the table below:
Management fees receivable (including accrued income)
Investments
2022
£000
35,069
3,534
38,603
2021
£000
36,356
3,474
39,830
The main risk the Group faces from its interest in unconsolidated structured entities are decreases in the
value of seed capital investments. Details on this are provided in note 28.
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Impax Asset Management Group plc
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161
21 CASH AND CASH EQUIVALENTS AND CASH INVESTED IN MONEY MARKET FUNDS
See accounting policy for cash at note 31(R)
Cash and cash equivalents under IFRS does not include cash invested in money market funds which is
exposed to market variability. However the Group considers its total cash reserves to include these amounts.
Cash held by consolidated funds is not considered to be available to the Group so it is not included in cash
reserves. Cash held in Research Payment Accounts (“RPAs”) is collected from funds managed by the Group
and can only be used towards the cost of researching stocks. A liability of an equal amount is included in
trade and other payables. This cash is also excluded from cash reserves. A reconciliation is shown below:
22 TRADE AND OTHER PAYABLES
See accounting policy at note 31(S)
Trade payables
Taxation and other social security
Other payables
Accruals
2022
£000
1,078
1,981
4,738
45,827
53,624
2021
£000
852
5,160
4,655
39,440
50,107
Cash and cash equivalents
Cash invested in money market funds
Less: cash held in RPAs
Cash reserves
2022
£000
52,232
58,687
(3,951)
106,968
2021
£000
36,172
38,066
(4,089)
70,149
The Group is exposed to interest rate risk on the above balances as interest income fluctuates according to
the prevailing interest rates. The average interest rate on the cash balances during the year was 0.6% (2021:
0.05%). Given current interest rate levels a sensitivity rate of 1% is considered appropriate. A 1% increase in
interest rates would have increased Group profit after tax by £885,000. An equal change in the opposite
direction would have decreased profit after tax by £501,000.
The credit risk regarding cash balances of the operating entities of the Group is spread by holding parts of
the balance with RBS International, Lloyds Bank, Citizens Financial Group (all with Standard & Poor’s credit
rating A-2), Santander (A-1) and the Bank of New Hampshire (unrated) and the remainder in money market
funds managed by BlackRock (with a Standard & Poor’s credit rating of AAA) and Goldman Sachs (with a
Standard & Poor’s credit rating of A-1).
Cash invested in money market funds is classified as Level 1 on the fair value hierarchy.
The most significant accrual at the year end relates to variable staff remuneration.
23 LOANS
See accounting policy at note 31(T)
The Group retains a US$13 million revolving credit facility (“RCF”) with RBS International which expires
in January 2023. No amounts were drawn down or repaid in the current Period or in the prior year.
24 ORDINARY SHARES
See accounting policy at note 31(U)
Issued and fully paid
At 1 October and 30 September
2022
No of
shares/000s
2021
No of
shares/000s
132,597
132,597
2022
£000
1,326
2021
£000
1,326
Ordinary shares have a par value of £0.01 per share. Each ordinary share carries the right to attend and vote
at general meetings of the Company. Holders of these shares are entitled to dividends as declared from time
to time. On 16 February 2021, 2,000,000 new shares were issued to the Impax Asset Management Group plc
Employee Benefit Trust 2012 (the “EBT”) and a further 181,467 shares were issued to management of Impax
NH as part of the consideration for the acquisition of that business that occurred in 2018.
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163
25 OWN SHARES
See accounting policy at note 31(V)
At 1 October 2020
Issuance of shares to EBT 2012
Satisfaction of option exercises and RSS vesting
At 30 September 2021
Purchase of shares by EBT 2012
Satisfaction of option exercises and RSS vesting
At 30 September 2022
No of Shares
5,186,867
2,000,000
£000
7,210
–
(3,083,472)
(3,093)
4,103,395
1,078,000
(1,916,286)
3,265,109
4,117
8,781
(4,770)
8,128
The EBT holds shares for RSS awards until they vest or to satisfy share option exercises. Included within Own
Shares are 2,494,006 shares held in a nominee account in respect of the RSS as described in note 9. During
the Period, the EBT purchased 1,078,000 ordinary shares.
26 FINANCIAL COMMITMENTS
At 30 September 2022 the Group has outstanding commitments to invest up to the following amounts into
private equity funds that it manages:
• €57,499 into Impax New Energy Investors II LP (2021: €113,000); this amount could be called on in the period
to 22 March 2023;
• €1,276,000 into Impax New Energy Investors III LP (2021: €1,567,000); this amount could be called on in the
period to 31 December 2026; and
• €1,446,977 into Impax New Energy Investors IV LP (2021: €449,616); this amount is called on in the period to
31 October 2031.
27 RECONCILIATION OF PROFIT BEFORE TAX TO CASH GENERATED FROM OPERATIONS
This note should be read in conjunction with the consolidated cashflow statement. It provides a reconciliation
to show how profit before tax, which is based on accounting rules, translates to cashflows.
Profit before taxation
Adjustments for income statement non-cash charges/income:
Depreciation of property plant and equipment and amortisation of intangible assets
Finance income
Finance expense
Share-based payment charges
Adjustment for statement of financial position movements:
Decrease/(increase) in trade and other receivables
Increase in trade and other payables
Cash generated from operations
2022
£000
72,559
4,257
(7,950)
574
6,151
1,031
3,699
80,321
2021
£000
45,749
4,057
(286)
1,971
4,882
(19,021)
22,460
59,812
28 FINANCIAL RISK MANAGEMENT
Risk management is integral to the business of the Group. There are systems of controls in place to create an
acceptable balance between the potential cost should such a risk occur and the cost of managing those risks.
Management continually monitors the Group’s risk management process to ensure that an appropriate
balance between risk and control is achieved. This section provides details of the Group’s exposure to
financial risks and describes the methods used by management to control such risk.
Credit risk
Credit risk is the potential financial loss resulting from the failure of a counterparty to settle their financial and
contractual obligations to the Group, as and when they fall due. The Group’s maximum exposure to credit risk
is represented by the carrying value of its financial assets.
The Group’s primary exposure to credit risk relates to its cash and cash equivalents and cash in money
market funds and long-term deposits that are placed with regulated financial institutions (see note 21).
The Group is also exposed to credit risk on trade receivables, representing investment management fees due.
An analysis of the aging of these is provided in note 18.
The Group makes no provision for credit loss as all receivable counterparties are funds managed by the
Group. All funds have sufficient resources to satisfy their position.
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Impax Asset Management Group plc
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28 FINANCIAL RISK MANAGEMENT CONTINUED
Foreign exchange risk
Foreign exchange risk is the risk that the fair value of future cash flows of financial instruments will fluctuate
because of changes in foreign exchange rates. For the UK-based business, a significant amount of the
Group’s income is denominated in Euros and US dollars whilst the majority of expenses are in Sterling.
For the US-based business, all income and all expenditure is in US dollars. Assets in the US along with
the goodwill and intangible assets arising on its acquisition are denominated in US dollars.
The strategy for the UK-based business for the year ended 30 September 2022 has been to convert income
earned in currencies other than US dollars and Sterling back to Sterling and to use hedges where there is
sufficient predictability over inflows to allow for an effective and efficient hedge. During the year the Group
had forward rate foreign currency contracts to sell Euro and buy Sterling. These have been designated as
cash flow hedges against Euro income and were recognised in profit in January, April and July 2022. There
were no outstanding forward rate foreign currency contracts as at 30 September 2022.
The Group’s exposure to foreign exchange rate risk, including that arising from consolidated funds, at
30 September 2022 was:
Assets
Current asset investments
Trade and other receivables
Cash and cash equivalents
Liabilities
Trade and other payables
Net exposure
EUR/GBP
£000
USD/GBP
£000
Other/GBP
£000
3,534
14,397
2,495
20,426
3,721
5,823
29,862
39,406
530
530
2,873
2,873
19,896
36,533
–
3,359
3,005
6,364
1,190
1,190
5,174
The Group’s exposure to foreign exchange rate risk at 30 September 2021 was:
Assets
Current asset investments
Trade and other receivables
Cash and cash equivalents
Liabilities
Trade and other payables
Net exposure
EUR/GBP
£000
USD/GBP
£000
Other/GBP
£000
3,472
16,875
1,382
21,729
160
160
21,569
4,091
6,696
11,736
22,523
7,329
7,329
15,194
–
3,125
1,544
4,669
90
90
4,579
The following table demonstrates the estimated impact on Group post-tax profit and net assets caused by a
5 per cent variance in the exchange rate used to revalue significant foreign assets and liabilities, assuming all
other variables are held constant. Post-tax profit will either increase or (decrease) as shown.
Translation of significant foreign assets and liabilities
GBP strengthens against the USD, up 5%
GBP weakens against the USD, down 5%
GBP strengthens against the EUR, up 5%
GBP weakens against the EUR, down 5%
Post-tax profit
2022
£000
(1,480)
1,480
(806)
806
2021
£000
(612)
612
(868)
868
Liquidity risk and regulatory capital requirements
Liquidity risk is the risk that the Group does not have sufficient financial resources to meet its obligations
when they fall due or will have to do so at a cost. The Group monitors its liquidity risk using cash flow
forecasts taking into account the commitments made to its private equity funds (see note 26) and the cash
required to meet the Group’s investment plans and its regulatory capital requirements. At 30 September
2022, the Group had cash and cash equivalents and cash in money market funds and long-term deposit
accounts of £110,919,000. This is £57,295,000 in excess of trade and other payables. The Group in addition
had other current assets of £46,200,000.
On a consolidated group basis the Group has capital of £71 million, a surplus of £48 million against
our internally determined capital requirement of £23 million.
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28 FINANCIAL RISK MANAGEMENT CONTINUED
Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of financial instruments will fluctuate
because of changes in market interest rates. The Group is exposed to interest rate risk on its loans and
interest-bearing assets, specifically cash balances that earn interest at a floating rate.
Market risk
The significant holdings that are exposed to equity market price risk are the Group’s investments in its
managed funds. See note 19 for further information.
Fair values of financial assets and liabilities
The Directors consider there to be no difference between the carrying value of the Group’s financial assets
and liabilities and their fair value.
Financial instruments by category
The carrying value of the financial instruments of the Group is shown below:
30 September 2022
Goodwill and intangibles assets
Property, plant and equipment
Deferred tax assets
Trade and other receivables
Investments
Current tax asset
Cash invested in money market funds
Cash and cash equivalents
Trade and other payables
Lease liabilities
Deferred tax liabilities
Current tax liability
Total
Financial
assets
measured at
FVPTL
£000
Financial
assets /
liabilities at
amortised
cost
£000
Total financial
instruments
£000
Non-financial
instruments
£000
Total net
assets
£000
–
–
–
–
7,255
–
58,687
–
–
–
–
–
–
–
–
11,401
–
–
–
52,232
(5,816)
(9,078)
–
–
–
–
–
11,401
7,255
–
58,687
52,232
(5,816)
(9,078)
–
–
32,272
9,279
4,781
27,368
–
176
–
–
32,272
9,279
4,781
38,769
7,255
176
58,687
52,232
(47,808)
(53,624)
–
(369)
(2,202)
(9,078)
(369)
2,202
65,942
48,739
114,681
23,497
138,178
Financial
assets
measured at
FVPTL
£000
Financial
assets /
liabilities at
amortised
cost
£000
Total financial
instruments
£000
Non-financial
instrument
Total net
assets
£000
–
–
–
–
7,564
–
38,066
–
–
–
–
–
–
–
–
10,396
–
–
–
36,172
(5,507)
(9,432)
–
–
–
–
–
10,396
7,564
–
38,066
36,172
(5,507)
(9,432)
–
–
29,289
9,435
11,895
29,404
–
134
–
–
(44,600)
–
(371)
(1,923)
29,289
9,435
11,895
39,800
7,564
134
38,066
36,172
(50,107)
(9,432)
(371)
(1,923)
45,630
31,629
77,259
33,263
110,522
30 September 2021
Goodwill and intangibles assets
Property, plant and equipment
Deferred tax assets
Trade and other receivables
Investments
Current tax asset
Cash invested in money market funds
Cash and cash equivalents
Trade and other payables
Lease liabilities
Deferred tax liabilities
Current tax liability
Total financial assets
* FVTPL = Fair value through profit and loss.
29 RELATED PARTY TRANSACTIONS
Private equity funds managed by the Group, entities controlled by these funds and the Global Resource
Optimization Fund LP and Impax Global Opportunities Fund LP are related parties of the Group by virtue
of subsidiaries being the General Partners to these funds. The Group earns management fees from these
entities.
BNP Paribas Asset Management Holding is a related party of the Group by virtue of owning a 13.8% equity
holding as well as having a representative on the Board of Directors. The Group sub-manages certain funds
for BNP for which it earns fees.
Other funds managed by subsidiaries of the Group are also related parties by virtue of its management
contracts.
Fees earned from the above related parties have been disclosed in note 6 and amounts receivable are
disclosed in note 18. The Group also invests in certain funds that it manages which is disclosed in note 19.
A loan facility is provided to an executive for the sole purpose of investment in a fund managed by the Group.
The loan is provided at an interest rate of LIBOR plus 2% per annum on amounts drawn, calculated on a daily
basis. Interest of €3,062 was accrued on the loan during the year. The balance on the loan is €104,301 at the
reporting date (2021: €76,536).
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169
30 NEW ACCOUNTING STANDARDS
New standards, interpretations and amendments adopted during the year
There were no new standards adopted during the year.
New Standards and Interpretations not yet adopted
There were no Standards or Interpretations that were in issue and required to be adopted by the Group
as at the date of authorisation of these consolidated financial statements. No Standards or Interpretations
have been issued that are expected to have a material impact on the Group’s financial statements.
31 ACCOUNTING POLICIES
(A) Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and its
subsidiaries. All intra-Group transactions and balances are eliminated in full on consolidation.
Subsidiaries are those entities, including investment funds, over which the Group has control. The Group is
deemed to have control if it is exposed to, or has rights to, variable returns from involvement with the entity
and has the ability to affect those returns through its power over the entity.
The entities included in the consolidation may vary year on year due to restructuring of the Group (including
acquisition and disposals) and the level of investments made in investment funds (see below).
Subsidiaries are accounted for using the acquisition method of accounting whereby the Group’s results
include the results of the acquired business from the date of acquisition until the date of disposal.
The Company includes certain assets and liabilities of the EBT 2004 and EBT 2012 (together the “EBTs”)
within its statement of financial position. In the event of the winding up of the Company, neither the
shareholders nor the creditors would be entitled to the assets of the EBTs.
Investment funds and structured entities
The Group acts as a fund manager to investment funds that are considered to be structured entities under
IFRS. Structured entities are entities that have been designed so that voting or similar rights are not the
dominant factor in deciding which party has control: for example, when any voting rights relate to
administrative tasks only and the relevant activities of the entity are directed by means of contractual
arrangements. The Group has interests in structured entities as a result of the management of these
investment funds.
Where the Group holds a direct interest in an investment fund it manages, the interest is accounted for either
as a consolidated structured entity or as a financial asset, depending on whether the Group has control over
the fund or not. Control is determined in accordance with IFRS 10, based on an assessment of the level of
power and aggregate economic interest that the Group has over the fund, relative to third-party investors.
Power is normally conveyed to the Group through the existence of an investment management agreement
and/or other contractual arrangements. Aggregate economic interest is a measure of the Group’s exposure
to variable returns in the fund through a combination of direct interest, carried interest and expected
management fees (including performance fees).
The Group concludes that it acts as a principal when the power it has over the fund is deemed to be
exercised for self-benefit, considering the level of aggregate economic exposure in the fund and the assessed
strength of third-party investors’ kick-out rights. The Group concludes that it acts as an agent when the
power it has over the fund is deemed to be exercised for the benefit of third-party investors. The Group
concludes that it has control and, therefore, will consolidate a fund as if it were a subsidiary where the Group
acts as a principal. If the Group concludes that it does not have control over the fund, the Group accounts for
its interest in the fund as a financial asset.
In cases where investment funds are consolidated, the third-party interest is recorded as a financial liability.
The consolidation has no net effect on the income statement. The treatment continues until the Group loses
control as defined by IFRS.
Details of funds that are recorded as a financial asset are provided in note 20.
(B) Business combinations
The Group accounts for business combinations using the acquisition method when control is transferred to
the Group. The consideration transferred in the acquisition is measured at fair value, as are the identifiable
net assets acquired. Any goodwill that arises is tested annually for impairment (see note 15). Any gain on
a bargain purchase is recognised in profit or loss immediately. Transaction costs are expensed as incurred,
except if related to the issue of debt or equity securities.
The consideration transferred does not include amounts related to the settlement of pre-existing
relationships. Such amounts are generally recognised in profit or loss.
Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay
contingent consideration that meets the definition of a financial instrument is classified as equity, then it is
not remeasured and settlement is accounted for within equity. Otherwise, other contingent consideration is
remeasured at fair value at each reporting date and subsequent changes in the fair value of the contingent
consideration are recognised in profit or loss.
If share-based payment awards (replacement awards) are required to be exchanged for awards held by the
acquiree’s employees (acquiree’s awards), then all or a portion of the amount of the acquirer’s replacement
awards is included in measuring the consideration transferred in the business combination. This determination
is based on the market-based measure of the replacement awards compared with the market-based measure
of the acquiree’s awards and the extent to which the replacement awards relate to pre-combination service.
Non-controlling interests are measured initially at their proportionate share of the acquiree’s identifiable net
assets at the date of acquisition.
In instances where the non-controlling interests holds an option enabling it to require the Group to purchase
its interests the Group uses the present access method. A liability is recognised for the estimated cost of
acquiring the non-controlling interest and charged to equity. Subsequent changes in the value of the liability
are recognised through equity.
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31 ACCOUNTING POLICIES CONTINUED
(C) Foreign currency
(i) Functional and presentational currency
The financial information of each of the Group’s entities are initially recorded in the currency of the primary
economic environment in which the entity operates (the “functional currency”). This is mainly Sterling but for
some entities it is the Euro and the US dollar. The consolidated financial statements are presented in Sterling
which is both the Company’s functional and presentational currency as well as the currency in which the
majority of the Group’s revenue streams, assets and liabilities are recorded.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency at the rates ruling when they
occurred. Foreign currency monetary assets and liabilities are translated at the rates ruling at the statement
of financial position date. Foreign currency gains or losses resulting from the settlement of such transactions
and their translation at year end rates are recorded in the income statement.
(iii) Consolidation
On consolidation, the results and financial position of all Group entities that have a functional currency
different from Sterling (the “presentational currency”) are translated into Sterling as follows:
• assets and liabilities are translated at the closing rate at the date of the statement of financial position;
• income and expenses are translated at the date of the transaction or at average exchange rate for the year; and
• any resulting exchange differences are recognised as a separate component of the statement of
comprehensive income.
(D) Revenue
Management fee revenue is recognised as the service is provided and it is probable that the fee will be
received. Where fees are calculated and billed in arrears amounts are accrued and estimated based on the
statement of financial position date.
Revenue also includes transaction based fees. These fees are recorded as income as the service is provided
and the receipt of income is almost certain.
Performance fees arising upon the achievement of the specified targets are recognised when the fees are
confirmed as receivable.
(E) Leases
The Group’s lease arrangements primarily consist of operating leases relating to office space. The Group
initially records a lease liability in the Group’s Consolidated Statement of Financial Position reflecting the
present value of the future contractual cash flows to be made over the lease term, discounted using the
Group’s incremental borrowing rate. A right-of-use (ROU) asset is also recorded at the value of the lease
liability plus any directly related costs and estimated dilapidation expenses and is presented within property,
plant and equipment (see note 17). Interest is accrued on the lease liability using the effective interest rate
method to give a constant rate of return over the life of the lease whilst the balance is reduced as lease
payments are made. The ROU asset is depreciated over the life of the lease as the benefit of the lease is
consumed. The Group considers whether the lease term should include options to extend or cancel the lease.
Relevant factors that could create an economic incentive to exercise the option are considered and the
option is included if it is reasonably certain to be exercised. After the commencement date, the Group
reassesses the lease term if there is a significant event or change in circumstances that is within its control
and affects the likelihood that it will exercise (or not exercise) the option.
(F) Placement fees
Placement fees incurred that are directly attributable to securing an investment management contract are
deferred and amortised over the investment period of the related fund. Such charges are included in other
costs in note 7 – Operating costs.
(G) Pensions
Pension contributions made to defined contribution schemes by the Group are charged to the consolidated
income statement as they become payable.
(H) Share-based payments
The fair value of employee services received in exchange for the grant of restricted shares or share options
is recognised as an expense. The fair value of the shares and share options awarded is determined at the date
the employee is deemed to be fully aware of their potential entitlement and all conditions of vesting (termed
the “grant date”). The expense is charged over the period starting when the employee commenced the
relevant services (termed the “service commencement date”) to the vesting date. In instances where the
grant date occurs after the date of signing these financial statements the fair value is initially estimated at
the time of preparing the accounts.
Award holders of restricted share awards are entitled to receive non-forfeitable dividends over the vesting
period. These non-forfeitable dividends are included in the fair value and therefore the cost in relation to
these dividends is charged to the Consolidated Income Statement.
(I) Investment income
Interest income is accrued on a time basis by reference to the principal outstanding and the interest rate
applicable. Other investment income is recognised when the right to receive payment is established.
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172
Impax Asset Management Group plc
Annual Report and Accounts 2022
173
31 ACCOUNTING POLICIES CONTINUED
(J) Interest expense
Interest expense is recognised using the effective interest method.
(K) Taxation
Current tax is based on taxable profits for the year after all potential reliefs available have been utilised.
Taxable profits may differ from “profit before tax” as reported in the income statement due to timing
differences of when expenditure or income are included or due to disallowing certain expenditure or income.
The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively
enacted at the Statement of Financial Position date. In the United Kingdom tax deductions are available
in respect of the award of the Company’s shares. In instances where the tax deduction is greater than the
associated share-based payment charge due to differences in the Company’s share price that amount is
recognised in equity.
Deferred tax is provided in full in respect of taxation deferred by temporary differences between the
treatment of certain items for taxation and accounting purposes. Deferred tax assets are not recognised
to the extent that their recoverability is uncertain.
The carrying amounts of deferred tax assets are reviewed at each statement of financial position date and
regarded as recoverable and therefore recognised only when, on the basis of all available evidence, it can be
regarded as more likely than not that there will be suitable taxable profits from which the future reversal of
the underlying temporary differences can be deducted.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability or the
asset is realised.
Deferred tax assets and liabilities are offset only if certain criteria are met.
(L) Goodwill
Goodwill arising on consolidation represents the excess of the cost of acquisition over the fair value of the
identifiable assets, liabilities and contingent liabilities of a subsidiary, associate or jointly controlled entity at
the date of acquisition. Goodwill is recognised as an asset and is tested for impairment annually, or on such
occasions that events or changes in circumstances indicate that its value might be impaired.
Where the cost of acquisition includes contingent consideration this is initially estimated and discounted.
The unwinding of the discount is recorded through other financial expense in the income statement.
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit
or loss on disposal.
(M) Intangible assets
Intangible assets are stated at cost (fair value for assets acquired via a business combination) less
accumulated depreciation and any accumulated impairment losses.
Amortisation is provided on a straight-line basis over the estimated useful lives shown below:
Management contracts
Other items
11 years
three – five years.
(N) Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and any accumulated
impairment losses.
Depreciation is provided on a straight-line basis over the estimated useful lives shown below:
Leasehold improvements
Fixtures, fittings and equipment
life of the lease
three years.
(O) TRADE AND OTHER RECEIVABLES
Trade and other receivables, including accrued income, are initially recognised at fair value and subsequently
measured at amortised cost using the effective interest method less provision for estimated credit losses. The
Group has not had credit losses in the past, any estimated credit losses would take into account the nature of
any dispute and the financial resources of the client. Prepayments arise where the Group pays cash in
advance for services. As the service is provided, the prepayment is reduced and the operating expenses are
recognised in the Consolidated Income Statement.
(P) CURRENT ASSET INVESTMENTS
Current asset investments are categorised as financial assets at fair value through profit or loss. All gains or
losses together with transaction costs are recognised in the income statement. The fair value of the listed
investments which are traded in active markets are based on quoted market prices at the statement of
financial position date. The appropriate quoted price for investments held is the current bid price.
The fair value of interests in unlisted funds whose net asset values are referenced to the fair values of the
listed or exchange traded securities held by those funds are deemed to be to be level 2.
The fair value of the unlisted investments (deemed to be Level 3, see note 19) which are not traded in an
active market is determined by using alternative valuation techniques. The Group uses a variety of methods
and makes assumptions that are based on market conditions existing at each reporting date. Valuation
techniques used include the use of comparable recent arm’s length transactions, reference to other
instruments that are substantially the same, discounted cash flow analysis and other valuation techniques
commonly used by market participants making the maximum use of market inputs and relying as little as
possible on entity-specific inputs. When determining the inputs into the valuation techniques used, priority
is given to publicly available prices from independent sources when available, but overall the source of pricing
is chosen with the objective of arriving at a fair value measurement that reflects the price at which an orderly
transaction would take place between market participants on the measurement date.
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Notes to the Financial Statements continued
174
Impax Asset Management Group plc
Annual Report and Accounts 2022
175
31 ACCOUNTING POLICIES CONTINUED
(Q) Derivatives
The Group uses foreign exchange contracts as a hedge against foreign exchange risk on future income
denominated in foreign currencies. At the statement of financial position date these derivative contracts are
recorded at their fair value (disclosed as derivative asset or liability) on the statement of financial position.
In instances where the hedge accounting criteria is met, changes in the fair value are recorded in other
comprehensive income. The amounts recognised in other comprehensive income are reclassified to income
when the hedged item (such as the relevant foreign exchange income) is recorded.
The Group also uses futures contracts to hedge the market risk on seed investments made. These are also
recorded at their fair value in the statement of financial position with any changes recorded in the income
statement as part of fair value gains and losses.
(R) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and short-term deposits with an original maturity period
of three months or less.
(S) Trade and other payables
Trade and other payables are initially recognised at cost and subsequently remeasured at amortised cost
using the effective interest rate method. Accruals are based on the latest information and therefore require
a degree of estimation.
(T) Loans
Loans are initially recognised at fair value (net of transaction costs) and subsequently carried at amortised cost.
(U) Ordinary shares
Ordinary shares issued by the Group are recorded at the proceeds received, net of direct issue costs.
(V) Own Shares
Company Shares held by the Group’s Employee Benefit Trusts are deducted from shareholder’s funds and
classified as Own Shares.
(W) Impairment of assets
At the statement of financial position date, the Group reviews the carrying amount of assets to determine
whether there is any indication that those assets have suffered an impairment loss or if events or changes
in circumstances indicate that the carrying value may not be recoverable. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the impairment loss
is recognised as an expense.
When an impairment loss subsequently reverses, the carrying amount of the asset is increased to the
revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does
not exceed the carrying amount that would have been determined had no impairment loss been recognised
for the asset. A reversal of an impairment loss is recognised as income immediately, unless the relevant asset
is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation
increase. Impairment losses relating to goodwill are not reversed.
(X) Interests in unconsolidated structured entities
The Group classifies the following investment funds and accounts as unconsolidated structured entities:
• Segregated mandates and pooled funds managed where the Group does not hold any direct interest.
In this case, the Group considers that its aggregate economic exposure is insignificant, and, in relation to
segregated mandates and certain pooled funds, the third-party investor has the practical ability to remove
the Group from acting as fund manager, without cause. As a result the Group concludes that it acts as an
agent for third-party investors.
• Pooled funds managed by the Group where the Group holds a direct interest, for example seed capital
investments, and the Group’s aggregate economic exposure in the fund relative to third-party investors
is less than 20 per cent (i.e. the threshold established by the Group for determining agent versus principal
classification). Here, the Group concludes that it is an agent for third-party investors and therefore accounts
for its beneficial interest in the fund as a financial asset. The disclosure of the AUM in respect of consolidated
and unconsolidated structured entities is provided in note 20.
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Notes to the Financial Statements continued
Company Statement of Financial Position
176
Impax Asset Management Group plc
Annual Report and Accounts 2022
177
Company Statement of Financial Position | As at 30 September 2022
Company No: 03262305
Assets
Intangible assets
Property, plant and equipment
Investments
Deferred tax assets
Trade and other receivables
Total non-current assets
Trade and other receivables
Investments
Cash invested in money market funds
Cash and cash equivalents
Total current assets
Total assets
Equity and Liabilities
Ordinary shares
Share premium
Merger reserve
Retained earnings
Total equity
2022
2021
Notes
£000
£000
£000
£000
33
34
35
39
36
36
37
24
76
4,723
48,098
–
13,819
2,462
7,255
14
1,179
1,326
9,291
1,533
50,041
–
5,301
42,699
1,581
16,264
66,716
65,845
10,910
77,626
3,850
7,564
50
750
1,326
9,291
1,533
38,876
62,191
51,026
Trade and other payables
Current tax liability
Deferred tax liability
Lease liabilities
Total current liabilities
Lease liabilities
Total non-current liabilities
Total equity and liabilities
2022
2021
Notes
38
£000
10,248
835
32
891
34
3,429
£000
12,006
3,429
77,626
£000
21,825
32
–
856
4,320
£000
22,713
4,320
78,059
Authorised for issue and approved by the Board on 29 November 2022. The notes on pages 180 to 190 form
part of these financial statements.
12,214
78,059
Ian R Simm
Chief Executive
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Company Statement of Changes in Equity
Company Statement of Cash Flows
178
Impax Asset Management Group plc
Annual Report and Accounts 2022
179
Company Statement of Changes in Equity | For the year ended 30 September 2022
Company Statement of Cash Flows | For the year ended 30 September 2022
1 October 2020
Profit for the year
Transactions with owners
New shares issued
Dividends paid
Tax credit on long-term incentive schemes
Cash received on option exercises
Share based payment charges
Total transactions with owners
30 September 2021
Profit for the year
Transactions with owners
Dividends paid
Tax charge on long-term incentive schemes
Cash received on option exercises
Share based payment charges
Acquisition of own shares
Total transactions with owners
30 September 2022
Share
capital
£’000
Share
premium
£’000
Merger
Reserve
£’000
Retained
earnings
£’000
Note
14
14
1,304
9,291
–
22
–
–
–
–
22
–
–
–
–
–
–
–
1,326
9,291
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
£’000
51,018
5,250
–
–
40,423
5,250
1,533
(20)
1,535
–
–
–
–
1,533
1,533
–
–
–
–
–
–
–
(13,616)
(13,616)
1,539
597
1,539
597
4,703
4,703
(6,797)
(5,242)
38,876
51,026
42,736
42,736
(28,665)
(28,665)
(816)
(816)
540
6,151
540
6,151
(8,781)
(8,781)
(31,571)
(31,571)
1,326
9,291
1,533
50,041
62,191
The notes on pages 180 to 190 form part of these financial statements.
Cash (used by)/generated from operations
Corporation tax
Net cash (used by)/generated from operations
Investing activities:
Dividend received
Investments in new subsidiaries
Proceeds on sale of investments/(new investments)
Settlement of investment related hedges
Interest received
Decrease in cash invested in money market funds
Purchase of intangible assets
Purchase of property, plant & equipment
Net cash generated from investing activities
Financing activities:
Interest paid on bank borrowings
Payment of lease liabilities
Dividends paid
Acquisition of own shares
Cash received on exercise of Impax share options
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effect of foreign exchange rate changes
Cash and cash equivalents at end of year
2022
£000
(3,558)
(41)
(3,599)
38,135
(11)
355
69
4,154
36
(81)
(522)
42,135
(141)
(1,060)
(28,665)
(8,781)
540
(38,107)
429
750
–
1,179
2021
£000
3,259
(47)
3,212
2,190
(770)
(2,529)
(455)
646
9,113
–
(166)
8,029
(84)
(1,058)
(13,616)
–
597
(14,161)
(2,920)
3,670
–
750
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Notes to the Company Financial Statements
180
Impax Asset Management Group plc
Annual Report and Accounts 2022
181
Notes to the Company Financial Statements
32 SIGNIFICANT ACCOUNTING POLICIES
The separate financial statements of the Company are presented as required by the Companies Act 2006.
The principal accounting policies adopted are the same as those set out in the Group’s financial statements
disclosures. In addition note 35 sets out the accounting policy in respect of investments in subsidiary
undertakings.
The Company has taken advantage of the exemption allowed under Section 408 of the Companies Act 2006
and has not presented its own statement of comprehensive income in these financial statements. The
Company’s net profit for the year amounted to £42,736,000 (2021: £5,250,000).
33 INTANGIBLE ASSETS
Cost
As at 1 October 2020 and 30 September 2021
Additions
As at 30 September 2022
Accumulated amortisation
As at 1 October 2020 and 30 September 2021
Charge for the year
As at 30 September 2022
Net book value
As at 30 September 2022
As at 30 September 2021
As at 30 September 2020
Software
£000
Total
£000
–
81
81
–
5
5
76
–
–
–
81
81
–
5
5
76
–
–
34 PROPERTY PLANT AND EQUIPMENT
Cost
As at 1 October 2020
Additions
As at 30 September 2021
Additions
As at 30 September 2022
Depreciation
As at 1 October 2020
Charge for the year
As at 30 September 2021
Charge for the year
As at 30 September 2022
Net book value
As at 30 September 2022
As at 30 September 2021
As at 1 October 2020
Right of
use asset
£000
Leasehold
improvements
£000
Fixtures,
fittings and
equipment
£000
5,582
–
5,582
–
5,582
722
719
1,441
721
2,162
3,420
4,141
4,860
2,061
–
2,061
257
2,318
1,096
144
1,240
177
1,417
901
821
965
1,411
166
1,577
265
1,842
1,054
184
1,238
202
1,440
402
339
357
Total
£000
9,054
166
9,220
522
9,742
2,872
1,047
3,919
1,100
5,019
4,723
5,301
6,182
The carrying value of the Group’s right of use assets, associated lease liabilities and the movements during
the period are set out below.
At 1 October 2021
Lease payments
Interest expense
Depreciation charge
At 30 September 2022
Right of
use asset
£m
4,141
–
–
(721)
3,420
Current
Non current
Lease
liabilities
£m
5,176
(1,060)
204
–
4,320
891
3,429
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Impax Asset Management Group plc
Annual Report and Accounts 2022
183
34 PROPERTY PLANT AND EQUIPMENT CONTINUED
The contractual maturities on the undiscounted minimum lease payments under lease liabilities are
provided below:
Within one year
Between 1 and 5 years
Later than 5 years
Total undiscounted lease liabilities
2022
£000
1,059
3,706
–
4,765
2021
£000
1,059
4,235
529
5,823
35 NON-CURRENT INVESTMENTS
Investments held by the Company in subsidiary undertakings are held at cost less any provision for impairment
which is assessed based on the underlying net assets.
At 1 October 2020
Additions
Capital contribution
At 30 September 2021
Additions
Capital contribution
At 30 September 2022
The subsidiary undertakings are:
Total
£000
36,465
770
5,464
42,699
11
5,388
48,098
Impax Asset Management Limited*
Impax Asset Management (AIFM) Limited*
Impax Asset Management LLC***
INEI I GP (UK) LLP
INEI II GP (UK) LLP
INEI III GP (UK) LLP
Impax Carried Interest Partner (GP) Limited
Country of
incorporation
Proportion
of ordinary
capital held Nature of business
UK
UK
USA
UK
UK
UK
UK
100%
100%
100%
100%
100%
100%
100%
Fund management
Fund management
Fund management
General partner to private equity fund
General partner to private equity fund
General partner to private equity fund
General partner to private equity fund
Country of
incorporation
Proportion
of ordinary
capital held Nature of business
Impax Carried Interest Partner II (GP) Limited
Impax Global Resource Optimization Fund (GP)
Limited
Impax US Holding Limited
Impax New Energy Investors (GP) Limited
Impax New Energy Investors II (GP) Limited
Impax Capital Limited
UK
UK
UK
UK
UK
UK
100%
100%
100%
100%
100%
100%
General partner to private equity fund
General partner to listed equity fund
Holding company
Holding company
Holding company
Dormant
Impax New Energy Investors Management SARL
Luxembourg
100%
General partner to private equity fund
Kern USA Inc.
USA
100%
Holding company for US assets
Impax Asset Management (Hong Kong) Ltd**
Hong Kong
100%
Fund management
Impax Asset Management (US) LLC
Impax Asset Management Ireland Limited****
INEI III Team Co-Investment LP
IAM US Holdco, Inc.
Impax Global Opportunities (GP) Limited
USA
Ireland
UK
USA
UK
100%
100%
80%
100%
100%
Fund management
Fund management
Investment Partnership
Holding company
General partner to listed equity fund
INEI IV Team Co-investment LP
Luxembourg 69.7%
Investment Partnership
INEI IV GP S.a.r.l.
Luxembourg
100%
General partner to private equity fund
* FCA regulated.
** Hong Kong SFC regulated.
*** SEC regulated.
**** CBI regulated.
Companies incorporated in the UK are registered at 30 Panton Street, London. The entity incorporated
in Hong Kong has the address Unit 15, 16/F, Nexxus Building, 41 Connaught Road, Hong Kong. Impax New
Energy Investors Management SARL has the address 15 Boulevard F. W. Raiffeisen – L-2411 Luxembourg,
BP 2501, L-1025 Luxembourg. Impax Asset Management LLC has the address 30 Penhallow St, Suite 400,
Portsmouth, NH 03801. Impax Asset Management (US) LLC has the address 1209 Orange Street, Delaware,
USA and IAM US Holdco, Inc. has the address 251 Little Falls Drive, New Castle County, Delaware, USA.
INEI IV GP S.a.r.l. has the address 42–44 Avenue de la Gare, Luxembourg, 1610.
Charges relating to options or other share awards over the Company’s shares granted to employees of
subsidiary undertakings are accounted for in the subsidiary undertaking. In the Company financial statements
the capital contribution in respect of this charge has been recognised as an increase in the investment in
subsidiaries.
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184
Impax Asset Management Group plc
Annual Report and Accounts 2022
185
35 NON-CURRENT INVESTMENTS CONTINUED
Investments in subsidiary undertakings are divided between interest in shares and capital contributions
as follows:
Interest in shares
Capital contribution
36 TRADE AND OTHER RECEIVABLES
Current:
Trade receivables
Amounts owed by Group undertakings
Other receivables
Prepayments and accrued income
Non-current:
Amounts owed by Group undertakings
2022
£000
21,019
27,079
48,098
2022
£000
116
11
1,079
1,256
2,462
13,819
13,819
2021
£000
21,008
21,691
42,699
2021
£000
–
1,872
999
979
3,850
16,264
16,264
As at 30 September 2022, the assessed provision under the IFRS 9 expected loss model for trade and other
receivables was immaterial (2021: immaterial).
37 CURRENT ASSET INVESTMENTS
At 1 October 2020
Additions
Fair value movements
Repayments/disposals
At 30 September 2021
Additions
Fair value movements
Repayments/disposals
At 30 September 2022
Investments
£000
4,387
2,832
648
(303)
7,564
256
46
(611)
7,255
38 TRADE AND OTHER PAYABLES
Trade payables
Amounts owed to Group undertakings
Taxation and other social security
Other payables
Accruals
2022
£000
402
1,748
229
223
7,646
10,248
39 DEFERRED TAX
The deferred tax asset included in the Company Statement of Financial Position is as follows:
As at 30 September 2020
Credit/(charge) to the income statement
As at 30 September 2021
Charge to equity
Credit/(charge) to the income statement
As at 30 September 2022
Accelerated
capital
allowances
£000
Other
temporary
differences
£000
Share-based
payment
scheme
£000
(82)
–
(82)
–
–
(82)
(127)
–
(127)
–
(160)
(287)
820
970
1,790
(1,413)
(40)
337
2021
£000
374
12,806
819
99
7,727
21,825
Total
£000
611
970
1,581
(1,413)
(200)
(32)
40 FINANCIAL COMMITMENTS
At 30 September 2022 the Company has outstanding commitments to invest up to the following amounts
into private equity funds that it manages:
• €57,499 (2021: €113,000) into Impax New Energy Investors II LP; this amount could be called on in the period
to 22 March 2023;
• €1,276,000 into Impax New Energy Investors III LP (2021: €1,567,000); this amount could be called on in the
period to 31 December 2026; and
• €1,446,977 into Impax New Energy Investors IV LP (2021: €449,616); this amount is called on in the period to
31 October 2031.
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Notes to the Company Financial Statements continued
186
Impax Asset Management Group plc
Annual Report and Accounts 2022
187
41 RECONCILIATION OF PROFIT BEFORE TAX TO CASH GENERATED FROM OPERATIONS
The Company’s exposure to foreign exchange rate risk at 30 September 2022 was:
Operating activities:
Profit before taxation
Adjustments for:
Depreciation of property, plant & equipment
Finance income
Finance expense
Share-based payment
Adjustments for statement of financial positions movements:
Decrease/(increase) in trade and other receivables
Decrease in trade and other payables
Cash (used in)/generated from operations
2022
£000
2021
£000
44,376
5,822
1,105
(42,403)
345
627
3,952
(11,560)
(3,558)
1,047
(3,029)
1,361
458
(456)
(1,944)
3,259
EUR/ GBP
£000
USD/GBP
£000
Other/GBP
£000
Assets
Current asset investments
Trade and other receivables
Cash and cash equivalents
Liabilities
Trade and other payables
3,534
125
1
3,660
3
3
3,721
13,887
314
17,922
35
35
Net exposure
3,657
17,887
The Company’s exposure to foreign currency exchange rate risk at 30 September 2021 was:
–
–
–
–
–
–
–
42 FINANCIAL RISK MANAGEMENT
The risk management processes of the Company are aligned to those of the Group as a whole.
The Company’s specific risk exposures are explained below.
Credit risk
The Company’s primary exposure to credit risk relates to cash and deposits that are placed with regulated
financial institutions and amounts due from subsidiaries.
At the statement of financial position date, the credit risk regarding cash and cash equivalent balances of the
asset management business was spread by holding part of the balance with RBS (Standard & Poor’s credit
rating A-2) and the remainder in a money market funds managed by BlackRock (with a Standard & Poor’s
credit rating of AAA) and Goldman Sachs with a Standard & Poor’s credit rating of A-1. The risk of default is
considered minimal.
Foreign exchange risk
The amount of the Company’s expenses denominated in foreign currencies is minimal.
The Company activities are principally conducted in Sterling, Euro, and US dollars. Foreign exchange risk
arises from income received in these currencies together with a limited amount of exposure to costs payable.
Assets
Current asset investments
Trade and other receivables
Cash and cash equivalents
Liabilities
Trade and other payables
Net exposure
EUR/GBP
£000
USD/GBP
£000
Other/GBP
£000
3,472
275
45
4,091
18,732
71
3,792
22,894
3
3
894
894
3,789
22,000
–
–
–
–
–
–
–
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188
Impax Asset Management Group plc
Annual Report and Accounts 2022
189
42 FINANCIAL RISK MANAGEMENT CONTINUED
The following table demonstrate the estimated impact on Group post-tax profit and net assets and Company
post-tax profit and net assets caused by a 5 per cent movement in the exchange rate used to revalue
significant foreign assets and liabilities, assuming all other variables are held constant. Post-tax profit either
increases or (decreases).
Translation of significant foreign assets and liabilities
GBP strengthens against the USD, up 5%
GBP weakens against the USD, down 5%
GBP strengthens against the EUR, up 5%
GBP weakens against the EUR, down 5%
Post-tax profit
2022
£000
2021
£000
(724)
724
(148)
148
(891)
891
153
(153)
Liquidity risk
Liquidity risk is the risk that the Company does not have sufficient financial resources to meets it obligations
when they fall due or will have to do so at cost. The Company can request to borrow cash through intra-
Group loans to maintain sufficient liquidity.
Interest rate risk
At the reporting date the Company’s cash and cash equivalents and cash invested in money market funds
of £1,193,000 (2021: £800,000) were its only financial instruments subject to variable interest rate risk. The
impact of a 1% increase or decrease in interest rate on the post-tax profit is not material to the Company.
Market pricing risk
The Company has made investments in its own managed funds and the value of these investments are
subject to equity market risk.
Financial instruments by category
The Directors consider there to be no difference between the carrying value of the Group’s financial assets
and liabilities and their fair value.
30 September 2022
Property, plant and equipment
Non-current investments
Deferred tax assets
Trade and other receivables
Investments
Cash invested in money market funds
Cash and cash equivalents
Current tax liability
Trade and other payables
Lease liabilities
Total
30 September 2021
Property, plant and equipment
Non-current investments
Deferred tax assets
Trade and other receivables
Investments
Cash invested in money market funds
Cash and cash equivalents
Current tax liability
Trade and other payables
Lease liabilities
Total
* FVPTL = Fair value through profit and loss.
Financial
assets
measured at
FVPTL
£000
Financial
assets /
liabilities at
amortised
cost
£000
Total financial
instruments
£000
Non-financial
instruments
£000
–
–
–
–
7,255
14
–
–
–
–
7,269
–
–
–
15,025
–
–
1,179
–
(2,373)
(4,320)
9,511
–
–
–
15,025
7,255
14
1,179
–
(2,373)
(4,320)
16,780
4,723
48,098
–
1,256
–
–
–
(835)
(7,875)
–
45,367
Financial
assets
measured at
FVPTL
£000
Financial
assets /
liabilities at
amortised
cost
£000
Total financial
instruments
£000
Non-financial
instruments
£000
–
–
–
–
7,564
50
–
–
–
–
7,614
–
–
–
19,135
–
–
750
–
(13,279)
(5,176)
1,430
–
–
–
19,135
7,564
50
750
–
(13,279)
(5,176)
9,044
5,301
42,699
1,581
979
–
–
–
(32)
(8,546)
–
41,982
Total
£000
4,723
48,098
–
16,281
7,255
14
1,179
(835)
(10,248)
(4,320)
62,147
Total
£000
5,301
42,699
1,581
20,114
7,564
50
750
(32)
(21,825)
(5,176)
51,026
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Notes to the Company Financial Statements continued
190
Impax Asset Management Group plc
Annual Report and Accounts 2022
191
Notice of Annual General Meeting
42 FINANCIAL RISK MANAGEMENT CONTINUED
The hierarchical classification of current investments measured at fair value are as follows:
At 1 October 2021
Additions
Fair value
Disposals
At 30 September 2022
Level 1
£000
4,090
–
(369)
–
3,721
Level 2
£000
–
–
–
–
–
Level 3
£000
3,474
256
415
(611)
Total
£000
7,564
256
46
(611)
3,534
7,255
There were no movements between any of the levels in the year (2021: £nil).
Notice of Annual General Meeting
Notice is hereby given that the Annual General Meeting of Impax Asset Management Group plc
(the “Company”) will be held at the offices of the Company, 7th floor, 30 Panton Street, London
SW1Y 4AJ at 11.30 am on 16 March 2023 for the following purposes:
AS ORDINARY BUSINESS
To consider and, if thought fit, pass the following resolutions which will be proposed as ordinary resolutions:
1.
2.
To receive and adopt the Company’s annual accounts for the financial year ended 30 September 2022
together with the Directors’ report and the auditor’s report on those accounts.
To receive and approve the Directors’ Remuneration Report, which is set out on pages 108 to 117 of the
Annual Report and Accounts for the year ended 30 September 2022. The vote is advisory and the
directors’ entitlement to remuneration is not conditional on the resolution being passed.
3. To re-elect Sally Bridgeland as a Director.
4. To re-elect Ian R Simm as a Director.
5. To re-elect Arnaud de Servigny as a Director.
6. To elect Annette E Wilson as a Director.
7.
To re-elect Lindsey Brace Martinez as a Director.
8. To re-elect William Simon O’Regan as a Director.
9. To reappoint KPMG LLP as auditor of the Company.
10. To authorise the Directors to fix the remuneration of the auditor.
11.
To declare a final dividend in respect of the financial year ended 30 September 2022 of 22.9 pence per
Ordinary Share payable to the holders of Ordinary Shares on the register of members at the close of
business on 10 February 2023.
AS SPECIAL BUSINESS
To consider and, if thought fit, pass the following resolutions, resolution 12 of which will be proposed as
an ordinary resolution and resolutions 13, 14 and 15 of which will be proposed as special resolutions:
12.
THAT, in substitution for any subsisting authorities to the extent unused, the Directors of the Company
be generally and unconditionally authorised in accordance with section 551 of the Companies Act 2006
(the “Act”), to exercise all the powers of the Company to allot shares in the Company and to grant rights
to subscribe for, or to convert any security into, shares in the Company:
(a)
up to an aggregate nominal amount of £441,988 (such amount to be reduced by the nominal
amount of any equity securities allotted pursuant to the authority in paragraph (b) below in excess
of £441,988) and
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Notes to the Company Financial Statements continued
192
Impax Asset Management Group plc
Annual Report and Accounts 2022
193
Notice of Annual General Meeting continued
(b)
comprising equity securities (as defined by section 560 of the Act) up to an aggregate nominal
amount of £883,977 (such amount to be reduced by the nominal amount of any shares allotted or
rights granted pursuant to the authority in paragraph (a) above) in connection
with an offer by way of a rights issue:
(i)
(ii)
to holders of Ordinary Shares in proportion (as nearly as may be practicable) to their
respective holdings; and
to holders of other equity securities as required by the rights of those securities or
as the Directors otherwise consider necessary,
but subject to such exclusions or other arrangements as the Directors may deem necessary or
expedient in relation to Treasury Shares, fractional entitlements, record dates, legal or practical
problems in or under the laws of any territory or the requirements of any regulatory body or
stock exchange,
provided that this authority shall, unless renewed, varied or revoked by the Company, expire at the
conclusion of the Company’s next Annual General Meeting (or, if earlier, close of business on 16 June
2024) except that the Company may at any time before such expiry make any offer or agreement which
would or might require shares to be allotted or rights to subscribe for or convert securities into shares to
be granted after such expiry and the Directors may allot shares or grant rights to subscribe for or
convert securities into shares in pursuance of such offer or agreement as if the authority conferred
hereby had not expired.
13.
THAT, subject to the passing of resolution 12 above dealing with the authority to allot pursuant to
section 551 of the Companies Act 2006 (the “Act”), the Directors of the Company be and are hereby
empowered pursuant to section 570 of the Act to allot equity securities (within the meaning of section
560 of the Act) for cash, pursuant to the authority conferred by resolution 12 above or by way of a sale
of Treasury Shares, as if section 561 of the Act did not apply to any such allotment or sale, provided that
the power conferred by this resolution shall be limited to:
(a)
the allotment or sale of equity securities, either in connection with an issue or offer of equity
securities (including, without limitation, under a rights issue, open offer or similar arrangement) to
holders of equity securities in proportion (as nearly as may be practicable) to their respective
holdings of equity securities, subject only to such exclusions or other arrangements as the Directors
of the Company may consider necessary or expedient to deal with any Treasury Shares, fractional
entitlements or legal or practical problems under the laws of any territory, or the requirements of
any regulatory body or stock exchange in any territory; and
(b)
the allotment or sale (otherwise than pursuant to resolution 13(a)) of equity securities or
sale of Treasury Shares up to an aggregate nominal value of £66,298,
the power conferred by this resolution shall expire at the conclusion of the Company’s next Annual
General Meeting (or, if earlier, at the close of business on 16 June 2024), except that the Company may
at any time before such expiry make any offer or agreement which would or might require equity
securities to be allotted (and Treasury Shares to be sold) after such expiry and the Directors of the
Company may allot equity securities (and sell Treasury Shares) in pursuance of such an offer or
agreement as if the authority conferred hereby had not expired.
14.
THAT, subject to the passing of resolution 12 above, the Directors of the Company be and are hereby
empowered in addition to any authority granted under resolution 13(b) to allot equity securities (within
the meaning of section 560 of the Act) for cash under the authority given by that resolution and/or to
sell ordinary shares held by the Company as Treasury Shares for cash as if section 561 of the Act did not
apply to any such allotment or sale, such authority to be:
(a)
(b)
limited to the allotment of equity securities or sale of Treasury Shares up to a nominal amount
of £66,298 and
used only for the purposes of financing (or refinancing, if the authority is to be used within
six months after the original transaction) a transaction which the Directors determine to be an
acquisition or other capital investment of a kind contemplated by the Statement of Principles on
Disapplying Pre-Emption Rights most recently published by the Pre-Emption Group prior to the
date of this notice,
the power conferred by this resolution shall expire at the conclusion of the Company’s next Annual
General Meeting (or, if earlier, at the close of business on 16 June 2024), except that the Company may
at any time before such expiry make any offer or agreement which would or might require equity
securities to be allotted (and Treasury Shares to be sold) after such expiry and the Directors of the
Company may allot equity securities (and sell Treasury Shares) in pursuance of such an offer
or agreement as if the authority conferred hereby had not expired.
15.
THAT the Company be and is generally authorised for the purposes of section 701 of the Act to make
one or more market purchases (within the meaning of section 693(4) of the Act) of its Ordinary Shares
of 1 pence each provided that:
(a) the maximum aggregate number of Ordinary Shares that may be purchased is 13,259,655;
(b) the minimum price which may be paid for each Ordinary Share is 1 pence;
(c)
(d)
the maximum price which may be paid for each Ordinary Share is not more than 105 per cent of
the average of the middle market quotations for an Ordinary Share taken from the London Stock
Exchange for the five business days immediately preceding the day of purchase; and
unless previously renewed, varied or revoked, the authority conferred by this resolution shall expire
at the conclusion of the Company’s next Annual General Meeting save that the Company may make
a contract or contracts to purchase Ordinary Shares under the authority conferred by this
resolution prior to the expiry of such authority which will or may be executed wholly or partly after
the expiry of such authority and may make a purchase of Ordinary Shares in pursuance of any such
contract or contracts.
By order of the Board
Zack Wilson
Company Secretary
16 December 2022
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Impax Asset Management Group plc
Annual Report and Accounts 2022
195
Notice of Annual General Meeting continued
Memberships
Memberships
Notes:
1 You can vote:
• by logging on to www.signalshares.com and following the
instructions; or
• you may request a hard copy form of proxy directly from the
registrars, Link Group on tel: 0371 664 0300. Calls are charged
at the standard geographic rate and will vary by provider. Calls
outside the United Kingdom will be charged at the applicable
international rate. We are open between 09:00 – 17:30,
Monday to Friday excluding public holidays in England and
Wales; or
• in the case of CREST members, by utilising the CREST
electronic proxy appointment service in accordance with the
procedures set out below.
In order for a proxy appointment to be valid please ensure that
you have recorded proxy details with Link Group by 11.30 a.m. on
14 March 2023.
2
Any member entitled to attend and vote at the meeting is
entitled to appoint a proxy or proxies to attend, speak and vote
in his or her stead. A member may appoint more than one proxy
provided each proxy is appointed to exercise rights attached to
different shares. A member may not appoint more than one
proxy to exercise rights attached to any one share. A proxy
need not be a member of the Company. Completion and return
of a form of proxy or CREST Proxy Instruction (as described in
note 5) will not preclude a member from attending and voting
in person at the meeting should he or she so decide. You can
only appoint a proxy using the procedures set out in these notes
and the notes to the form of proxy. If you appoint a proxy and
attend the meeting in person, your proxy appointment will
automatically be terminated.
3 To be valid, the form of proxy and the power of attorney or
other authority (if any) under which it is signed (or a notarially
certified copy of such power of authority) must be deposited at
the offices of Link Group, PXS1, Central Square, 29 Wellington
Street, Leeds, LS1 4DL, United Kingdom by 11.30 a.m. on 14
March 2023. To change your proxy instructions simply submit a
new proxy appointment using the methods set out above and in
the notes to the form of proxy. Note that the cut-off time for
receipt of proxy appointments also applies in relation to
amended instructions; any amended proxy appointment
received after the relevant cut-off time will be disregarded.
4 To be entitled to attend and vote at the meeting (and for the
purpose of the determination by the Company of the number of
votes they may cast), members must be entered in the Register
of Members at close of business on 14 March 2023 (or, in the
event of any adjournment, close of business on the date which
is two days before the time of the adjourned meeting).
5
CREST members who wish to appoint a proxy or proxies through
the CREST electronic proxy appointment service may do so for
the meeting and any adjournment(s) thereof by using the
procedures described in the CREST Manual.
CREST personal members or other CREST sponsored members,
and those CREST members who have appointed a voting
service provider(s) should refer to their CREST sponsors or
voting service provider(s), who will be able to take the
appropriate action on their behalf. In order for a proxy
appointment or instruction made by means of CREST to be
valid, the appropriate CREST message (a “CREST Proxy
Instruction”) must be properly authenticated in accordance with
Euroclear UK & Ireland Limited’s specifications and must contain
the information required for such instructions, as described in
the CREST Manual. The message must be transmitted so as to
be received by the Company’s agent, Link Group (CREST
Participant ID: RA10), no later than 48 hours before the time
appointed for the meeting. For this purpose, the time of receipt
will be taken to be the time (as determined by the time stamp
applied to the message by the CREST Application Host) from
which the Company’s agent is able to retrieve the message by
enquiry to CREST in the manner prescribed by CREST. CREST
members and, where applicable, their CREST sponsors or voting
service provider(s) should note that Euroclear UK & Ireland
Limited does not make available special procedures in CREST
for any particular messages. Normal system timings and
limitations will therefore apply in relation to the input of CREST
Proxy Instructions. It is the responsibility of the CREST member
concerned to take (or, if the CREST member is a CREST
personal member or sponsored member or has appointed a
voting service provider(s), to procure that his CREST sponsor or
voting service provider(s) take(s)) such action as shall be
necessary to ensure that a message is transmitted by means of
the CREST system by any particular time. In this connection,
CREST members and, where applicable, their CREST sponsors
or voting service provider(s) are referred in particular to those
sections of the CREST Manual concerning practical limitations
of the CREST system and timings. The Company may treat as
invalid a CREST Proxy Instruction in the circumstances set
out in Regulation 35(5) of the Uncertificated Securities
Regulations 2001.
6 As at 10 December 2022 (being the last practicable date prior to
the publication of this notice) the total number of Ordinary
Shares in the Company in issue was 132,596,554 and the
Company held no Shares in treasury. The total number of voting
rights on that date was therefore 132,596,554.
7
Members have a right under section 319A of the Companies Act
2006 to require the Company to answer any question raised by
a member at the annual general meeting, which relates to the
business being dealt with at the meeting, although no answer
need be given: (a) if to do so would interfere unduly with the
preparation of the meeting or involve disclosure of confidential
information; (b) if the answer has already been given on the
Company’s website; or (c) if it is undesirable in the best interests
of the Company or the good order of the meeting.
8 A copy of this notice of annual general meeting and other
information required by section 311A of the Companies Act
2006, can be found at www.impaxam.com.
Impax is a member of many organisations where we work collaboratively, in many cases with peers,
to support the expansion of sustainable finance. Here is a selection of our current memberships.
• Asian Corporate Governance Association (ACGA)
• Natural Capital Investment Alliance (NCIA)
• Carbon Disclosure Project (CDP)
• Net Zero Asset Managers Initiative (NZAM)
• Ceres
• NH Businesses for Social Responsibility
• Climate Financial Risk Forum (CFRF)
• Plastic Solutions Investor Alliance (As You Sow)
• Confederation of British Industry (CBI)
• Powering Past Coalition Alliance
• Council of Institutional Investors (CII)
• Principles for Responsible Investment (PRI)
• Defined Contribution Institutional Investment
• Race at Work
Association
• Energy Transitions Commission (ETC)
• FAIRR
• Financing a Just Transition Alliance
• ShareAction Investor Decarbonization Initiative
• Shareholder Rights Group
• Sustainable Investment Institute
• Taskforce on Climate-related Financial Disclosures
• Finance Sector Deforestation Action
(TCFD)
• The Forum for Sustainable and Responsible
• Taskforce on Nature-related Financial Disclosures
Investment (US SIF)
(TNFD)
• Global Impact Investing Network (GIIN)
• Thirty Percent Coalition
• Institutional Investors Group on Climate Change
• UK Stewardship Code
(IIGCC)
• UK Sustainable Investment and Finance Association
• Interfaith Center on Corporate Responsibility (ICCR)
(UKSIF)
• Investor Environmental Health Network (IEHN)
• Women in Finance
• Long-term Investors in People’s Health Initiative
(LIPH)
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Alternative Performance Measures
196
Impax Asset Management Group plc
Annual Report and Accounts 2022
197
Alternative Performance Measures
The Group uses the following Alternative Performance Measures (“APMs”).
ADJUSTED OPERATING PROFIT, ADJUSTED PROFIT BEFORE TAX AND ADJUSTED PROFIT AFTER TAX
These APMs exclude the impact of the following items:
• amortisation of intangible assets which arose on the acquisition of Impax NH;
• charges in respect of equity incentive scheme related to the acquisition of Impax NH;
• mark-to-market charges in respect of National Insurance payable on share awards;
• fair value movements in contingent consideration payable on the acquisition of Impax NH;
• foreign exchange gains and losses on the retranslation of intercompany loans and other unrealised foreign
exchange gains and losses;
• significant tax credits related to the prior year.
These performance measures are reported as they facilitate comparison with prior periods and provide an
appropriate comparison with our peers. Excluding amortisation of intangible assets arising from acquisitions
is consistent with peers and therefore aids comparability. It also aids comparison to businesses which have
grown organically, and do not have such charges. Fair value movements on contingent consideration are
excluded as they are one-off items and not representative of the operating performance of the Group. Mark
to market charges in respect of National Insurance are excluded as they arise due only to changes in the share
price and therefore do not reflect the operating performance of the Group. Foreign exchange gains and losses
on the retranslation of intercompany loans and other unrealised foreign exchange gains and losses are excluded
as they are not linked to the performance of the Group.
A reconciliation to the relevant IFRS terms is provided in note 4 of the financial statements.
ADJUSTED OPERATING MARGIN
This is calculated as the ratio of adjusted operating profit to revenue. This number is reported as it gives
a good indication of the underlying profitability of the company and how this has changed year on year.
ADJUSTED EARNINGS PER SHARE AND ADJUSTED EARNINGS PER SHARE
This is calculated as the adjusted profit after tax divided by the diluted number of shares used in the
calculation of IFRS diluted earnings per share.
This is used to present a measure of profitability per share in line with adjusted profits.
A reconciliation to IFRS diluted earnings per share is shown in note 4 of the financial statements.
RUN RATE REVENUE AND RUN RATE ADJUSTED OPERATING PROFIT
Run rate revenue is the revenue that the Group would report if the AUM for the year remained static at that
shown at 30 September and fee rates were those at 30 September. Run rate revenue margin is the ratio of
run rate revenue to AUM.
Run rate adjusted operating profit is the run rate revenue less adjusted operating costs for the month of
September extrapolated for 12 months. Adjustments are made to exclude any one-off items.
Run rate numbers are reported as they give a good indication of the current profitability of the Group.
CASH RESERVES
Cash reserves is the sum of cash and cash equivalents and cash held in money market accounts or fixed
term deposit accounts less cash held in research payment accounts and cash held by consolidated funds.
The calculation of cash reserves is shown in note 21 to the financial statements.
Cash reserves are reported as they give a good indication of the total cash resources available to the Group.
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Officers & Advisers
198
Impax Asset Management Group plc
Annual Report and Accounts 2022
199
Officers & Advisers
DIRECTORS
Sally Bridgeland (Chair)
Ian Simm (Chief Executive)
Lindsey Brace Martinez (Non-Executive)
Arnaud de Servigny (Non-Executive)
Vince O’Brien (Non-Executive)
Simon O’Regan (Non-Executive)
Annette Wilson (Non-Executive)1
REGISTRARS
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds
LS1 4DL
SECRETARY
Zack Wilson
REGISTERED OFFICE
7th Floor
30 Panton Street
London
SW1Y 4AJ
AUDITOR
KPMG LLP
15 Canada Square
London
E14 5GL
BANKERS
The Royal Bank of Scotland International
London Branch
1 Princes Street
London
EC2R 8BP
NOMINATED ADVISER AND BROKER
Peel Hunt LLP
7th Floor
100 Liverpool St
London
EC2M 2AT
JOINT BROKER
Berenberg
(Joh. Berenberg, Gossler & Co. KG, London Branch)
60 Threadneedle Street
London
EC2R 8HP
SOLICITOR
Stephenson Harwood LLP
1 Finsbury Circus
London
EC2M 7SH
1 Appointed 28 June 2022.
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CBP00019082504183028
Printed by a CarbonNeutral® Company certified to ISO 14001 environmental
management system.
Printed on material from well-managed, FSC™ certified forests and other controlled
sources.
100% of the inks used are HP Indigo ElectroInk which complies with RoHS
legislation and meets the chemical requirements of the Nordic Ecolabel (Nordic
Swan) for printing companies, 95% of press chemicals are recycled for further use
and, on average 99% of any waste associated with this production will be recycled
and the remaining 1% used to generate energy.
The paper is Carbon Balanced with World Land Trust, an international conservation
charity, who offset carbon emissions through the purchase and preservation of high
conservation value land.
Through protecting standing forests, under threat of clearance, carbon is locked-in,
that would otherwise be released.
WWW.IMPAXAM.COM
IMPAX ASSET
MANAGEMENT GROUP PLC
7th Floor
30 Panton Street
London
SW1Y 4AJ
United Kingdom
T: +44 (0)20 3912 3000
E: info@impaxam.com
@ImpaxAM
Impax Asset Management