Annual Report & Accounts
For the year ended 30 September 2023
25
years of pioneering
investment
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Impax Asset Management Group plc
Contents
Highlights
Overview
2
4 Why Impax?
6
Our Philosophy
Mission and Values
7
8 Where we Operate
9
Industry-wide Recognition
Chief Executive’s Report
Strategic Report
12
20 Key Performance Indicators
22 Financial Review
26 Our Strategic Priorities
30 Our Investment Strategies and
Performance
42 Beyond Financial Returns
52 Our People
55 Equity, Diversity & Inclusion
61
64 Climate-related Disclosures
88 Risk Management and Control
92 Engaging with our Stakeholders
Impax in the Community
Governance
100 Governance at a Glance
101 Chair’s Introduction
106 Board of Directors
110 Corporate Governance Report
116 Directors’ Report
119 Audit & Risk Committee Report
123 Remuneration Committee Report
Independent Auditor’s Report
Financial Statements
138
147 Consolidated Income Statement
147 Consolidated Statement of
Comprehensive Income
148 Consolidated Statement of
Financial Position
150 Consolidated Statement of
Changes in Equity
152 Consolidated Cash Flow Statement
154 Notes to the Financial Statements
193 Company Statement of Financial
Position
195 Company Statement of Changes
in Equity
196 Company Statement of Cash Flows
197 Notes to the Company
Financial Statements
208 Notice of Annual General Meeting
212 Memberships
213 Alternative Performance Measures
215 Officers & Advisers
Our 2023 reporting suite
Annual Report & Accounts
For the year ended 30 September 2023
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2023 Annual Report online
www.impaxam.com/investor-relations/
reports-and-presentations/
Impact Report 2023
Measuring contributions to the transition
to a more sustainable economy
FOR PROFESSIONAL INVESTORS ONLY. This document is a marketing communication.
2023 Impact Report
www.impaxam.com/investment-
philosophy/impact-reporting/
impaxam.com
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 the Impax Funds (formerly 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.
Investor Relations
www.impaxam.com/investor-relations
Impact Report 2023Measuring contributions to the transition to a more sustainable economyFOR PROFESSIONAL INVESTORS ONLY. This document is a marketing communication.impaxam.com
Annual Report and Accounts 2023
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Celebrating Impax’s
first 25 years
In the summer of 1998, Impax Asset Management
was founded with the award of a mandate from the
International Finance Corporation. 25 years on, the
Company is one of the largest and most established
investors focused on the transition to a more
sustainable economy.
Explore some of our major milestones and our
reflections on the opportunities that lie ahead
on our 25th anniversary microsite.
View our film about
Reflections on the transition
Ian Simm, Founder and CEO, and
Bruce Jenkyn-Jones, Chief Investment
Officer, Listed Investments, discuss evolving
opportunities and challenges for investors –
and for Impax – as the transition to a more
sustainable economy accelerates.
www.impaxam.com/impax25
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Impax Asset Management Group plc
Financial Highlights
£37.4bn
£178.4m
AUM1
2022: £35.7bn
Revenue
2022: £175.4m
27.6p
Dividend per
share4
2022: 27.6p
£52.1m
Profit before
tax
2022: £72.6m
£58.1m
Adjusted
operating
profit2
2022: £67.4m
£87.7m
Cash reserves3
2022: £107.0m
35.2p
Adjusted diluted
earnings
per share2
2022: 42.1p
£134.0m
Shareholders’ equity
2022: £138.2m
Read more about Our Financial Highlights
on page 20.
1 Assets under management and advice as at 30 September 2023. Assets under advice represent c. 3%
of total AUM.
2 Adjusted operating profit and adjusted diluted earnings per share are Alternative Performance Measures.
See page 213 for further information and note 4 of the financial statements for a reconciliation to the IFRS
reported results. Diluted earnings per share calculated in accordance with IFRS is 29.8 pence.
3 Represents cash and cash equivalents, plus cash invested in money market funds, less cash held in
research payment accounts. See page 213 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.
Annual Report and Accounts 2023
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Business Highlights
4.8%
increase
in AUM
90%
of clients report
positive view
of Impax
High client retention, despite
challenging markets.
Strengthened our distribution
capabilities, including in Japan,
Latin America and North America.
Made good progress in developing and
launching new products in listed equities.
Additional investment to expand the
Company’s fixed income offering.
Increased operational resilience and improved
efficiency, through investment in systems
and infrastructure.
Launched Sustainability Centre to facilitate
the scaling of resources in this key area.
Overall employee engagement score
rose to 90%.
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Impax Asset Management Group plc
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.
Partnership with global
clients
We manage assets for some of the world’s largest
asset owners. We are committed to outstanding
levels of client service with comprehensive and
transparent reporting.
25
years of specialist
investment experience
c.80%
clients from
outside UK
Investing in the transition to
a more sustainable economy
At Impax, every strategy is designed to intentionally allocate clients’
capital towards those companies we expect to benefit as the global
economy transitions to a more sustainable model.
Long-term trends in technology, consumer preferences, society and
public policy are driving fundamental change.
These sustainability challenges and disruptive forces are creating
transformations on the scale of the Industrial Revolution across all
sectors of the global economy, including transportation, energy,
healthcare, finance and agriculture.
We believe these trends will drive growth for companies that are
well positioned to benefit from this transition.
Annual Report and Accounts 2023
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Diversified
distribution network
We have successful long-term relationships
with distribution partners in North America,
Europe and Asia-Pacific. We are growing our
own specialist teams servicing institutional and
intermediary clients.
Large investment
team
With more than 80 Investment team members in
the US, Europe and Asia-Pacific, we offer solutions
in listed equities, fixed income and private markets.
£37.4bn
Assets under
management
80+
Investment team
members
Contributing to the development of
a sustainable society
Sustainability is integral to our mission. We aspire
to run our business in line with best practices of
governance, we focus on equity, diversity and
inclusion and aim to minimise our environmental
footprint. We value our commitment to community
partners who we support both financially and
through volunteering opportunities.
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Impax Asset Management Group plc
Our Philosophy
We provide high-quality
investment solutions
for institutional and
individual investors
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.
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.
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.
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 offer
a suite of investment solutions
spanning multiple asset classes,
aiming to deliver superior
risk-adjusted returns over the
medium to long term.
Annual Report and Accounts 2023
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Mission and Values
“ Investing in the transition to
a more sustainable economy.”
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.
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.
Our Values
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.
Be the
solution
A passion for
excellence
Building a
common
future
Our
Values
Doing better
together
All voices
valued
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.
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.
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.
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.
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Impax Asset Management Group plc
Where we operate
We have successful relationships with distribution partners
in North America, Latin America, Europe and Asia-Pacific.
We are growing our own specialist teams servicing institutional
and intermediary clients.
LATIN AMERICA
CANADA
UNITED STATES
ASIA-PACIFIC
Distribution partner
Distribution partners
Impax branded
Distribution partners
Impax Fund Vehicles1
Impax Commingled
Vehicles
EUROPE
Distribution partners
Distributed directly
by Impax
1
Impax Funds are distributed by Foreside
Financial Services, LLC. Foreside Financial
Services, LLC is not affiliated with Impax
Asset Management LLC.
Annual Report and Accounts 2023
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Industry-wide recognition
We are committed to delivering superior, risk-adjusted returns while
helping our clients invest in the transition to a more sustainable economy.
This has been recognised through a range of industry awards.
Winner
Winner
Winner
Investment Manager
of the Year
Responsible Investor
of the Year
Gender Equity
Investment Award
European Pensions
Awards
Reuters Responsible
Business Awards
Responsible Investor
USA
2023
2023
2023
Winner
ESG Manager of the
Year
Financial News,
Excellence in
Institutional Fund
Management Awards
2022
Winner
Winner
Listed Equities
Manager of the Year
Environmental
Finance, Sustainable
Investment Awards
2022
Best Sustainable
Fund Management
Group of the Year
(AUM under £50bn)
Investment Week,
Sustainable
Investment Awards
2022
Winner
Winner
Best Asset Manager
in Sustainable
Investing
Morningstar Awards
for Investing
Excellence
2022
Active Manager of the
Year
Pensions Age Awards
2022
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Impax Asset Management Group plc
Strategic
Report
12
20
22
26
30
Chief Executive’s Report
Key Performance Indicators
Financial Review
Our Strategic Priorities
Our Investment Strategies and Performance
Beyond Financial Returns
Our People
Equity, Diversity & Inclusion
Impax in the Community
Climate-related Disclosures
64
Risk Management and Control
88
Engaging with our Stakeholders
92
42
52
55
61
Annual Report and Accounts 2023
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“ I am highly encouraged
that our client retention
has been excellent.”
Ian Simm
Chief Executive
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Impax Asset Management Group plc
Chief Executive’s Report
“ We continue to build strong, long-term
relationships with clients.”
BUSINESS UPDATE
Impax has delivered creditable results during a year that
presented challenging investment conditions. Over the
12 months ending 30 September 2023 (“the Period”),
the Company’s assets under discretionary and advisory
management (“AUM”) increased by 4.8% to £37.4 billion,
driven by investment returns and strong client retention.
4.8%
AUM increase
New
office
opened
in Tokyo
Ian Simm
Chief Executive
Annual Report and Accounts 2023
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Despite a challenging external
environment for the asset
management industry, the
Company was able to expand
revenue by £3.0 million to
£178.4 million. Nevertheless,
operating costs also rose as we
invested in our distribution and
investment capabilities, technology
and operations to ensure that the
business is resilient and scalable,
and hence adjusted operating
profit decreased to £58.1 million
(2022: £67.4 million).
As set out below, we continue
to build strong, long-term
relationships with clients and
to expand our new capabilities,
such as in fixed income. Our
long-term investment approach,
which focuses on companies with
robust business models that are
well placed to benefit from the
transition to a more sustainable
economy, continues to appeal
to a growing segment of the
investment community, and, when
market sentiment improves, we
believe that the Company will be
well positioned for further growth.
CHALLENGING EXTERNAL
ENVIRONMENT
Global equities markets returned
to positive territory over the
Period, following a torrid prior
Period for investors. While
the headline performance of
wider equities markets has
been encouraging, continued
challenges and upheavals in the
macroeconomic environment
have created a volatile investment
backdrop, with higher inflation
and interest rates impacting the
real economy.
The public release of OpenAI’s
ChatGPT in November 2022
sparked huge public excitement
about the potential for artificial
intelligence. This was exemplified
by the meteoric rise in the share
price of chipmaker Nvidia, one of a
narrow range of technology stocks
that has contributed significantly
to the rise in global equities indices
over the Period.
In other areas of the economy
sentiment has been more fragile,
contributing to a cyclical derating
of Impax’s major investment
portfolios. Smaller and mid-cap
companies in particular have
faced challenges in the form of the
higher costs of borrowing
and supply chain issues.
Additionally, post-pandemic
inventory destocking has
temporarily disrupted the demand
for goods across several sectors
that our investment strategies have
long-term exposure to, including
nutritional ingredients, life sciences
tools and solar energy.
This uncertain backdrop and
the impact of higher rates has
led many investors to delay
investment decisions, preferring to
benefit from the positive returns
currently available in cash.
Meanwhile, policy support has
benefitted many of the companies
held in our portfolios. In the
US the Inflation Reduction Act
and the CHIPS and Science Act
have made available a combined
US$420 billion via the provision
of subsidies and tax breaks into
clean energy deployment and
manufacturing. The Infrastructure
Investment and Jobs Act is set to
provide a further US$550 billion
over the next five years.
The US government’s heavy skew
towards encouraging domestic
job creation and its success in
attracting multinationals to direct
their investment into the US, has
led to equivalent climate-related
initiatives, including the EU’s Green
Deal Industrial Plan and similar
measures in China and India.
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Impax Asset Management Group plc
Chief Executive’s Report continued
Longer term, nine out of twelve of
our active strategies, accounting
for a combined 86% of AUM have
outperformed their benchmarks
over the five years to 30 September
2023, with three out of thirteen
outperforming over three years.
A detailed insight into our
investment performance is
included on pages 30-41.
NET FLOWS
The Company experienced
modest net outflows of £92 million
over the Period, demonstrating
the benefits of our increasingly
diversified distribution strategy
and product range and the
strength of our existing
client relationships.
Redemptions from our
Environmental Markets strategies
were largely offset by inflows into
our Sustainability Lens strategies.
Amid challenging market
conditions, our Environmental
Markets strategies saw total net
outflows of £1.7 billion. A high
portion of the outflows came via
redemptions from our distribution
partners, including from BNP
Paribas Asset Management
(“BNPP AM”), our most significant
channel for this range of thematic
strategies. Overall, the proportion
of Impax’s annual revenues
from the BNPP AM range of
SICAV mutual funds fell to 28%,
compared to 30% in the previous
financial year.
MOVEMENTS IN THE COMPANY’S AUM FOR THE FULL YEAR ENDED
30 SEPTEMBER 2023
Total AUM at 30 September 2022
33,801
1,354
Net flows
Market movement, FX and
performance
(144)
1,896
2
(73)
Listed
equities
£m
Fixed
income
£m
Private
markets
£m
Total firm
£m
35,676
(92)
521
49
(6)
1,816
Total AUM at 30 September 2023
35,552
1,283
564
37,399
In the UK the government’s
decision after the Period to wind
back key net-zero policies was
disappointing. While it brings the
UK in line with other countries
(for example, the shift to 2035
from 2030 for the ban of the sale
of new petrol and diesel cars),
the announcement inevitably
sends a negative signal about the
UK government’s commitment
to investing in the transition to a
low-carbon economy. The direct
impact of this announcement
on Impax is limited. 78% of the
Company’s AUM is from outside
the UK and approximately 93%
of our investment assets are
outside the UK.
INVESTMENT PERFORMANCE
During the Period, the
performance of MSCI ACWI,
the benchmark index for many
of our listed equities strategies,
was driven particularly by strong
returns from certain US-listed
large-cap stocks, particularly the
‘mega-cap’ technology stocks
referred to above.
Many of our strategies, particularly
in our thematic listed equities
Environmental Markets range, have
a lower exposure to this sector, so
while our strategies on the whole
saw positive absolute returns, the
market cap and sector bias meant
that the majority underperformed
their respective benchmarks
during the 12-month Period.
Annual Report and Accounts 2023
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Overall, our Sustainability Lens
strategies saw net inflows of
£1.6 billion over the Period. Global
Opportunities consolidated its
position as our largest strategy
at £9.2 billion, with net inflows
of £1.0 billion, including a large
contribution from UK-based St
James’s Place, and via Formuepleje
in Denmark and Desjardins in
Canada. The US Large Cap
strategy registered net inflows
of £700 million, supported by
subscriptions via Lombard Odier
and a significant segregated
mandate from a Japanese pension
fund, awarded in October 2022.
CLIENT SERVICE AND BUSINESS
DEVELOPMENT
We continued to expand
our international footprint,
strengthening our own direct
distribution capabilities and
consolidating our partner
relationships. Highlights included
expanding our distribution
resources in Japan, Australia, the
Nordics, Latin America, the US
and Canada.
Meanwhile we are focused
on providing an outstanding
service to our clients. During the
Period we engaged a third-party
organisation to carry out our first
client survey, with 90% of clients
reporting a positive view of Impax.
In March we opened a new office
in Japan, following our selection
by the Tokyo Metropolitan
Government to receive a Green
Finance Subsidy. We have hired
a senior Country Head to lead
our growth in Japan, which has
a sophisticated asset owner
community with a considerable
interest in the investable
opportunities relating to the
transition to a more sustainable
economy, and where Impax has
managed client money since 2008.
In Australia, after the Period
end, we launched a second fund
targeting the wholesale market
in collaboration with our local
distributor, Fidante Partners.
In June 2023 we signed a
distribution agreement to bring
our services to clients in Latin
America. São Paolo-based BTG
Pactual, Latin America’s largest
investment bank, will distribute
our range of Irish-domiciled UCITS
funds, marking the first time that
we have actively targeted clients in
this region.
In the US, we increased the
availability of the Impax mutual
fund range on several of the
largest wealth management
platforms and are now able to
offer the investment strategies
underlying these funds both
as collective investment trusts
(“CITs”) and separately managed
accounts (“SMAs”). After the
end of the Period, we engaged a
client-introducing representative in
Canada, a market where we have
enjoyed considerable success for
over a decade with support from
our US offices.
Our team investing in privately
held companies operating in
the renewable power sector has
continued to raise capital for our
fourth fund, which at final close
in January 2024 will be Impax’s
largest private markets fund to
date. During the Period the team
made nine new investments from
this fund across five technologies,
including solar PV, energy
efficiency and decentralised
generation, and completed two
exits from the portfolio of our
third fund.
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Impax Asset Management Group plc
Chief Executive’s Report continued
Within Listed Equities, we
launched a new Sustainable
Infrastructure product in October
2022, and we plan shortly to add
our US Environmental Leaders
strategy to our Ireland-based
UCITS range and will soon launch
a strategy targeting Social themes.
We plan to launch a Global
Emerging Markets listed equities
strategy using our Sustainability
Lens during 2024.
IMPAX SUSTAINABILITY CENTRE
Since the late 1990s, Impax has
built up expertise across a range
of topics and activities linked
to investing in the transition to
a more sustainable economy,
for example long-term market
assessment, engagement with
investee companies, impact
reporting and policy advocacy.
PRODUCT DEVELOPMENT
Over the Period we made
good progress in developing
and launching new products,
continuing to both diversify our
range and provide additional
solutions in line with the needs
of our clients.
We have identified a particular
opportunity within fixed income.
Since these markets are earlier
in their adoption of sustainability
considerations than listed equities,
we believe that Impax is well
placed to develop additional
strategies beyond our current
offerings in US Investment Grade
and US High Yield. We have
recently hired four professionals
into our Fixed Income team,
and, last month, completed the
recruitment of an experienced
executive to head up our
investment work and business
development in this asset class.
In addition, we are reviewing
opportunities to source additional
fixed income capabilities, and will
provide an update in due course.
“ We are reviewing opportunities
to source additional fixed
income capabilities.”
In order to ensure that our
resources in these areas add even
greater value to our clients, are
efficiently managed, accessible to
others and scalable, we recently
launched the Impax Sustainability
Centre, which brings together our
Sustainability & Stewardship and
Policy & Advocacy teams.
As an example of the synergies
from this initiative, we have
recently started combining
company engagement and our
policy advocacy activities, seeking
to shape company practices
through regulatory or policy
change and focusing our activities
on four pillars: climate, nature,
people and governance.
We have continued to advance
our proprietary impact reporting.
This includes introducing a new
metric this year for quantifying
the positive impacts associated
with investee companies that
supply consumers with healthy
and nutritious food. We are also
developing metrics related to
social impact and biodiversity.
We continue to provide research
and insights to our clients and
partners. This year we supported
a report by researchers from
Imperial College London to
identify corporate activity that
has delivered positive outcomes
for companies and nature, and
we produced a three-part series
of articles examining the US
energy transition.
Annual Report and Accounts 2023
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ATTRACTING AND DEVELOPING
OUR TALENT
In our employee engagement
survey this year, 97% of our
colleagues told us that they feel
closely aligned to Impax’s mission,
culture and values, with its clear
focus on sustainable development.
SYSTEMS, INFRASTRUCTURE
AND COST EFFICIENCY
To increase our operational
resilience as the business
expands, we have continued
to invest selectively in systems,
infrastructure, risk management
and compliance capabilities.
During the Period we moved
our customer relationship
management system to Salesforce
in order to establish a scalable
platform for client relations. We
have also extended our data
management capabilities and
automated some processes within
the middle office. Finally, we
implemented a new HR system
to support recruitment, talent
development and performance
evaluation and to assist in the
management of personal data.
Given the sustained bearish
sentiment in equities, we have
been particularly focused on the
effectiveness of our operations,
examining each area of our work
and launching a wide range of
initiatives to improve efficiency.
As well as supporting Impax’s
current profitability, we believe
that this work will help significantly
in positioning the Company
for scalable growth over the
medium term.
Our overall engagement score,
which reflects employee’s
satisfaction and commitment,
rose 1 point to 90%, with Impax
once again being rated as a
‘5-star employer’ by WorkBuzz,
the survey organiser. At 10%, our
staff turnover remains low relative
to peers.
Over the Period we sharply
reduced our headcount
expansion, up 10% (compared
to 26% in 2022),¹ and, mindful of
market conditions, have already
slowed this further in the new
financial year.
As described on page 28, we rolled
out a new remuneration framework
across the Company and now
provide clearer guidance and
consistency around how we assess
performance through scorecards
and performance evaluation
in appraisals.
Having made good progress
against our equity, diversity and
inclusion (“E,D&I”) strategy in
recent years, we have refined our
E,D&I goals and will be monitoring
our progress around this area
as part of our performance
appraisal system.
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CLIMATE AND THE COMMUNITY
We are pleased again this year to
include a report that describes
how we manage climate risks
and opportunities (pages 64-87).
In the next few months we plan
to publish a separate Taskforce
for Climate-related Financial
Disclosures (“TCFD”) Report for
the calendar year 2023, including
information about our strategic
approach and risk management
in this area.
We also significantly expanded our
community activity during 2023,
focusing on charities in education
and skills development for the
green economy. During the Period
we developed new community
partnerships with Country Trust
and Groundwork UK, and launched
the Pax Scholarship programme
supporting students in New
Hampshire. Our colleagues once
again voted that food scarcity
should be our ‘Community Cause
of the Year’ and engaged in a
wide range of volunteering and
fundraising activities in their
local communities.
1 Full-time equivalent.
18
Impax Asset Management Group plc
Chief Executive’s Report continued
AWARDS AND INDUSTRY
RECOGNITION
Impax continues to be recognised
for our leadership within the
investment management industry.
During the Period we were named
‘Investment Manager of the Year’,
by European Pensions Awards;
‘Listed Equities Manager of the
Year’, in the Environmental Finance
Sustainable Investment Awards;
and ‘ESG Manager of the Year’, by
Financial News. We also received
a Morningstar ESG Commitment
Level of ‘Leader’, the highest
ranking for the 108 asset managers
evaluated this year. Impax was one
of four to maintain this Level on
each of the three occasions this
survey has been run.
After the end of the Period, we
were named as ‘Responsible
Investor of the Year’, in the Reuters
Responsible Business Awards and
‘Boutique Manager of the Year’ by
Financial News.
JOE KEEFE
In January 2024, Joe Keefe will
retire as President of Impax
North America, to be succeeded
by Ed Farrington, who will also
retain his position as our Head of
Distribution for North America.
Joe has headed our US-based
team since the acquisition of Pax
World Management in 2018 and
previously led that business since
2005. We have all benefited from
Joe’s expertise and his passion,
kindness and good nature will be
much missed.
OUTLOOK: 25 YEARS ON
This year we have been celebrating
25 years since I founded Impax
Asset Management. The Company
and the markets in which we invest
have certainly come a long way in
that time. For example, in 1998, the
largest wind turbines generated
1MW (vs 16MW today), the price
of solar panels was the equivalent
of around US$7 per watt (versus
around US$0.16 per watt today),
and the most common electric
vehicles were golf buggies!
Ever since we received our first
mandate from the World Bank,
Impax has argued consistently
that, on a finite planet with an
expanding population seeking
ever higher standards of living,
the transition to a more sustainable
economy is practically inevitable.
It is our conviction that this
transition will continue to provide
excellent investment opportunities
for red-blooded capitalists and
ethically motivated investors alike.
Our belief in this investment
thesis is stronger than ever and,
with valuations increasingly
attractive, our investment teams
have identified several compelling
themes that we believe will play
out over the medium to long
term. For example, our launch of
the new Social thematic strategy
underlines the opportunities that
we have identified in addressing
challenges facing global society,
including access to basic needs,
financial inclusion and healthcare
innovation.
Meanwhile the increasing de-
coupling of the global economy
presents opportunities for certain
companies as those sectors
that are identified by national
governments as strategic are
reshored, but also the potential
for heightened risk, for example
through business inefficiency.
As highlighted earlier, artificial
intelligence (“AI”) has attracted
excitement and valid concerns
in equal measure. Many of our
strategies’ holdings are already
deploying AI to help deliver
efficiencies in the context
of a more sustainable global
economy, an area in which we
see considerable potential for
the technology.
“ Our belief in our investment
thesis is stronger than ever.”
Notwithstanding the headwinds
that we have experienced during
2023, I am highly encouraged
that our client retention has been
excellent. Meanwhile, we continue
to develop new investment
capabilities while enhancing our
operating model to ensure that the
business is efficient and scalable,
and, as a result, we believe we’re
well positioned to continue to
deliver value for all stakeholders.
Ian Simm
Chief Executive
28 November 2023
September 2023 saw
the publication of the
recommendations from the
Taskforce on Nature-related
Financial Disclosures (“TNFD”).
Impax has long considered nature
within our Environmental Markets
strategies and we expect to
assess the risks and opportunities
related to biodiversity loss over
the coming months, including
through the work of the Impax
Sustainability Centre.
Finally, in its first ‘Synthesis Report’
in nine years, in March 2023
the Intergovernmental Panel on
Climate Change (“IPCC”) said that
there is a more than a 50% chance
that global temperature rise will
reach or surpass 1.5˚C between
2021 and 2040. The need for
accelerated investment in climate
solutions and addressing physical
climate risks has never been more
acute, presenting considerable
opportunities for investors. With
a 25-year heritage of specialising
in investing in climate solutions,
Impax is ideally placed to support
asset owners as they decide on
how best to allocate to this meta-
trend reshaping society.
Annual Report and Accounts 2023
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Impax Asset Management Group plc
Key Performance Indicators
We use a number of key performance indicators (“KPIs”)
to measure our financial performance.
AUM1
£37.4bn
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 net
subscriptions, client retention and investment performance. It also provides a
good lead indicator of revenue and profitability.
2023: AUM was up by 4.8%
to £37.4 billion.
2023
2022
2021
2020
2019
£37.4bn
£35.7bn
£37.2bn
£20.2bn
£15.1bn
Revenue
£178.4m
Revenue represents the fees we have earned for services
provided in the year.
2023: Revenue grew by 1.7%
to £178.4 million.
2023
2022
2021
2020
2019
£178.4m
£175.4 m
£143.1 m
£87.5m
£73.7m
Adjusted operating profit2
£58.1m
Adjusted operating profit reflects the performance of our core business. It
takes into account investments in our infrastructure to support longer term
growth and how we reward and retain our staff.
2023: Adjusted operating profit fell
by 13.8% to £58.1 million.
2023
2022
2021
2020
2019
£23.3m
£18.0m
£58.1m
£67.4m
£55.8m
1 Assets under management and advice as at 30 September 2023. Assets under advice represent c. 3% of total AUM.
2 This is an Alternative Performance Measure – see page 213 for definition and calculation.
3 Proposed.
Annual Report and Accounts 2023
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Adjusted operating margin2
32.6%
Adjusted operating margin is a profitability ratio that shows how much profit
we make in relation to our total revenue and has been impacted by the
investment in our infrastructure in the Period.
2023: Adjusted operating margin
was down to 32.6%.
2023
2022
2021
2020
2019
32.6%
38.4%
39. 0%
26.6%
24.4 %
Adjusted diluted earnings per share2
35.2p
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.
2023: Adjusted diluted EPS fell
to 35.2 pence.
2023
2022
2021
2020
2019
14.5 p
11.5p
35.2p
34.4p
42.1 p
Dividend3
27.6p
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 the total dividend per share to 27.6 pence. This represents a flat
total dividend relative to the 2022 payout.
2023: Total dividend kept flat
at 27.6 pence.
2023
2022
2021
2020
2019
8.6p
5.5p
27.6p
27.6p
20.6 p
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Impax Asset Management Group plc
Financial Review
“ We have maintained a strong
financial position in challenging
markets whilst building a scalable
business ready for future growth.”
I am pleased to present our results for the year which, in
a time of challenging market conditions, demonstrate the
resilient nature of the Company which has allowed for
continued investment in our growth strategy.
£178.4m
Revenue earned
during the Period
Karen
Cockburn
Chief Financial
Officer
£87.7m
of Cash Reserves
Annual Report and Accounts 2023
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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 of
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.
Further information on the
adjustments made and on the
other alternative performance
measures reported is provided on
page 213. A reconciliation of the
International Financial Reporting
Standards (“IFRS”) and adjusted
numbers is provided in note 4 of
the financial statements.
FINANCIAL HIGHLIGHTS FOR FINANCIAL YEAR 2023 VERSUS
FINANCIAL YEAR 2022
AUM1
Revenue
Adjusted operating costs
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
2023
£37.4bn
£178.4m
£120.3m
£58.1m
£60.0m
35.2p
£87.7m
£13.3m
2022
£35.7bn
£175.4m
£108.0m
£67.4m
£68.4m
42.1p
£107.0m
£7.3m
4.7p interim
+ 22.9p final
4.7p interim
+ 22.9p final
2023
£54.2m
£52.1m
29.8p
2022
£65.2m
£72.6m
44.7p
1 Assets under management and advice as of 30 September 2023.
2 This is an Alternative Performance Measure – see page 213 for definition and calculation.
3 Proposed.
REVENUE
Revenue for the Period increased
by £3.0 million to £178.4 million
(2022: £175.4 million) as a result of
the growth in AUM driven by £1.8
billion of market movements and
investment performance during
the Period.
At the end of the Period, the
weighted average run-rate revenue
margin was 45 basis points
(2022: 46 basis points) on the
£37.4 billion of AUM. Our run-rate
revenue1, also based on the Period
end AUM, rose to £168.8 million
(2022: £166.2 million).
OPERATING COSTS
Adjusted operating costs
increased to £120.3 million
(2022: £108.0 million) as we
continued to invest strategically
in the business to support our
long-term growth ambitions.
Being mindful of the challenging
market conditions and economic
uncertainty that remains, we
have focused our investment in
the areas of people, technology
and operations that will ensure
we build a scalable and resilient
business that is well prepared
for future growth.
These costs also reflect a full
year of costs from hires made in
FY2022.
IFRS operating costs include
additional charges and credits,
principally the amortisation of
intangible assets and equity
incentive scheme charges arising
on the acquisition of Impax NH as
well as national insurance charges
and credits on share options and
restricted shares which is payable
based on the share price when an
option is exercised or restricted
shares vest.
1 This is an Alternative Performance Measure – see page 213 for definition and calculation.
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Impax Asset Management Group plc
Financial Review continued
PROFITS AND OPERATING
MARGINS
Adjusted operating profit
decreased to £58.1 million
(2022: £67.4 million) owing to
the increased operating costs
discussed above offset in part by
the increase in revenue. As a result,
adjusted operating profit margin
reduced to 32.6% (2022: 38.4%).
Run-rate adjusted operating profit
at the end of the Period was
£51.9 million (2022: £54.3 million)
and run-rate adjusted operating
margin at the end of the Period
was 30.8% (2022: 32.6%).
Adjusted profit before tax of
£60.0 million (2022: £68.4 million)
and adjusted diluted earnings per
share of 35.2 pence (2022: 42.1
pence) include net finance income
of £1.9 million (£0.9 million).
IFRS operating profit for the
Period decreased to £54.2 million
(2022: £65.2 million) reflecting the
increased operating costs. IFRS
profit before tax of £52.1 million
(2022: £72.6m) includes foreign
exchange losses of £4.0 million
(2022: foreign exchange gains of
£6.4 million) on the retranslation
of monetary assets held in foreign
currencies that are not linked to
the operating performance of the
Group.
£1.2 million of this loss relates to
the retranslation of a US Dollar
denominated loan between
the Parent Company and a US
subsidiary. A corresponding gain
is recognised in equity in the
exchange translation reserve.
IFRS diluted earnings per
share decreased to 29.8 pence
(2022: 44.7 pence).
TAX
The effective tax rate has
increased due to an increase in the
main corporation tax rate in the UK
from 19% to 25% from 1 April 2023.
As such, a blended rate of 22%
has been applied for the Period
(2022: 19%).
FINANCIAL MANAGEMENT
The Company continues to be a
strongly cash generative business
with high levels of cash and
no debt. At the Period end the
Company held £87.7 million of cash
resources (2022: £107.0 million).
The decrease of £19.3 million from
2022 is mainly attributable to
further seed investments and share
purchases made during the Period.
During the Period, we made seed
investments, net of redemptions,
of £5.3 million in our listed equity
and private equity funds (2022: net
redemptions of £0.3 million) and at
the Period end these investments
were valued at £13.3 million
(2022: £7.3 million).
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 Trusts
(“EBTs”) (subject to the trustees’
discretion), using funding provided
by the Company.
During the Period, the EBT
purchased 2.1 million ordinary
shares. The EBT holds shares for
Restricted Share awards until
they vest or to satisfy share
option exercises.
At the Period end the EBTs held
a total of 4.3 million shares, 2.7
million of which were held for
Restricted Share awards leaving up
to 1.6 million available for option
exercises and future share awards.
There were 2.0 million options
outstanding at the Period end, of
which none were exercisable.
Annual Report and Accounts 2023
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DIVIDENDS
The Company paid an interim
dividend of 4.7 pence per share in
July 2023. Our dividend policy is
to pay, in normal circumstances, an
annual dividend between 55% and
80% of adjusted profit after tax. As
described above, despite uncertain
markets, business performance
was stable during the Period and
the Company remains in good
financial health. The Board has
therefore decided to recommend
a final dividend of 22.9 pence
(2022: 22.9 pence) taking the total
dividend for 2023 to 27.6 pence
(2022: 27.6 pence). The total
dividend for the year represents
78% of our adjusted profit.
This dividend proposal will be
submitted for formal approval
by shareholders at the Annual
General Meeting on 12 March
2024. If approved, the dividend
will be paid on or around 22
March 2024. The record date for
the payment of the proposed
dividend will be 9 February 2024
and the ex-dividend date will be
8 February 2024.
The Company operates a dividend
reinvestment plan (“DRIP”). The
final date for receipt of elections
under the DRIP will be 23 February
2024. 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 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).
The Directors therefore have a
reasonable expectation that the
Group has adequate resources to
remain in operational existence for
the foreseeable future and have
continued to adopt the going
concern basis in preparing the
financial statements.
Karen Cockburn
Chief Financial Officer
28 November 2023
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Impax Asset Management Group plc
Our Strategic Priorities
We made significant progress against our eight
strategic priorities over the Period. Here we provide
a snapshot of some of the highlights:
Deliver superior,
risk-adjusted
investment returns
Widen and
deepen distribution
channels
The Period presented challenging investment
conditions, with Investment performance
mixed for our actively managed strategies.
Highlights included expanding our distribution
resources in Japan, North America, Australia,
the Nordics and Latin America.
While many of our active strategies saw
positive absolute returns, for the 12-month
Period three out of 14 were ahead of their
respective benchmarks.
We opened a new office in Japan, following
our selection by the Tokyo Metropolitan
Government to receive a Green Finance
Subsidy.
Longer term, nine out of 12 of our larger
strategies, accounting for a combined 86% of
AUM have outperformed their benchmarks
over the five years to 30 September 2023, with
three out of 13 outperforming over three years.
86%
of AUM has outperformed
over five years
We signed a distribution agreement with BTG
Pactual to target clients in Latin America.
In the US, we increased the availability of the
Impax mutual fund range on several of the
largest wealth management platforms and are
now able to offer the investment strategies
underlying these funds both as collective
investment trusts (“CITs”) and separately
managed accounts (“SMAs”).
After the end of the Period, we engaged a
client-introducing representative in Canada,
a market where we have enjoyed considerable
success for over a decade with support from
our US offices.
Annual Report and Accounts 2023
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Optimise existing
and selectively
launch new strategies
Within Listed Equities, we launched a new
Sustainable Infrastructure (active) strategy
in October 2022.
After the Period end, we plan shortly to add
our US Environmental Leaders strategy to
our Ireland-based UCITS range and will soon
launch a strategy targeting Social themes.
We developed and plan to launch a Global
Emerging Markets listed equities strategy using
our Sustainability Lens in 2024.
We have identified a particular opportunity
within fixed income. We have recently hired
four professionals into our Fixed Income
team, and, after the Period end, recruited
an experienced executive to head up our
investment work and business development in
this asset class. We are reviewing opportunities
to source additional fixed income capabilities,
and will provide an update in due course.
Enhance client
experience beyond
investment returns
We have continued to advance our proprietary
impact reporting. This includes introducing
a new metric this year for quantifying the
positive impacts associated with investee
companies that supply consumers with
healthy and nutritious food. We are also
developing metrics related to social impact
and biodiversity.
We engaged a third-party organisation to carry
out our first client survey, with 90% of clients
reporting a positive view of Impax.
After the Period end we launched the Impax
Sustainability Centre, which brings together
our Sustainability & Stewardship and Policy
& Advocacy teams to focus the Company’s
extensive resources in this area.
90%
of clients report a positive
view of Impax
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Impax Asset Management Group plc
Our Strategic Priorities continued
Attract and develop
an outstanding team
Our overall engagement score, which reflects
employee’s satisfaction and commitment, rose
one point to 90%, with Impax once again being
rated as a ‘5-star employer’ by WorkBuzz, the
survey organiser.
At 10%, our staff turnover remains low relative
to peers.
We rolled out a new remuneration framework
across the Company and now provide clearer
guidance and consistency around how we
assess performance through scorecards and
performance evaluation in appraisals.
We have refined our E,D&I goals for end of
2027 and will be monitoring our progress
around this area as part of our performance
appraisal system.
At year end, 47% of employees are women,
close to our 2025 target of 48-52%; 25%
of employees are minority ethnic. 54% of
promotions and 49% of new hires during the
Period were women. 23% of promotions and
25% of new hires were minority ethnic.
Increase operational
scalability and
efficiency
We significantly moderated the expansion
of our headcount, up 10% (compared to 26%
in 2022), and, mindful of market conditions,
have already slowed this further in the new
financial year.
We moved our customer relationship
management system to Salesforce in order to
establish a scalable platform for client relations.
We extended our data management
capabilities and automated some processes
within the middle office.
We implemented a new HR system to
support recruitment, talent development and
performance evaluation and to assist in the
management of personal data.
Given the sustained bearish sentiment in
equities, we have been particularly focused
on the efficiency and effectiveness of our
cost base, examining each area of our work
and launching a wide range of initiatives
to improve efficiencies.
As well as supporting Impax’s current
profitability, we believe that this work will help
significantly in positioning the Company for
scalable growth over the medium term.
Annual Report and Accounts 2023
29
Build insights and
advocacy around
transition to a more
sustainable economy
We have recently started combining company
engagement and our policy advocacy
activities, seeking to shape company practices
through regulatory or policy change and
focusing our activities on four pillars: climate,
nature, people and governance.
We also continue to provide research and
insights to our clients and partners. This year
we supported a report by researchers from
Imperial College London to identify corporate
activity that has delivered positive outcomes
for companies and nature, and we produced a
three-part series of articles examining the US
energy transition.
We have significantly expanded our
community activity during 2023, focusing on
charities in education and skills development
for the green economy, donating £504,933
(2022: £287,382).
Deliver excellent
financials and
sustainable
stakeholder value
Revenue for the Period increased by
£3.0 million to £178.4 million.
AUM up by 4.8% to £37.4 billion: £1.8 billion
of market movements and investment
performance and offset in part by £92 million
of net outflows.
We have strategically invested in the business
to support our growth ambitions which has
seen our adjusted operating profits fall by
13.8% to £58.1 million.
Adjusted operating margin was down to 32.6%.
Adjusted diluted EPS fell to 35.2 pence.
Total dividend for the Period flat compared
to 2022.
£178.4m
of revenue for the Period
increased by £3.0 million
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Impax Asset Management Group plc
Our Investment Strategies
and Performance
At Impax, every investment strategy is designed
to intentionally allocate clients’ capital towards a
more sustainable economy.
Environmental
Markets
Sustainability
Lens
Our strong conviction is
that population dynamics,
resource scarcity, inadequate
infrastructure and
environmental constraints
will create high investment
opportunities.
The Impax Sustainability Lens translates our investment
beliefs into a practical investment tool to help our teams
identify the winners and avoid the losers in the transition
to a more sustainable economy.
ACTIVE EQUITIES
Specialists
ACTIVE EQUITIES
Global Opportunities
FIXED INCOME
Core Bond
2002
Leaders
2008
Asian Environmental
2009
Water
2009
Sustainable Food
2012
Climate
2018
US Environmental Leaders
2019
2015
High Yield
1999
2015
US Large Cap
2016
US Small Cap
2008
Asian Opportunities
2021
SYSTEMATIC EQUITIES
US Sustainable
Economy
1997
International
Sustainable Economy
2011
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Sustainable
Infrastructure
Gender
Lens
Multi-Asset
A risk-focused asset allocation
strategy offering a diversified
portfolio of Impax strategies
invested in the transition to a
more sustainable economy.
As a pioneer in gender lens
investing, we invest in the
highest-rated companies in the
world for advancing women
through gender-diverse
boards, senior leadership
teams and other policies and
practices.
SYSTEMATIC EQUITIES
Global Women’s
Leadership
2006
SUSTAINABLE ALLOCATION
Sustainable Allocation
1971
As one of the longest
established fund managers in
the large and rapidly growing
renewable energy sector, we
manage strategies that follow
an industrially-focused value-
add strategy, investing in
renewable power generation
and related assets.
PRIVATE MARKETS
New Energy
2005
SYSTEMATIC EQUITIES
Sustainable Infrastructure
(Systematic)
2021
ACTIVE EQUITIES
Sustainable Infrastructure
(Active)
2022
32
Impax Asset Management Group plc
Our Investment Strategies and Performance continued
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 Investments, who has been
at Impax for over two decades.
This team manages active
strategies within Environmental
Markets, Gender Lens and
Sustainability Lens and Sustainable
Infrastructure. Members of the
team also manage Impax’s
Systematic Equities strategies.
Fixed income
Impax’s fixed income strategies,
which use the Impax Sustainability
Lens and are managed by a US-
based team of portfolio managers
and credit analysts. The team
is led by Ross Pamphilon. 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 strategy
International Sustainable
Economy 2%
Other 8%
Global Women’s Leadership 2%
Leaders 18%
Core Bond 2%
US Large Cap 5%
Global Opportunities 25%
Water 16%
Specialists 8%
Sustainable Food 3%
Asian Environmental 3%
Climate 8%
In the pie chart above, the blues represent Environmental Markets and the oranges
Sustainability Lens.
AUM by range
Environmental
Markets
Sustainability
Lens
35%
30%
Other
6%
6%
59%
64%
FY 2023
FY 2022
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Environmental Markets strategies
Our thematic Environmental
Markets strategies invest in
companies that address long-term
macroeconomic themes including
growing populations, increasing
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 34, our
Environmental Markets strategies,
with the exception of Water,
underperformed their respective
benchmarks during the Period.
While the overall performance
of global equities has been
positive, continued challenges and
upheavals in the macroeconomic
environment have created a
volatile investment backdrop,
with higher inflation and interest
rates impacting the real economy.
Rising interest rates – themselves
a response by central banks
to concerns about inflationary
pressure – have the effect of
lowering the value that investors
place today on prospective future
cash flows. Many of the smaller
and mid-cap stocks held in
these strategies have also faced
challenges in the form of higher
costs of borrowing and supply
chain issues. Additionally, post-
pandemic inventory destocking
has temporarily suppressed
demand for goods across several
sectors that these strategies have
long-term exposure to, including
nutritional ingredients, life sciences
tools and solar energy.
Against this backdrop, we are
closely monitoring the quality
of Company earnings to ensure
long-term drivers of growth
remain intact. Overall, we expect
the long-term earnings growth
of sustainable and environmental
markets to outperform the
broader market.
34
Impax Asset Management Group plc
Our Investment Strategies and Performance continued
Environmental Markets strategies continued
In challenging market conditions,
net outflows across our
Environmental Markets strategies
totalled £1.7bn. A high portion
of net outflows came via
redemptions from our distribution
partners, including BNPP Asset
Management.
Despite net outflows of £1.1bn, our
Leaders strategy - which invests in
companies developing innovative
solutions to resource challenges in
environmental markets – remains
our largest Environmental Markets
strategy by AUM (£6.7bn). Leaders
continues to have outperformed
the MSCI ACWI index over
the five-year period ending
30 September 2023, as has
Specialists. Specialists 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.
We continued to attract net
inflows during the Period into
two of our Environmental Markets
strategies: Climate (£124 million)
and Water (£35 million). The
latter, which invests in companies
across the water value chain,
has outperformed over one,
three and five years ending
30 September 2023.
Percentage returns for one, three and five years for environmental
markets strategies versus benchmark1 (GBP)
Leaders3
Water
Specialists
Climate
Sustainable Food
MSCI ACWI Index2
AUM
£6.7 billion
£6.1 billion
1YR
9.0%
11.1%
£3.1 billion
-0.6%
£2.8 billion
£1.0 billion
1.0%
1.1%
3YR
20.1%
35.5%
20.8%
16.1%
10.2%
10.5%
29.4%
1YR
-1.2%
4.7%
3YR
2.3%
3.8%
5YR
49.8%
65.2%
50.3%
53.5%
21.7%
46.1%
5YR
30.9%
15.1%
£290 million
9.3%
10.7%
36.7%
37.3%
n/a
n/a
Asian Environmental
£1.3 billion
AUM
MSCI Asia Composite
Index2
US Environmental
Leaders
MSCI USA Index2
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 2023. 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 monthly.
3 A hybrid account is not included in the Total AUM of this strategy and the AUM of this account is £784
million. 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.
Annual Report and Accounts 2023
35
Sustainability Lens strategies
which invests in US stocks within
the Sustainability Lens universe,
has also continued to grow. With
inflows led by a significant mandate
from a Japanese pension fund, the
strategy’s AUM reached £1.9 billion
at the end of the Period.
Fixed income
Impax’s fixed income strategies
also use the Sustainability Lens
to identify higher opportunity
and lower risk sub-sectors in their
investment universes.
Our largest fixed income strategy
by AUM, Core Bond, 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.
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
Our Sustainability Lens listed
equities strategies proved relatively
more resilient during the Period, in
terms of both relative investment
performance and net client flows.
Global Opportunities, launched
in January 2015, is our largest
strategy by AUM (£9.2 billion).
Although it slightly underperformed
over one and three-year periods,
it has outperformed the MSCI
ACWI index by 18.6 percentage
points over the five-year period
ending 30 September 2023. Net
inflows during the Period totalled
£1.0 billion, including a large
contribution from UK-based St
James’s Place, which has selected
the strategy for its Sustainable and
Responsible Equity Fund since
2018. The US Large Cap strategy,
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Impax Asset Management Group plc
Our Investment Strategies and Performance continued
Sustainability Lens strategies continued
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
High Yield Bond
ICE BoFA US Cash Pay High Yield Constrained
(BB-B)5
Core Bond
Bloomberg Barclays US Aggregate6
AUM
£9.2 billion
£1.9 billion
£519 million
£512 million
£693 million
1YR
10.0%
10.5%
5.0%
11.2%
1.3%
-0.4%
-0.3%
0.2%
-7.5%
-8.0%
3YR
27.5%
29.4%
37.6%
41.6%
45.3%
30.4%
6.3%
10.0%
-8.1%
-9.8%
5YR
64.7%
46.1%
75.6%
71.4%
35.6%
20.3%
22.8%
23.5%
9.5%
7.4%
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.
‘Responsible’ investment: a problematic term
All of Impax’s investment strategies intentionally align to the transition to a more sustainable economy.
Regulators across the world are attempting to classify which investments should be defined as
‘sustainable’, ‘impact’, ‘responsible’ or ‘green’. We believe that all these terms can be problematic and are
interpreted by market participants in very different ways.
Using the EU’s Sustainable Finance Disclosure Regulation (“SFDR”) as a guide, 60.7%* of Impax’s assets
under management have been classified by Impax as ‘sustainable investments’, in accordance with the
SFDR definition. This includes our listed equities thematic Environmental Markets strategies and our
New Energy strategy.
All our funds marketed into Europe for which an Impax entity acts as the sponsor and management
company, have been classified by Impax as either Article 8 or 9 under the SFDR.
* As at 30 September 2023.
Annual Report and Accounts 2023
37
Systematic equities
Our US Sustainable Economy and International Sustainable Economy
strategies, whose combined AUM totalled £1.1 billion at the end of the
Period, are both informed by the Sustainability Lens. The systematic
process uses filters and analytical insights to optimise portfolio
exposure to higher-opportunity sub-sectors and companies, and
minimise exposure to risks, as the transition to a more sustainable
economy continues.
The largest of these two strategies by AUM (£837 million), International
Sustainable Economy, which invests in non-US developed market stocks,
received net inflows of £98 million.
1 All data in GBP as at 30 September 2023. 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 US 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 US domestic, taxable
and dollar denominated. The index covers the US 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 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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Impax Asset Management Group plc
Our Investment Strategies and Performance continued
Gender Lens
We manage one of the leading
gender-focused strategies in
North America, investing in
companies that advance gender
diversity and equity.
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
promoting and advancing gender
diversity. To construct the index,
our dedicated Gender Analytics
team rates companies on multiple
criteria of gender leadership.
The AUM of our Global Women’s
Leadership strategy stood at
£654 million at the end of the
Period, following net outflows
of £65 million. The Impax Global
Women’s Leadership strategy
underperformed the MSCI World
Index during the Period.
Over the long term, the portfolio’s
commitment to companies that
exhibit gender leadership has been
additive, however this tilt has seen
more volatility in 2023. During
the Period, the financial markets
mixed perspective on stocks that
demonstrate high conviction
gender leadership companies
(gender leaders), as determined
by the Impax Gender Score, was
a headwind to performance. The
lowest rated gender leadership
companies (gender laggards), as
determined Impax Gender Score,
outperformed the World Index,
and the portfolio’s avoidance of a
handful of the lowest rated gender
leadership companies had a large
impact on performance.
Global Social Leaders
strategy
After the Period, we will
shortly launch a new
investment strategy that
focuses on trends shaping
society as the transition to a
more sustainable economy
continues. The Global
Social Leaders portfolio
will be defined using the
Impax Social Taxonomy, a
proprietary framework that
has been developed over
recent years.
Our taxonomy classifies
companies that we believe
are benefitting from long-
term societal secular
trends under three pillars.
The first – meeting basic
needs – captures companies
providing the products and
services that are necessities
for our safety and wellbeing.
The second – broadening
economic participation –
captures companies enabling
education, employment
and financial security. The
third – improving quality of
life – captures companies
supporting health, happiness
and prosperity.
Annual Report and Accounts 2023
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Multi-Asset
Sustainable Infrastructure strategies
Our Multi-Asset strategy offers
investors exposure to the breadth
of Impax’s investment approaches.
The Sustainable Allocation
strategy, whose AUM stood at
£1.7 billion at the end of the
Period, seeks to 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 strategy experienced
a small net outflow of £71 million
over the Period.
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 five years the
Fund sits within the top 30% of
this group.
a weighted average project IRR of
17.0% and project money multiple
of 1.31 to investors.1 Furthermore,
NEF III is preparing to make three
significant exits in the next 12
months including our French and
German wind and solar platforms
and our small-scale hydro platform
in Norway.
Listed equities strategies
Within Listed Equities, we
launched the Sustainable
Infrastructure (active) strategy
in October 2022 after identifying
that decarbonisation, resource
scarcity and pollution, ageing
infrastructure, urbanisation,
digitalisation, and an ageing
population are driving the
requirement for significant
investment in sustainable
infrastructure solutions.
1 Past performance does not predict future
returns. Figures refer to the past and that past
performance is not a reliable indicator of future
results.
Our Sustainable Infrastructure
strategies focus on infrastructure
that will drive the transition to a
more sustainable economy.
Private Markets strategies
The PE/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 January 2024 our fourth fund
in the New Energy Fund Series,
NEF IV, is due to hold its final close
and will become Impax’s largest
private markets fund to date. NEF
IV has made excellent progress
on deployment having made nine
investments, with a further two
in exclusivity. NEF IV has made
investments in seven countries
across five technologies. Examples
include a solar and energy
efficiency investment in Italy
and a decentralised generation
investment in Germany which
includes rooftop solar, battery
storage and smart meters, to
provide just two examples.
The strategy’s third fund, NEF III,
made two successful exits in Spain
during the period selling 76MW
in total from our solar portfolio.
These exits collectively returned
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Impax Asset Management Group plc
Our Investment Strategies and Performance continued
Impax New Energy Investors III portfolio1
Map Key
Battery storage asset
Wind assets in operation
Wind pipeline2
Exited solar assets
Solar pipeline2
Hydro assets in operation
Hydro pipeline2
Development team3
1 As at 30 September 2023.
2
‘Pipeline’ encompasses ready-to-build (“RTB”), late-stage development and
permitted assets as well as the wider pipelines of our existing development
platforms.
"Development team" refers to development partners that Impax funds either own
or with whom they have established a joint venture.
3
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Map Key
Wind
Solar
Decentralised generation
Energy efficiency
Services business
Development team2
1 As at 30 September 2023.
2
"Development team" refers to development partners that Impax funds either own
or with whom they have established a joint venture.
42
Impax Asset Management Group plc
Beyond Financial Returns
At Impax, every strategy is designed to
intentionally allocate clients’ capital towards
those companies which are expected to benefit
as the global economy transitions to a more
sustainable model.
Our impact reporting is a concrete
demonstration of this intention.
Since 2015, we have continued
to evolve and refine our impact
reporting to align with emerging
best practice including reporting
standards where available.
Each year we also report on
our stewardship and advocacy
activities – two of the key levers
that we can pull to influence
change and help address the
systemic risks facing our investee
companies and the real economy.
Stewardship at Impax means
being actively engaged, not
activist investors. We proactively
engage with the companies held
across Impax portfolios and
strategies, often over many years,
encouraging them to adopt best
practices, improve disclosures
and address concerns raised. As a
long-term partner, we help ensure
companies are attuned to the
risks of unsustainable growth and
opportunities presented by the
transition to a more sustainable
economy. Effective engagement
plays a key role in developing a
comprehensive understanding of
the character and quality of our
investee companies – something
of critical importance to the Impax
investment process.
Impax is a proud signatory to the
UK Stewardship Code, which sets
high stewardship standards for
those investing money on behalf
of savers and pensioners, and
those that support them. As a
successful applicant again in 2023,
we demonstrated our commitment
to its principles.
Impax’s Policy Advocacy work is
focused on shaping the markets
and supporting the development
and creation of public policy
which will accelerate the transition
to a more sustainable economy.
Where appropriate, we are
planning to increasingly combine
policy advocacy with company
engagement to accelerate positive
outcomes in the real economy,
so-called systematic engagement,
as described in our recent
Stewardship & Advocacy report.
In response to client demand and
our desire to demonstrate the
authenticity of our investment
activities, Impax clients receive
a tailored ‘Beyond Financial
Returns’ (“BFR”) report each year.
This provides a comprehensive
overview of the stewardship,
sustainability and impact
outcomes for their specific
portfolio of investments managed
by Impax. Each year we seek to
improve reporting by continuing
to increase transparency and to be
sure we reflect the latest industry
guidance, consistent with our firm
level reporting.
After Period end, we launched the
Impax Sustainability Centre, which
brings together our Sustainability
& Stewardship and Policy &
Advocacy teams into a single
centre of excellence, effective from
1 October 2023.
The Sustainability Centre will act
as a central point of expertise
on sustainability issues within
Impax. It will advise and support
both internal teams and external
stakeholders, including our clients,
on four principal areas:
• Investment sustainability and
stewardship
• Advocacy and outreach
• Thought leadership
• Beyond Financial Returns
IMPACT
We believe that our impact
reporting is a concrete
demonstration that our
investment strategies are aligned
to companies that are both
benefitting from, and enabling the
transition to, a more sustainable
economy. Full details are available
in our Impact Report 2023.
Annual Report and Accounts 2023
43
We continue to advance our
proprietary impact reporting
through the development of new
metrics and the refinement of our
methodology to ensure it is robust.
The metrics we report relate to
the environmental and social
impact associated with the
products and services of our
investee companies.
One of our areas of focus this
year has been sustainable food
production. Resource-intensive
food production can have vast
negative environmental impacts,
but the sector plays a vital role
in feeding a growing global
population. We are pleased to
have introduced a new metric
for quantifying the positive
impacts associated with investee
companies that supply consumers
with healthy and nutritious food,
from alternative proteins to fruit
and vegetables.
Work is ongoing to enhance our
reporting of social impact using
meaningful metrics that align
with the Impax Social Taxonomy,
a proprietary framework that
has been developed to classify
companies that we believe
are enabling social inclusion
and development, and where
positive outcomes or impacts
can be measured. One example is
quantifying the number of patients
whose quality of life has been
improved by innovative healthcare
products. Another is the number
of individuals connected digitally
by companies whose services
broaden economic participation.
In parallel, we are also developing
a clearer understanding of the
biodiversity-related impacts of our
investee companies.
Since 2015, Impax has been
measuring the environmental
impacts associated with the
activities of companies held in
our portfolios, including emissions
and avoided emissions. Reporting
on companies’ emissions and
emissions avoidance remains a key
area of focus within our impact
measurement and reporting, as
emissions avoidance is relevant
for many different types of
environmental solutions and is
a very important real-economy
metric assessing the acceleration
of the transition to a low-carbon
economy. Historically, we also
reported a net GHG emissions
and avoidance metric for each
strategy. We now favour reporting
gross GHG metrics – emissions
and avoidance separately. This
approach aligns with the emerging
consensus and guidance that
Scope 1, 2 and 3 GHG emissions
should be separated from avoided
emissions in reporting. Please
see our Climate section on
pages 64-87 for more information.
Additional environmental
impact metrics reported include
renewable energy generated,
water treated, saved or provided,
materials recovered, and waste
treated. On page 44, we report
on the water treated, saved
or provided, and the materials
recovered, and waste treated
through portfolio companies’
activities, for each of our
Environmental Markets strategies,
based on US$10 million invested
for one year.
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 the reporting of GHG
emissions. We continue to make
the case for stronger reporting
of environmental and social
impacts through our engagement
with companies, regulators and
standards-setting bodies. In turn,
we expect this will enable us to
continue improving the breadth
and depth of our impact reporting
to clients over time.
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Impax Asset Management Group plc
Beyond Financial Returns continued
Environmental impact of portfolio companies in 2022
Based on US$10 million invested, companies held in Impax strategies contributed to:
Asian Environmental1
Total materials recovered/
waste treated
Total renewable electricity
generated
Total water provided, saved or
treated
Recovered/
treated
Generated
Provided, saved
or treated
80
tonnes
Equivalent to
300
households’ waste
output
for a year
Climate
Leaders
Specialists
Sustainable
Food
950
tonnes
470
households
1,360
tonnes
670
households
240
tonnes
120
households
420
tonnes
210
households
2,770
MWh
Equivalent to
1,330
households’
electricity
consumption
for a year
1,820
MWh
170
households
530
MWh
50
households
1,280
MWh
120
households
50
MWh
0
households
190
megalitres
Equivalent to
1,390
households’ water
consumption
for a year
600
megalitres
1,450
households
200
megalitres
480
households
200
megalitres
480
households
600
megalitres
1,450
households
There can be no assurance that impact results in the future will be comparable to the results presented herein.
Impax impact calculations are based on strategy AUM and portfolio holdings as at 31 December 2022. Please refer to our Impact Report 2023 for details
including sources for the household equivalencies data used in our calculations.
1 Asian household equivalencies. UK household equivalencies are used for other strategies (refer to our Impact Report 2023 for details).
Annual Report and Accounts 2023
45
Environmental impact of portfolio companies in 2022 (continued)
Based on US$10 million invested, companies held in Impax strategies contributed to:
US Environmental Leaders
Total materials recovered/
waste treated
Total renewable electricity
generated
Total water provided, saved or
treated
Recovered/
treated
Generated
Provided, saved
or treated
710
tonnes
Equivalent to
350
households’ waste
output
for a year
Water
New Energy
Sustainable Infrastructure
(Active)
1,290
tonnes
630
households
1,180
tonnes
580
households
170
MWh
Equivalent to
20
households’
electricity
consumption
for a year
340
MWh
30
households
24,380
MWh
2,290
households
1,610
MWh
150
households
70
megalitres
Equivalent to
170
households’ water
consumption
for a year
2,960
megalitres
7,140
households
1,060
megalitres
2,560
households
There can be no assurance that impact results in the future will be comparable to the results presented herein.
Impax impact calculations are based on strategy AUM and portfolio holdings as at 31 December 2022. Please refer to our Impact Report 2023 for details
including sources for the household equivalencies data used in our calculations.
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Impax Asset Management Group plc
Beyond Financial Returns continued
ALIGNMENT WITH
THE UN SUSTAINABLE
DEVELOPMENT GOALS
The UN Sustainable
Development Goals (“SDGs”)
encompass 17 sets of targets
to be met by the world’s
economies by 2030.1 The
SDGs have been increasingly
adopted by investors as a tool
for evaluating funds’ positive
outcomes and exposure.
The nature of Impax’s
investment philosophy results
in meaningful alignment to the
SDGs as a by-product of the
investment process. Page 47
summarises portfolio company
exposure to the UN SDGs by
strategy, as at the end of 2022.
Impax’s investment process
does not analyse alignment
with SDGs as an investment
objective or component of
portfolio construction. Instead,
we use the SDG framework
to understand which portfolio
companies are involved in
activities that contribute
towards addressing these
critical global challenges,
as a mapping and reporting
exercise. We evaluate
alignment with this framework
by identifying the proportion
of portfolio companies’
activities that contribute to the
achievement of the SDGs – not
simply doing no harm.
1 For further information, please visit
www.un.org/sustainabledevelopment/
sustainable-development-goals
Stewardship and
advocacy
Through our stewardship
and advocacy activities,
we work to help address
environmental and social
challenges, and manage
risks arising from them.
Targeting real-economy impact
As an investor focused on the
transition to a more sustainable
global economy, Impax devotes
significant energy and resources
to its relationships with
investee companies, peers and
policymakers. Full details are
available in our Stewardship and
Advocacy Report 2023.
Impax believes that significant,
real-world impact can be achieved
through disciplined and well-
structured stewardship and
advocacy efforts. For stewardship,
this means utilising fundamental
underlying analysis, prioritising
the right companies for outreach,
preparing for engagement
meetings, following up and
escalating where progress is
not achieved.
To accelerate the removal of
barriers to progress, we are
increasingly combining company
engagement and policy advocacy,
seeking to shape regulatory or
policy change in what we call
‘systematic engagement’.
We have developed a stewardship
and advocacy framework
summarised below to illustrate
how the resources, activities and
approaches we use in our work
can achieve positive outcomes and
ultimately real-world impact.
As well as engaging directly
with investee companies and
using our shareholder votes,
stewardship also entails focusing
on engagement themes where
we work with other investors
and organisations to amplify our
influence. The framework also
outlines the critical elements
of our advocacy work, ranging
from collective action alongside
peers and direct intervention
on policy, to leadership roles
where we look to drive change
by steering industry groups and
engaging in thought leadership
activities. 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.
Annual Report and Accounts 2023
47
Portfolio company revenue alignment to the UN SDGs by strategy
Asian
Environmental
60%
Specialists
80%
Climate
Leaders
74%
Sustainable
Food
57%
53%
US Environmental
Leaders
48%
Water
Asian Opportunities
Global Opportunities
67%
67%
54%
US Large Cap
US Small Cap
Core Plus Bond
26%
New Energy
100%
36%
40%
Sustainable
Infrastructure (Active)
49%
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 2022. Figures are based on Impax internal data. Impax’s investment process does not identify alignment with SDGs as a specific objective.
Instead, the nature of Impax’s investment philosophy results in some meaningful revenue exposure within the Environmental Markets strategies, as well as the
Sustainability Lens strategies with emerging market exposure. Actual holdings and therefore impact data may vary and should not be relied upon.
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Impax Asset Management Group plc
Beyond Financial Returns continued
Pursuing real-world outcomes and impact through stewardship and advocacy activities
ACTIVITIES
OUTPUTS
OUTCOMES
(examples)
IMPACT
(examples)
COMPANY-
SPECIFIC
ENGAGEMENT
Company outreach, followed
by meetings to encourage
improvements as per
set objectives
New company GHG
reduction target
Reduced company
GHG emissions
EXERCISING
SHAREHOLDER
RIGHTS
Proxy voting and follow-on
company engagements,
filing or co-filing shareholder
resolutions
Independent racial equity
audit to assess company
practices on equity, diversity
and inclusion (E,D&I)
Improved company E,D&I
processes and practices
THEMATIC,
COLLABORATIVE
ENGAGEMENT
Industry, sectoral collaborative
engagements, amplifying our
influence in priority areas
Food retailers set new
product-level targets for
sustainable proteins
Larger proportion of food
retailers’ product portfolio
in sustainable proteins
SYSTEMATIC
ENGAGEMENT
Combined company
and policy outreach on
structural market barriers
to the transition
Engaging with S&P 500
companies and petitioning
the SEC on geolocation
data reporting
Better reporting enabling
effective analysis of physical
climate risks
OVERCOMING
INVESTMENT
BARRIERS
Collaborating with
policymakers on solutions to
barriers to investment in net-
zero transition
Contributing to Energy
Transitions Commission report
on streamlining permitting and
planning for wind and solar
Deployment of renewables at
the speed and scale required
to meet climate goals
GREENING
THE FINANCIAL
SYSTEM
Helping regulators design
fit-for-purpose financial
regulation
Led development of Climate
Financial Risk Forum Climate
Disclosure Dashboard,
referenced in UK Financial
Conduct Authority guidance
More informative disclosures
on climate-related risks
ESTABLISHING
GLOBAL
FRAMEWORKS
Encouraging collective action
to address market failures
Agreement by Food and
Agriculture Organisation to
develop net-zero roadmaps for
global food system in response
to FAIRR investor letter
Removal of key barrier to
inclusion of targets for
agriculture sector in national
climate strategies
I
P
H
S
D
R
A
W
E
T
S
Y
C
A
C
O
V
D
A
Annual Report and Accounts 2023
49
PILLARS OF STEWARDSHIP
AND ADVOCACY
In 2022, we remained focused
on climate, people and corporate
governance in our stewardship
and advocacy activities. Given our
increasing focus on biodiversity
and nature in 2022, we adopted
this as a standalone pillar for our
activities into 2023.
• Climate (transition risks, physical
climate risks, greening the
financial system)
• Nature (biodiversity,
deforestation, water quality)
• People (human capital, equity,
diversity and inclusion)
• Governance (board structure,
executive compensation,
shareholder rights)
ENGAGEMENT
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
our investee companies, including
material environmental, social and
governance (ESG) issues as well
as areas of potential improvement.
We believe it is in the interests
of our investors 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.
Engagement outcomes in 2022
160
engagement dialogues
in 2022
43%
had ‘positive’
outcomes1
11%
achieved
‘milestones’
13%
had 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.
Our engagement work takes the
following forms:
• Company engagement
• Proxy voting
• Shareholder resolutions
• Thematic engagement
• Collaborative engagement
• Systematic engagement
Each year we engage with a
significant percentage of the
companies held in our equities and
fixed income investment portfolios.
We have chosen to formally
distinguish between ‘outreach
activities’, where we make a
request of a company without
a response, and ‘engagement
dialogues’ where we have a back
and forth with decision makers.
Proxy voting summary for 2022
Shareholder proposals have grown
more sophisticated over recent
years and general investor interest
in proxy voting has increased
significantly, a trend we believe
will continue.
Impax’s approach to shareholder
proposals continues to be
recognised. We ranked first in
ShareAction’s ‘Voting Matters
Report’ for consistently voting
in favour of key environmental
and social shareholder proposals
in 2020, 2021 and 2022.2 Our
voting decisions follow the Impax
Proxy Voting Guidelines, bringing
consistency and transparency to
our approach.
2 ShareAction Ranking asset managers' voting
performance, 2022.
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Impax Asset Management Group plc
Beyond Financial Returns continued
We are currently prioritising
companies that are earlier in
the process of understanding
their nature-related risks and
encouraging these companies to
undertake robust assessments of
their nature-related dependencies
and impacts. We are also
encouraging companies to publicly
disclose geolocation data to
enable relevant risk assessments
in line with our approach to
improving location-specific
physical climate risk assessment.
ADVOCACY
Finance Sector Deforestation
Action (“FSDA”)
Impax became a founding member
of FSDA at its launch at COP26.
As part of the implementation of
our commitments under FSDA
during 2022, Impax developed
and published our Impax Policy
on Nature, Biodiversity, and
Deforestation, worked with other
signatories to engage priority
companies, and joined the Investor
Policy Dialogue on Deforestation
consumer countries workstream.
Business for Nature
Impax supported Business for
Nature in developing its position
on the priorities for the COP15
global biodiversity summit in late
2022. These included adopting
a clear and simple mission to
halt and reverse biodiversity
loss by 2030, making corporate
assessment and disclosure of
impacts and dependencies
on nature mandatory and
strengthening specific targets
on the reform of environmentally
harmful subsidies.
Taskforce on Nature-related
Financial Disclosures (“TNFD”)
Throughout 2022, Impax
continued to contribute to the
work of the TNFD Forum including
speaking at the launch of the
TNFD Consultation Group of
the UK convened by the Green
Finance Institute. We are currently
pilot testing the beta version of
the TNFD Framework and in May
2023 we hosted an asset manager
roundtable to exchange views
on the Framework and inform
consultation responses on its
recommendations.
CLIMATE
Climate-related risks and
opportunities are likely to be
significant drivers of investment
performance across the global
economy for decades to come.
Climate risks are systemic for all
companies, so both transition and
physical climate risks are important
topics of our stewardship and
advocacy activities. You can find
more information in our Climate
section on page 64.
NATURE
As a specialist investor in the
transition to a more sustainable
economy, Impax has long paid
attention to nature and the risks
associated with biodiversity loss,
deforestation and the degradation
of ecosystems. Yet there remains
limited information about how
companies are addressing
these risks.
ENGAGEMENT
We take a multi-pronged approach
to our nature-related engagement
activity. The Intergovernmental
Science-Policy Platform on
Biodiversity and Ecosystem
Services (IPBES) has identified five
direct drivers of biodiversity loss
which provide a framework for our
engagement activity most relevant
to specific investee companies.
PEOPLE
The importance of diversity and
corporate culture to long-term
company performance and risk
management is increasingly
being recognised. We engage
with investee companies on
the diversity of their senior
management teams, boards of
directors and workforces, as
well as their equity, diversity
and inclusion processes and
disclosures, talent recruitment
and retention, and health and
wellness policies. Please see our
E,D&I section for more information
on page 55.
In 2022, we engaged with and
monitored companies particularly
exposed to the complex global
challenges that followed the
pandemic – including labour
shortages, healthcare crises
and limited access to family
and dependent care. This not
only helped us understand how
companies are managing risks, but
also signalled that we appreciate
the importance of these complex
issues and highlighted the value
of transparency, especially in times
of crisis.
GOVERNANCE
Effective corporate governance
is key to companies navigating
the opportunities and risks arising
from the transition to a more
sustainable economy. We expect
high standards of corporate
governance from our investee
companies and engage to improve
their governance structures where
we believe performance could
improve. We view accountability,
oversight, efficiency, alignment,
transparency and responsibility
as the main pillars of good
corporate governance.
Principles of sound corporate
governance:
• Creating sustainable, long-term
value for stakeholders
• Protecting shareholder rights
• Maintaining high-integrity
corporate behaviour
• Ensuring an independent and
efficient board structure
• Aligning corporate incentive
structures and remuneration
with long-term interests of
shareholders
• Disclosing accurate, timely
and transparent financial
and corporate governance
information
• Ensuring strong environmental
and social performance and
disclosures
Annual Report and Accounts 2023
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Impax Asset Management Group plc
Our People
The HR team focused on
providing robust support
and scalable processes
and systems as our high-
performing team continues
to grow.
Our priorities during the Period
included enhancing our training
and development programmes;
embedding a new approach to
performance evaluation, supported
by the introduction of a new HR
information system; and initiatives
to engage with colleagues to
further enhance our culture.
MODERATED GROWTH
We significantly moderated the
rate of our headcount growth,
building our team to 300 at
the end of the Period, up 10%
(compared to an increase of 26%
in 2022). We were pleased to
open our Tokyo office in March,
welcoming two new colleagues
in Japan. During the Period we
had an employee turnover of 10%,
relatively low compared to many
of our peers, while 17% of the team
celebrated a promotion. 54% of
these promotions were women
and 23% minority ethnic.
Employee
Engagement survey
In our 2023 annual engagement survey,
we are pleased with an increased
engagement score of 90%, up one point
from 2022 and eight points ahead of the
industry benchmark, based on a 94%
response rate.
This resulted in Impax once again
winning a 5-star employer rating
from WorkBuzz, the
survey organiser.
“ Proud to work
for Impax”
96%
(10 points ahead
of benchmark)
“ I would
recommend
Impax as a great
place to work”
89%
(8 points ahead
of benchmark)
“ I am motivated
to do my best
work”
94%
(8 points ahead
of benchmark)
“ I feel I am treated
with fairness and
respect by the
people I work with”
94%
“ I understand
Impax’s mission,
culture and values”
97%
(5 points above
the benchmark)
Annual Report and Accounts 2023
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IMPAX VALUES AWARDS
In September 2023 we ran our first global Impax Values Awards.
Providing a way to recognise and celebrate colleagues’ success, the
Awards are designed to cement Impax’s culture and bring colleagues
together as we grow. Employees nominated their colleagues for five
categories – one for each of our values, with the Executive Committee
deciding on the winners. Members of the Impax Board joined
colleagues at the ceremony to present the awards.
THE BIRTHDAY FESTIVAL: CELEBRATING SUCCESS
The team celebrated Impax’s 25th anniversary in September with the
Impax Birthday Festival, with a wide range of activities to celebrate the
milestone. Colleagues took part in local volunteering clean-ups, lunched
together as part of ‘The Big Picnic’, were treated to in-office massages
and colleague-curated mindful mixtapes, and took part in the inaugural
Impax Values Awards (see above).
DEVELOPMENT: EQUIPPING OUR
PEOPLE FOR SUCCESS
We expanded our provision of
development opportunities for our
people. In 2023 we introduced a
new development tool provided by
LinkedIn Learning, giving access to
a wide range of learning resources.
We also continued a targeted
approach to development
by segmenting offerings by
groups. We introduced a ‘High-
Performance Coaching’ workshop
series for leaders and delivered our
‘Emerging Managers Programme’,
where a cohort of 22 learned
the building blocks of leading
others. We also held in-person
training programmes for all of
our managers on ‘Making Great
Conversations Happen’ to support
our new approach to appraisals.
We ran presentation skills training
for our Distribution team and
launched a new series to debate the
themes and technologies driving
the sustainable transition, hosted by
our colleague, Charlie Donovan, a
Professor of Finance and Economics
at the University of Washington.
Early careers: Global Internship
Programme
As part of our continuing focus
on building a pipeline of future
talent, we welcomed 18 paid
interns, working across a range of
disciplines and on real business
research projects. We were
pleased to provide ongoing
opportunities to four interns at the
end of the scheme. We continued
our participation in the 10,000
Black Interns programme.
54
Impax Asset Management Group plc
Our People continued
SCALING OUR CULTURE FOR
FUTURE GROWTH
Performance and Reward
We rolled out our new
compensation framework
during the Period, which
includes improvements to our
pay and performance process,
including clearer guidance and
consistency around how we assess
performance through scorecards
and performance evaluation
in appraisals. To provide more
clarity around pay expectations,
we communicated bonus target
ranges to over 50% of our team.
We have a strong emphasis on
outcome-focused goals with
clear definitions of how to
define success.
Benefits
As part of a review of our suite of
employee benefits, we aligned our
parental leave so that in each of
our locations, mothers and fathers
now receive the same amount of
paid leave, for example up to six
months for colleagues in the UK.
We also rolled out a new
service providing mental health
therapeutic support to all
colleagues to complement our
existing Employee Assistance
Programme.
Technology
To support the business in its
growth plans we launched a new
human resource information
system. The new system serves as
the backbone of human resource
operations, automating workflows,
and improving our compensation
modelling, performance
management, and the secure
storage of employee data.
WHISTLEBLOWING
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 that is readily accessible
24 hours a day and provided by an external supplier.
Annual Report and Accounts 2023
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Equity, Diversity & Inclusion
“ E,D&I is central to Impax’s philosophy,
values and mission.”
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 every colleague
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
and ethnicity.
E,D&I continues to be central to
our investment and engagement
process, incorporated through
consideration of diversity
indicators in our fundamental
ESG research, and through
our established track record
of principled proxy voting,
successful company engagements
and collaborative public policy
engagements on E,D&I issues.
Impax aims to work with firms
across the value chain that
share our principles and are
actively participating in the
transition to a more sustainable
economy, including our investee
companies and companies with
which we engage, as well as our
partners, vendors and suppliers.
We recognise that as a society
we have work to do on many
levels. As such, our approach is
holistic, looking both internally
and externally to build a more
equitable and just society for all.
GOVERNANCE AND
ACCOUNTABILITY
Our E,D&I Group is responsible
for Impax’s strategy in this area
and reports regularly to the
Executive Committee and 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. It is
supported by employee-run
sub-groups, which are responsible
for implementing the Group’s
priority initiatives.
GOALS AND OBJECTIVES
Previously we had 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)
Following good progress against
these goals, we undertook a
benchmarking exercise, analysing
our current profile, the markets in
which we operate, and comparing
ourselves with our peers. This has
informed our refined and updated
E,D&I goals, which we believe are
more transparent and measurable.
For December 2027, we aim that:
• Impax’s overall workforce should
be 48%-52% women
• Impax’s overall workforce should
be 28%-32% minority ethnic
• Impax’s senior staff1 should be
38%-42% women
• Impax’s senior staff should be
14%-18% minority ethnic
1
Impax’s corporate level of “Director” and
above.
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Impax Asset Management Group plc
Equity, Diversity & Inclusion continued
Gender overview, 2023
Total Company
Board
Executive Committee
Senior staff
Investment team
Promotions
Hires
Female
47%
57%
33%
36%
33%
54%
49%
Prefer not
to disclose
gender
2%
0%
0%
2%
1%
0%
0%
Male
52%
43%
67%
62%
66%
46%
51%
Self-reported, anonymous data collected in August and September 2023. Conducted by Impax, with an
86% response rate.
Ethnicity overview, 2023
Total Company
Board
Executive
Committee
Senior staff
Investment team
Promotions
Hires
Asian
15%
0%
0%
10%
22%
16%
14%
Additional
ethnic
groups
6%
0%
0%
2%
8%
5%
9%
Black
4%
0%
8%
1%
1%
2%
2%
Prefer not
to disclose
Race/
Ethnicity
2%
0%
0%
2%
1%
1%
0%
White
74%
100%
92%
85%
67%
77%
75%
Self-reported, anonymous data collected in August and September 2023. Conducted by Impax, with an
86% 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, American Indian or Alaska Native, Middle Eastern, Native Hawaiian or Other Pacific
Islander, Two or More Races or Mixed Heritage, and other identities that staff have self-identified.
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 and retaining
diverse talent to help Impax,
and our clients thrive. We are
advancing diversity across the firm
and creating an inclusive workforce
at all levels of our organisation. We
conduct an annual demographic
survey for all colleagues as well as
collecting and reporting on data
from new hires on an ongoing
basis. This year we have started
to collect this information using
our new HR system; the data is
reported on an anonymous basis
and with the individual agreement
of each colleague. We analyse
these changes year-on-year and
report to senior management
and the Board on progress against
our goals.
As at year end, 47% of colleagues
are female, close to our 2025
target of 48% - 52%. 25% are
minority ethnic. 54% of promotions
and 49% of new hires during
the Period were women. 23% of
promotions and 25% of new hires
were minority ethnic.
57% of the Board members are
female, including the Chair.
100% of the Board is white; we
are identifying opportunities
to address this lack of ethnic
diversity this year as part of our
succession plans.
Gender progression
20231
20222
20213
1 As of August/September 2023.
2 As of November 2022.
3 As of April 2021.
Ethnicity progression
Female
47%
49%
46%
Prefer not
to disclose
gender
2%
1%
0%
Male
52%
50%
54%
Asian
Black
15%
14%
12%
4%
6%
5%
Additional
ethnic
minority
groups
6%
5%
3%
Prefer not
to disclose
race/
ethnicity
2%
1%
3%
White
74%
74%
77%
20231
20222
20213
1 As of August/September 2023.
2 As of November 2022.
3 As of November 2020 (latest available data).
Gender pay gap – median base salary gap
Senior staff
Mid-level staff
Junior staff
Data as of April in the respective year.
2023
7.1%
5.6%
21.7%
2022
1.9%
2.7%
12.9%
2021
16.1%
12.7%
5.3%
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GENDER PAY GAP
As at April 2023, based on a
headcount of 295 employees, 48%
of employees were women and
52% men. The gender composition
remained consistent with last year.
Since April 2022, 82 employees
joined the Company with an equal
gender distribution of 41 male and
41 female.
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 (5.6%) and senior
(7.1%) levels have increased since
the previous year (2.7% and 1.9%
respectively in 2022). We have
seen a more significant increase
in the median pay gap at junior
level (21.7% up from 12.9% in
2022). This is primarily due to a
high representation of women in
junior level analyst/team assistant
positions and male new joiners
hired into associate level positions
in our Investment teams where
salaries are typically higher.
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, as articulated in our
E,D&I goals, and to the continued
examination of in-level pay
differences, including using robust
external pay benchmarking data.
58
Impax Asset Management Group plc
Equity, Diversity & Inclusion continued
TALENT AND RECRUITMENT
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.
• Provided training materials
for the HR team to reduce
unconscious bias in the
recruitment process.
• Developed a set of questions
for hiring managers across eight
behavioural competencies to
eliminate bias in the interview
process where possible.
• Launched a GDPR-compliant
applicant tracking system,
allowing the Company to collect
demographic information on
candidates and track progress
throughout the recruitment
process.
• Ensured that hiring practices
and instructions to recruitment
firms include, where practicable,
female and/or racial/ethnic
minority candidates for every
open role.
• Enhanced career and talent
development programmes to
promote, where appropriate,
the progression of current
Impax employees from female
and racial/ethnic minority
groups to mid and senior levels.
INCLUSION, EDUCATION AND
ENGAGEMENT
Increasing inclusivity and
communications around E,D&I is a
top priority. Much of this activity
is coordinated by the employee-
run Impax Inclusion Network.
This group has continued to run a
regular speaker series during the
Period to broaden E,D&I inclusion,
education and awareness.
GLOBAL CELEBRATION OF PRIDE MONTH
In July 2023 Impax’s Inclusion Network celebrated Pride month to
promote awareness and understanding of the LGBTQ+ community
and its history. Employees in London, Portsmouth and Hong Kong
took part in a culture quiz, heard from LGBTQ+ colleagues and
watched a short film on the history of Pride, with the bakeries
selected to cater for the London and Portsmouth events donating
proceeds to the LGBTQ+ community.
The film told the story of Pride’s beginnings as a resistance and
riot-based movement in contrast to the commercial corporatisation
of recent years. Colleagues were encouraged to understand the
history of the US-based Stonewall riots, in particular the direct role
of LGBTQ+ people from Black and ethnic minority backgrounds who
sparked the beginning of a human rights revolution.
Annual Report and Accounts 2023
59
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
participation in the City Hive and
#TalkAboutBlack mentorship
scheme. It also participates in the
10,000 Black Interns programme
and partners with US-based
non-profit the Toigo Foundation.
These initiatives aim to help make
progress towards addressing the
gender and ethnicity gaps within
the investment management
industry and wider society.
Impax has signed charters with,
or are members of the following
organisations:
• CFA DEI Code (USA and
Canada)
• Race at Work
• Thirty Percent Coalition
• UN Women’s Empowerment
Principles
• Women in Finance
• Women in Governance
CITY HIVE CROSS COMPANY MENTORSHIP PROGRAMME
We supported the City Hive Cross Company Mentorship Programme
in association with #TalkAboutBlack for the second time during
the Period.
As a City Hive partner, Impax colleagues were matched with
mentors and mentees from across the savings and investments
industry, with the aim to accelerate the development of diverse
talent. Five mentees and five mentors from Impax took part in the
nine-month programme, with two senior mentors returning for a
second year.
Mentors and mentees are encouraged to meet on a four to six
weekly basis, either face-to-face or online. Supported via a series of
virtual check-ins with City Hive and Coach Mentoring, these sessions
take place at the beginning, middle and endpoints to ensure
relationships remain on track, have purpose, and that a duty of care
is observed.
Through supporting the cross-company programme, we are
investing to address the confidence gap often faced by diverse
talent and demonstrating a commitment to the continued
professional success of our colleagues, from all walks of life.
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Impax Asset Management Group plc
Equity, Diversity & Inclusion continued
Engagement case study
XINYI SOLAR HOLDINGS
Hong Kong-listed Xinyi is a leading photovoltaic glass manufacturer
and solar farm developer. Impax has been engaging with this
company since 2019, with the main objective of improving its
governance practices, including board independence and diversity.
While the company acknowledged Impax’s initial concerns
around the lack of board diversity, we voted against Nominating
Committee members in 2020 and followed up with further
engagement. Initially the company expressed no plans to improve
board composition or independence, with no female directors on
the board. The company reiterated that female representation
within their wider industry was low, and it remained challenging to
recruit qualified female employees or directors. Impax remained
disappointed with this outcome and voted against the Nominating
Committee members again at the 2021 annual meeting, re-
emphasising to the company our belief in the importance of diverse
representation for long-term value creation.
In the company’s 2022 annual meeting, we were pleased to see
nomination of the company’s first female independent director
to the board following multiple years of engagement and votes
against board directors. Despite progress, board independence
remains low, and we continue to engage with the company on
this issue.
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
(see page 38).
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. E,D&I is also one of
Impax’s four firm-wide thematic
engagement priorities (see case
study, left). Impax believes it is
important to focus on the drivers
that can improve and build
diverse representation in the
talent pipeline over time through
programmes, initiatives and goal
setting. Impax focuses on diversity
related to gender representation,
especially in Asian and some
European companies, and diversity
policies, disclosures and targets in
many US companies.
THOUGHT LEADERSHIP
Impax has published several
thought leadership pieces related
to E,D&I during the Period. This has
included an article on ‘Identifying
and measuring sources of alpha in
gender factors’ in July 2023 and an
examination of ‘The business case
for diversity’ in November 2022.
Annual Report and Accounts 2023
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Impax in the Community
Our mission statement
underpins our community
strategy: “to make a
contribution to the
development of a
sustainable society by
supporting or undertaking
relevant research and
engaging or collaborating
with others.”
We partner with organisations
that reflect our long-term goal
of investing in the transition to a
more sustainable economy. Our
community network contains
complementary organisations
with coaligned aims and values,
maximising our impact.
We significantly expanded our
community activity during the
Period, donating £504,933 (2022:
£287,382) to charitable causes.
We are now particularly focusing
our activities on charities in
education and developing skills in
the green economy and during the
Period developed new community
partnerships with Country Trust
and Groundwork UK, and launched
the Pax Scholarship programme,
supporting students in New
Hampshire. Our colleagues
once again voted that food
scarcity should be our ‘Community
Cause of the Year’ and
engaged in volunteering and
fundraising activities.
OUR COMMUNITY PARTNERS
Ashden: is at the frontline
of climate change solutions,
promoting innovators through
its annual Ashden Awards. The
Impax-sponsored Ashden Award
for Energy Innovation highlights
businesses instrumental in
decarbonising the UK’s energy
sector and delivering net zero.
A group of colleagues participates
in the awards each year, using
their analytical skills to help the
Ashden team assess the shortlist
of entrants.
During the Period, Impax
colleagues heard from wind farm
recycling firm Renewable Parts Ltd,
as the 2022 winners shared their
story. Refurbishing wind turbine
parts in a disused ambulance
station in rural Scotland five years
ago, today they inspire young
people in Argyll to become energy
specialists, nearly doubling their
headcount and revenue every year.
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 with
team members serving on working
groups including Land Use and
Climate, the Investor Network
on Climate Risk, Valuing Water,
Policy Working Group, Carbon
Asset Risk Working Group, and the
Shareholder Initiative on Climate
and Sustainability.
Impax has funded Ceres to provide
a landscape analysis of reporting
on avoided emissions, aimed at
identifying benefits and drawbacks
of various ways to report on future
emissions reductions for investors.
This looks at existing methods for
calculating avoided emissions, the
merits of specific methodologies
to specific situations, and
understanding how avoided
emissions may fit into corporate
transition plans and investor
climate action plans.
ClientEarth: connects lawyers
with the needs of the planet,
bringing environmental issues
to court and fighting on behalf
of the environment. Impax has
supported the charity since 2015.
During the Period ClientEarth
lawyers presented on their work
decarbonising Asia’s energy
systems.
Country Trust: Impax and Country
Trust launched a partnership
during the Period to support
the charity to expand its Food
Discovery programme, which
connects schoolchildren with food,
sustainability and farming.
Country Trust offers
disadvantaged children the
opportunity to understand the
connection between the way we
live, our own health, and the health
of the planet. Their vision is to
enable all children to discover
how the land supports our
existence and equip them to
become active participants in
the world’s wellbeing.
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Impax Asset Management Group plc
Impax in the Community continued
The schools chosen on the Food
Discovery programme have a
higher-than-average percentage
of children eligible for Free
School Meals and children with
special educational needs. The
programme delivery includes
farm visits, in-class sessions and
playground ‘farmer’s markets’.
Over the Period, the Food
Discovery programme supported
by Impax helped 10 schools and
480 children to receive over 1,260
learning hours delivered across
122 sessions in Derby, Greater
Manchester, Birmingham, and
North West London.
The impact of the programme is
demonstrated through reported
teacher observations, with 90% of
teachers saying that ‘most or all
children interacted with the natural
world during food discovery’, 88%
that ‘most or all of their pupils tried
new things’, and 84% that ‘most
or all of their pupils talked to each
other about what they learned’.
The Food Discovery Programme
is filling a vital gap in the current
curriculum, clearly demonstrated
through the enthusiasm of both
children and teachers and with
Impax funding it will continue
to be delivered where it is
needed most.
Groundwork UK: Impax and
Groundwork UK launched the
Impax Green Jobs Pathfinder
programme during the Period.
This supports 10 people from
underrepresented communities
into work in the green economy in
West Yorkshire, an area of previous
high carbon industry and high
youth unemployment.
The Impax Green Jobs pathfinder
is a next step in the journey for
these trainees to explore their
future careers in a sheltered
setting whilst receiving paid work
on short to six-month contracts.
Supported via Groundwork’s
feeder programme, Routes to
Low Carbon Jobs, the scheme
aims for a 50/50 gender split with
a minimum 40% women and is
a vote of confidence for young
people who haven’t experienced
paid employment before.
The young people were placed
in roles within local companies
operating in different areas
of the green economy, from
delivering energy advice to low-
income households to promoting
biodiversity and wellbeing through
the conservation of land and
green spaces.
The Pax Scholarship Programme:
was created and launched in
December 2022 to honour the
legacy of the Pax World Funds.
The Pax Scholarship Program
awards annual scholarships to
three New Hampshire-based
educational and non-profit
institutions that promote
sustainable finance, advance
women and girls, and foster global
peace; three areas rooted in the
values of the Pax World Funds.
The programme funds a
scholarship at the Peter T.
Paul College of Business and
Economics at the University of
New Hampshire for students
focused on sustainable finance.
A donation to the New Hampshire
Women’s Foundation supports
their work in advancing women
and girls in New Hampshire. The
programme invests in global peace
by supporting Friends Forever
International, a non-profit that
brings young people from
war-torn regions together to try
to cross their historic barriers
and work together.
Funding these organisations on an
annual basis will ensure that the
values of the Pax World Funds will
continue to make a lasting impact.
Annual Report and Accounts 2023
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Internal engagement
We seek to align colleagues
behind our business strategy and
build a motivating culture and
environment for our global team.
This is delivered through a varied
communications mix against
four strategic drivers: strategy
and business, one Impax culture,
employee engagement and
employer brand.
Regular engagement campaigns
and events are led by our
colleague-run groups within
E,D&I, Environment, Wellbeing
and Volunteering, highlighting key
moments throughout the year.
These aim to drive awareness
and maintain open and ongoing
dialogue on key issues affecting
our industry and the planet,
promote team engagement and
wellbeing, and give back to the
communities in which we operate.
VOLUNTEERING AND GIVING
All Impax employees are given
paid leave to volunteer and
are encouraged to use Impax’s
matched giving schemes,
available globally, to give back
to their communities.
Impax’s Community Cause of the
Year aims to unite all colleagues
globally around a single cause,
with a local charity in each area.
Colleagues vote to continue
volunteering for food scarcity and
food waste, working with charities
in each of our offices to combat
the issue.
£504,933
donated to charity during the Period.
STEPS CHALLENGE: THE WILD ATLANTIC WAY, IRELAND
In March 2023, the Dublin team and the Wellbeing Group led
the remote wellbeing challenge, The Steps Challenge: The Wild
Atlantic Way.
A total of 125 colleagues were placed into 12 teams and each week,
‘stepped’ the equivalent of a stretch of the Wild Atlantic Way along
Ireland’s coastline, learning more about the Wild Atlantic Way via
the virtual walking pack shared by the Wellbeing team and sharing
photos of their walks or runs with the Impax community. Over a
four-week period, colleagues clocked up a total of 32,003,739 steps,
or 24,400km! The challenge focused on fitness, teamwork and
culture sharing across regions.
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Impax Asset Management Group plc
Climate-related Disclosures
Introduction
The purpose of this section 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.
We are pleased to again
publish climate-related financial
disclosures as part of the
Company’s Annual Report and
Accounts. Our reporting, which
is aligned with guidance from
the Taskforce on Climate-related
Financial Disclosures (“TCFD”)
covers the same 12-month
period, from 1 October 2022
to 30 September 2023 (“the
Period”), as the Company’s
financial year.
Ahead of requirements under
Financial Conduct Authority
(“FCA”) Rules, Impax produced
its first Climate Report using the
TCFD framework as part of its
2022 Annual Report and Accounts.
Future reporting under TCFD will
be undertaken on a calendar basis,
with our reporting for the 2023
calendar year due to be published
by 30 June 2024. We will be
further developing our disclosures
under the FCA regime, including
reporting climate-related metrics
at the product level, ahead of the
publication of our TCFD report
in 2024.
“ Our climate-related reporting 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.”
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In line with the TCFD’s recommendations, this section of the Report comprises four interrelated parts:
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 parts covers both our business operations and, more critically, the investments we manage
on behalf of our clients. While reducing our own environmental impact is important, 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. Indeed, we believe that
they are likely to be significant drivers of investment performance for large parts of the global economy
over the decades to come.
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Climate-related Disclosures continued
Governance
The assessment and management of climate-related risks
and opportunities are underpinned by extensive in-house
expertise and appropriate governance structures.
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.
Management and monitoring
of climate-related risks and
opportunities, including
implementing the TCFD
recommendations, is delegated to
senior management, specifically
the Executive Committee.1
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, there are
specialist committees dedicated
to climate and related issues, as
they pertain to the investments
we manage, most notably the
Sustainability Lens Committee
and the Sustainability Policy
Committee. The Private Markets
division has its own Investment
Committee and Environmental,
Social and Governance (“ESG”)
Sub-Committee.
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
the investment team, a team
of experts in climate change,
environmental and energy policy
sit within the Impax Sustainability
Centre, which now brings together
our Sustainability & Stewardship
and Policy & Advocacy teams into
a single centre of excellence.
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 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”).
An illustration of the governance
structure for climate-related issues
is included on the following page.
1 As of November 2023, the Executive Committee has been replaced in this role by the Management Committee.
Annual Report and Accounts 2023
67
Governance structure for climate-related issues
Board of
Directors
Board
committees
Audit & Risk
Committee
Environment
Group
Other
committees
Executive
Committee
Governance structure as at 30 September 2023.
Dotted line denotes observer role of Chair of Audit
& Risk Committee on Environment Group. As of
November 2023, the Executive Committee has been
replaced in this role by the Management Committee.
Private
Equity
Investment
Committee
Investment
Committee
ESG Sub-
Committee
Sustainability
Policy
Committee
Sustainability
Lens Committee
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Climate-related Disclosures continued
AUDIT & RISK COMMITTEE
Committee details
Committee description
Chair: Non-Executive Director
(Annette Wilson, since 1 December 2023)
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
Chair: Chief Investment Officer
(Listed Equities)
Membership: Impax investment teams
SUSTAINABILITY LENS COMMITTEE
Committee description
The Committee oversees investment activities,
investment performance and risk management,
and regularly addresses climate-related issues. The
Committee meets every fortnight.
Committee details
Committee description
Chair: Chief Investment Officer
(Listed Equities) and Global Head of
Sustainability & Stewardship
Membership: Impax’s leading sustainability experts
The Committee assesses 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. The Committee meets every quarter.
SUSTAINABILITY POLICY COMMITTEE
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. Significant policy
developments are reported to the Investment
Committee. The Committee meets as required.
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69
ENVIRONMENT GROUP
Committee details
Chair: Head of Sustainability & Stewardship,
North America and Senior Associate,
Sustainability & Stewardship
Membership: Impax staff, with a Board observer
Committee description
The 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. It reports
to the Executive Committee and provides an
annual update to the Board. The Group meets
every quarter.
PRIVATE EQUITY/INFRASTRUCTURE INVESTMENT COMMITTEE
Committee details
Committee description
Chair: Founder & Chief Executive
Membership2: Head of the PE/Infrastructure Team,
Head of the Transaction Team (PE/Infrastructure),
Head of Asset Management & Sustainability (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 PE/Infrastructure Team’s Head of Sustainability
is an ESG 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. The Committee meets
as required.
ESG SUB-COMMITTEE (PRIVATE EQUITY/INFRASTRUCTURE)
Committee details
Committee description
Chair: Head of Asset Management & Sustainability
(PE/Infrastructure)
Membership: Representatives from the PE/
Infrastructure Team (Technical and the Head of
the Team), Compliance, Legal and Global Head of
Sustainability & Stewardship
2 This is the Investment Committee for Impax New Energy Investors IV SCSp.
The Sub-Committee discusses relevant topics,
including climate, and is responsible for governing
the PE/Infrastructure ESG Policy. The Committee
meets every six months.
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Impax Asset Management Group plc
Climate-related Disclosures continued
Strategy
We are focused on the investment opportunities arising from the transition to a more
sustainable economy. This includes the transition to a net-zero climate resilient economy.
In January 2018, we launched a
dedicated Climate listed equities
strategy. As at 30 September
2023, its AUM stood at £2.8 billion,
making it Impax’s fifth-largest
investment strategy.
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 ‘Risk Management’ from
page 72.
Impax is one of the largest and
longest established investors
dedicated to investing in the
transition to a more sustainable
economy. We offer a suite of
investment solutions spanning
multiple asset classes and
underpinned by proprietary tools.
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.
Here, we outline how we believe
Impax is itself well positioned
to capitalise on climate-related
opportunities and how we
approach climate-related risks.
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.
All of our investments are
intentionally aligned to a transition
to more sustainable and low-
carbon economy. As of 31
December 2022, 64% of Impax’s
AUM committed under the Net
Zero Asset Managers (“NZAM”)
initiative was invested in assets
that we assess to be ‘climate
solutions’.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.
3 Impax’s initial commitment under the NZAM initiative consists of all actively managed listed equities and private equity investments, which represented 90%
of AUM as of 31 December 2022. Source: Impax analysis, as at 31 December 2022. Investment-related AUM excludes cash. Please note that this data has not
been externally assured.
Annual Report and Accounts 2023
71
The Company’s strategy is based
on the conviction that, over time,
high quality companies and
assets that deliver solutions to
climate change mitigation and/
or adaptation will outperform
broader financial markets. While
low-carbon alternatives are already
cost competitive with fossil fuels
in many situations, the pace and
success of the transition to a net-
zero economy hinges on global
public policy support. As a result,
Impax tracks the impact of policy
developments, both to assess the
valuation of existing investments
and to identify future investment
opportunities and risks.
This analysis is supported by
Impax’s investment team, which
includes financial analysts
focussed on specific sub-sectors
and policy experts who provide
detailed policy analysis and
updates on emerging trends. In
addition, Impax actively engages
with the policymaking community
to encourage the development of
well-designed policy frameworks
that attract private capital
where it is needed. We also
combine aspects of our company
engagement and policy advocacy
to address systemic climate risks
(see below).
The performance of Impax
investment strategies could be
undermined by poor climate
risk management of investee
companies. We have therefore
set net-zero targets for our
investments (see page 81) and
undertake rigorous ESG analysis
on all companies and engage with
companies not managing climate
risks adequately and non-aligned
to a transition to net zero, as
outlined under ‘Risk Management’
from page 72.
ADDRESSING SYSTEMIC CLIMATE RISK
Climate risks are material for all companies. Yet through our engagement activities we encounter critical
and often hard-to-engage areas, with barriers or bottlenecks preventing progress and better practices
in companies. To overcome these, we have started combining aspects of our company engagement and
policy advocacy, seeking to shape company practices through regulatory or policy change in what we call
‘systematic engagement’. We believe this is a critical element in pursuing real-world outcomes and impact
through stewardship and advocacy activities, including addressing systemic climate risk.
ACTIVITIES
OUTPUTS
OUTCOMES
(examples)
IMPACT
(examples)
STEWARDSHIP
SYSTEMATIC
ENGAGEMENT
Combined company and
policy outreach on structural
market barriers to the
transition
Engaging with S&P 500
companies and petitioning
the SEC on geolocation data
reporting
Better reporting enabling
effective analysis of physical
climate risks
ADVOCACY
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Impax Asset Management Group plc
Climate-related Disclosures continued
Risk management
We look to identify, assess and manage physical and transition risks that could
undermine the performance of our investee companies, and therefore our investment
strategies. We also have processes in place to manage operational climate risks.
INVESTMENTS
Climate risk assessment
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:
Transition risks
• Disclosure: Rigour of
measurement and transparency
of reporting of climate risk
exposure and management,
including greenhouse gas
(“GHG”) emissions across all
scopes, in absolute and relative
intensity terms
• Management: Establishment
of climate-aware management
systems; capital expenditure
investment in energy efficiency
and renewable energy;
management compensation tied
to climate outcomes
• Target-setting: Robustness of
targets, including whether they
are science-based, and inclusion
of short-, medium- and longer-
term time horizons, Paris-
aligned with sectoral pathways
to net zero, ideally externally
verified
PRICING PHYSICAL CLIMATE RISK – TWO SECTORS IN
THE SPOTLIGHT
Physical climate risk management poses a significant data and
methodological challenge for investors. Currently, there is no standard
approach to understand, communicate or model these risks. During
the Period, Impax collaborated with academics from the UK Centre for
Greening Finance and Investment (“CGFI”) at the University of Oxford,
as a step towards a consistent methodology on translating future
climate changes into quantitative inputs for financial models.4,5 Impax
and the CGFI worked together on analysing two specific industries
– semiconductors and data centres – where Impax has key insights
on industry dynamics, asset locations and rebuild costs. The purpose
of the collaboration was to help Impax understand which assets
might face heightened physical risks, and therefore loss or damage.
The case studies demonstrated the usefulness of the CGFI’s Global
Resilience Index Initiative (“GRII”) datasets and the application of a
new methodology to assess future financial losses at the asset level.
4
Impax has been a supporter of the UK Centre for Greening Finance and Investment since its inception,
and Impax Founder and CEO, Ian Simm, is a member of the CGFI Advisory Council.
5 For full details of the research, please see: Impax, 2023: Pricing physical climate risk – two sectors in
the spotlight.
Annual Report and Accounts 2023
73
• Performance: Outcomes
achieved from climate-aware
management and target-setting
These are important components
in our assessment of companies’
alignment to net zero, for which
Impax set a 2030 target in
November 2022.
Physical 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
We employ a top-down approach
to assessing companies’ exposure
to chronic and acute physical
climate risks, considering industry-
specific and country-specific
factors, along with company-
specific vulnerability assessments.
Where companies disclose the
location of key assets, we can
also use a bottom-up approach
to assessing their exposure
to physical risks. Using these
assessments, we can look to
calculate the financial implications
for investors, as described under
‘Pricing physical climate risk’, on
page 72. Impax continues to focus
on developing and implementing
its own approaches to physical
climate risks through engagement
with academia, companies and
other investors, as well as through
ongoing internal research.
Investments in the Impax 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.
Climate risk management
Transition 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.
Physical risks
We have 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 CMIP16-driven,
‘Representative Concentration
Pathways’ (“RCPs”).6 These
scenarios underpin the research
collated by the Intergovernmental
Panel on Climate Change (“IPCC”)
in their assessment reports.
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RCP4.5 scenario. Impax’s ‘business as usual’ scenario is equal to the RCP8.5 scenario per IPCC definitions, which refer to significant global abatement of GHG
emissions, and no abatement. Although this scenario has been criticised as an unlikely outcome given current mitigative efforts, Impax believes in its validity
as a way to capture a worst-case scenario that can be explored to assess the resilience of our investments in a world where key global tipping points or poorly
understood non-linear drivers cause the climate to act even more erratically than expected.
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Impax Asset Management Group plc
Climate-related Disclosures continued
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. These steps are necessary
to developing a pricing model for
physical climate risk, but more
work will be needed in order to
price physical risks, and not just
identify value at risk.
Stewardship & Advocacy
Climate-related risks and
opportunities are likely to be
significant drivers of investment
performance across the global
economy for decades to come.
We continue to make the
case for stronger reporting
of environmental and social
impacts through our engagement
with companies, regulators
and standards-setting bodies.
During the Period, we engaged
proactively with regulators to
develop regulation focused on
sustainable finance in the UK
and the US. We also submitted
a detailed response to the Hong
Kong Exchange (“HKEX”) on
its climate action disclosure
consultation, which mandates
climate-related disclosures in
issuers’ ESG reports and seeks
to align with the International
Sustainability Standard Board’s
Disclosure requirements.
Enhanced disclosures ultimately
enable investors like us – and our
clients – to make better informed,
risk-adjusted investment decisions
and to target our stewardship and
company engagement activities
where we believe they can have
the greatest effect.
Engagement with investee
companies – 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 –
is an important tool for climate
risk management.
Impax often works with investee
companies to stress the
importance of addressing material
climate risks, and we often escalate
these engagements when we feel
that the investee is not sufficiently
attuned to these risks. 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
• Intervening or engaging
together with other
shareholders, institutions or
organisations
• Filing or co-filing resolutions
at General Meetings
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.
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75
COMPANY ENGAGEMENT
ON MANAGING
TRANSITION RISKS
Impax first engaged with
Giant, one of the world’s
largest bicycle designers and
manufacturers, on climate risk
management in 2019. Impax
followed up with the company
in 2022 on progress around its
GHG reporting. The company
informed us that they had
finished a more robust Scope
1, 2 and 3 emissions inventory
and were in the process of
undertaking an independent
review of the data. Since then,
the company submitted its
first response to CDP in 2022
and plans to initiate more
transparent ESG reporting in
2023. Impax will continue to
engage on GHG emissions
disclosures and monitor
absolute reductions and
science-based target setting
in line with international best
practice frameworks.
Policy advocacy highlights
Highlights of our climate-related
advocacy activities during the
period are set out below by our
priority themes:
• Financing the transition to
net zero
• Enhancing climate resilience
• Improving climate-related
financial disclosures
• Nature (including deforestation)
Further details of our work in
these areas can be found in our
Stewardship and Advocacy Report
2023.
• Global food system net-
zero roadmap: During 2022,
we supported the FAIRR
Foundation’s engagement with
the UN Food & Agriculture
Organisation (“FAO”) to
encourage them to develop
a net-zero, nature-positive
roadmap for the global food
system. We were delighted
to take part in a side event
at COP27 where the FAO
announced their intention to
develop such a roadmap in time
for COP28 in late 2023.
Building a climate-resilient
economy
Financing the net-zero transition
• Encouraging corporate
• Energy Transitions Commission
(“ETC”): We contributed to the
ETC’s Financing Net Zero report,
which concluded that the critical
action for governments to
establish ‘real economy’ policy
frameworks, which should
include a clear strategic vision,
address the green premium
challenge, reduce downside
risks and remove supply-side
bottlenecks.
adaptation: We contributed
to the IIGCC’s proposed
Climate Resilience Investment
Framework, which outlines
how investors can encourage
companies to develop more
effective adaptation plans. We
were pleased to see this theme
reflected in the Sharm El-Sheikh
Adaptation Agenda launched
at COP27.
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Impax Asset Management Group plc
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• Climate Financial Risk Forum
(“CFRF”) Adaptation Working
Group: In early 2023, Impax
was invited to co-chair a new
CFRF working group focused
on enhancing assessment
of physical climate risks
and scaling up finance for
adaptation solutions and
climate resilience.
Improving climate-related
disclosures
• Financial disclosures: We
chaired the Disclosures
workstream of the CFRF
Disclosures, Data and Metrics
working group which published
its updated Climate Disclosure
Dashboard in March 2023. In
July we submitted a response to
HKEX’s climate action disclosure
consultation, which will mandate
climate-related disclosures in
issuers’ ESG reports aligned with
the International Sustainability
Standard Board’s disclosure
requirements.
• Transition plans: We contributed
to Glasgow Financial Alliance for
Net Zero (“GFANZ”) guidance
on Financial Institution Net-zero
Transition Plans published in
November 2022. At COP27, the
Transition Plan Taskforce (“TPT”)
launched its draft disclosure
framework which aims to set
the gold standard for private
sector climate transition plans.
In early 2023, Impax was asked
to co-chair the TPT Asset
Management working group
developing sector-specific
guidance for the financial sector.
Nature (including deforestation)
• Taskforce for Nature-related
Financial Disclosures (“TNFD”):
In May, Impax hosted an asset
manager roundtable on behalf
of the TNFD and Green Finance
Institute to discuss the latest
version of the TNFD’s proposed
framework for nature-related
disclosures and submitted our
response to the TNFD’s public
consultation.
• Halting deforestation: Impax
is a member of the Investor
Advisory Group of the Finance
Sector Deforestation Action
(“FSDA”), which supports
individual and collective
action to assess exposure to
deforestation risk and deepen
engagement with the highest
risk holdings. During the
period, we were also asked
to co-chair the Consumer
Countries workstream of the
Investor Policy Dialogue on
Deforestation.
Annual Report and Accounts 2023
77
Work continues to fully integrate
climate-related risks into the
Company’s risk management
framework, which is based on the
‘three lines of defence’ model
see page 88. The framework
enables risk identification, risk
measurement, risk mitigation, risk
monitoring and reporting, thereby
ensuring a holistic and integrated
risk management culture. Under
this framework, respective
business units lead in identifying,
assessing and managing relevant
risks – the ‘first line’. Compliance
and Risk functions then provide
independent challenge – the
‘second line’. Internal audit then
provides independent assurance of
risk management – the ‘third line’.
The framework is overseen by the
Audit and Risk Committee
(please see page 88 for details).
OPERATIONS
Climate risk assessment
and management
Transition risks
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 risks
Our assessment of climate-related
risks relating to our operations
concluded that the physical
risks facing our offices remain
relatively low. While drought risk
and water stress is high across
the metropolitan areas where
Impax offices are based, including
in Dublin but 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.
Our Japan office, which opened
this year, meanwhile faces the
potential risk of typhoons.
Overall, the assessment indicated
that the main operational risks
are associated with connecting
infrastructure and transportation
systems on which employees
depend. Impax’s business
continuity plan includes measures
that address recovery locations,
systems recovery and the recovery
of critical business functions in
the event of these and other
operational risks. The recent
COVID-19 pandemic provided a
real-life test of the Company’s
ability to successfully operate
from multiple remote locations
anywhere that a secure internet
connection is present.
INDEPENDENT OVERSIGHT,
MONITORING & ASSURANCE
Climate risk has been formally
recorded on the Company’s key
risk register, making it subject
to independent oversight and
assurance from the enterprise
risk team. Two operational
climate-related risks are defined:
first, physical risks to Impax
operations; and second, risks
arising from any failure to
appropriate integrate climate risk
into investment decisions. Impax’s
risk management framework and
governance process provide the
necessary controls to measure,
assess and manage its major risks.
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Impax Asset Management Group plc
Climate-related Disclosures continued
Metrics and targets
We believe that the asset management sector can contribute
to meeting the Paris goals through the accurate pricing of
climate risk in investment decisions, through engagement and
advocacy work, and by investing in climate solutions.
In this section, we quantify the
impact of Impax’s investments
on climate change using a range
of metrics, including the GHG
emissions and avoided emissions
of portfolio companies and our
exposure to climate solutions
as a proportion of overall AUM.
These should be considered
in the context of investment-
related targets set under the Net
Zero Asset Managers (“NZAM”)
initiative.
We also include metrics for our
climate-focused stewardship and
advocacy work with companies
and policymakers.
As a people-based business,
Impax’s Scope 1 and 2 GHG
emissions from operations are low
relative to our financed emissions.
Nonetheless, the business has
ambitious environmental targets
and we report on progress towards
meeting them here.
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.
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.
Impax Climate Disclosure Dashboard
Category
Use case
Metrics
Impact of Impax’s
investments on climate
change
Financing the transition
Exposure to climate solutions
Avoided emissions
Financed emissions
Financed emissions
Weighted average carbon intensity
(“WACI”)
Cross-cutting
Engagement
Portfolio alignment
Climate-focused engagements and
outcomes
INVESTMENTS
Investment-related metrics
Financing the transition
Exposure to climate
solutions
64%
of AUM
As at 31 December 2022, 64%
of total Impax’s AUM committed
under the NZAM initiative
was invested in companies
and assets providing climate
solutions.7 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.
Financing the transition
Avoided emissions of investee
companies
Measuring the GHG emissions
– and avoided emissions –
associated with the products
and services of companies held
within Impax portfolios helps us
demonstrate their contribution to
the transition to a lower-carbon
economy.8
We calculate and report, at a
portfolio level, the GHG emissions
impact of companies held in
Impax strategies in 2022, based
on US$10 million invested in each
respective strategy, on page 80.
Our reporting captures GHG
avoided emissions and reporting
for investment strategies that
account for 90% of Impax’s AUM,
as of 31 December 2022.
Emissions are separated into
Scopes 1 and 2 – which include
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.
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79
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Impax’s initial commitment under the NZAM initiative consists of all actively managed listed equities and private equity investments, which represented 90%
of AUM as of 31 December 2022. Source: Impax analysis, as at 31 December 2022. Investment-related AUM excludes cash. Please note that this data has not
been externally assured.
8 To evaluate the real-world impact of climate solutions, we look to compare the GHG emissions arising from the use of companies’ products or services with
the GHG emissions generated in a world where that product does not exist. We look to use companies’ own estimates of avoided emissions as a starting
point, where available. We mostly rely on companies’ own reporting assumptions and methodologies on avoided emissions, where disclosed, but evaluate
whether they are rigorous in their use of baseline scenarios, life-cycle emissions approaches and value chain attribution method. Where we estimate
companies’ avoided emissions ourselves, our assumptions broadly align with the five steps highlighted by the recently published guidelines on assessing
avoided emissions by the World Business Council for Sustainable Development (“WBCSD”).
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Impax Asset Management Group plc
Climate-related Disclosures continued
GHG emissions impact by strategy in 2022 (tCO2e)
Based on US$10 million invested, companies held in Impax strategies contributed to:
Benchmarks
Global economy9
2˚C scenario (2030)10
1.5˚C scenario (2030)10
Sustainability Lens strategies
Asian Opportunities
Global Opportunities
US Large Cap
US Small Cap
Environmental Markets strategies
Asian Environmental
Climate
Leaders
Specialists
Sustainable Food
US Environmental Leaders
Water
Fixed Income strategies
Core Plus Bond
Sustainable Infrastructure strategies
Sustainable Infrastructure (active)2
New Energy3
-6,000
-5,000
-4,000
-3,000
-2,000
-1,000
0
1,000
2,000
3,000
4,000
5,000
6,000
CO2 avoided (tCO2)
Scope 1 & 2 CO2 emitted
Scope 3 CO2 emitted
There can be no assurance that impact results in the future will be comparable to the results presented herein.
Impax impact calculations are based on strategy AUM and portfolio holdings as at 31 December 2022.
9 Source: Impax calculations based on estimated global assets under management in 2021 (source: Financial Stability Board. 2022: Global Monitoring Report
on Non-Bank Financial Intermediation 2022) and estimated global GHG emissions in 2021 (source: Our World in Data, 2023: Greenhouse Gas Emissions).
The emissions intensity figure is derived by dividing the adjusted global GHG emissions figure by the global AUM figure.
10 Source: Impax calculations 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 2021 global AUM figure (source: Financial Stability
Board (FSB), 2022: Global Monitoring Report on Non-Bank Financial Intermediation 2022) using the compound annual growth rate in global AUM between
2002 and 2021. The 1.5°C-aligned and 2°C-aligned global GHG emissions figures are calculated by reducing 2010 global emissions (source: Our World in
Data, 2023: Greenhouse Gas Emissions) 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.
Annual Report and Accounts 2023
81
Financed emissions
Financed GHG emissions and weighted average carbon intensity
(WACI)
We have gathered all GHG emissions data disclosed by our investee
companies, estimating Scope 1 and 2 emissions where those are not
reported.11 We do not use estimates for Scope 3 emissions, for which
data disclosed by companies remains patchy and we continue to make
the case for stronger reporting.
The table below includes both absolute (tonnes of CO2 equivalent
(tCO2e)) and intensity-based metrics for active listed equities strategies,
which accounted for 89% of total AUM, as at 31 December 2022.
Scope 1 & 2 emissions
Scope 3 emissions
Carbon footprint (Scope
1, 2 & 3)
WACI (Scope 1 & 2)
WACI (Scope 1, 2 & 3)
Unit
tCO2e
tCO2e
tCO2e/US$1mn
invested
tCO2e/US$1mn
invested
tCO2e/US$1mn
invested
Listed equities
(2022)
Listed equities
(2021)
3.0 million
7.4 million
3.6 million
6.8 million
257
131
456
200
150
448
Source: Scope 1, 2, and 3 emissions data gathered and estimated as part of the Impax Impact Report 2023
for active listed equities assets.
We also gathered emissions data for our private equity investments,
which comprised 1% of AUM, as at 31 December 2022. Scope 1, 2 and 3
emissions totalled 24,368 tCO2e.12 The carbon footprint of private equity
investments, was 36 tCO2e per US$1 million invested.
The carbon footprint for fixed income investments, which comprise 3%
of Impax AUM, was 67 tCO2e per US$1 million invested.13
Investment-related targets
Impax’s net-zero target and
commitments
The NZAM initiative, which Impax
joined in 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.
In November 2022, Impax made
its initial target disclosure under
the NZAM initiative. Our aim is for
100% of committed AUM to be
climate resilient and for investee
companies to be ‘transition
aligned’ or ‘transition aligning’
in their climate management
and processes by 2030. In this
context, ‘transition aligned’ also
includes the need to adapt to
climate impacts. At least 50% of
committed AUM will be classified
as ‘transition aligned’ by 2030.
Impax’s approach is informed
by the PAII Net Zero Investment
Framework and is influenced
by the Science Based Targets
initiative (“SBTi”) Portfolio
Coverage Approach.14
11 67% of the active listed equities holdings assessed as part of our most recent impact reporting reported Scope 3 emissions data that were used in
our calculations.
12 This data represents a combination of actual GHG data collected directly from investee companies and estimated life-cycle emissions data. Life-cycle
emissions are an estimate of the emissions generated over the life of a specific technology, calculated using a technology emissions factor. For example,
the life-cycle emissions of a solar park consider raw material inputs, construction, operation and end of life. It is not possible to split life-cycle emissions out
between Scope, 1, 2 and 3 at this stage. The source for the solar emissions factor 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’. The source for
wind is taken from turbine manufacturers, where this is not available the Investment Manager uses the Intergovernmental Panel on Climate Change report
mentioned previously as it also provides technology factors for wind. For hydropower, the Investment Manager uses hydroelectric emissions factors
published by the Norwegian Water Resources and Energy Directorate (“NVE”).
13 This is based on emissions for corporate fixed income assets held within the Impax Core Bond Plus strategy.
14 IIGCC Paris Aligned Investment Initiative, Net Zero Investment Framework 1.5°C Implementation Guide.
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Impax Asset Management Group plc
Climate-related Disclosures continued
Stewardship and Advocacy-related metrics
Transition alignment of portfolio companies
Impax believes investors’ transition plans should accelerate the net-
zero transition in the real economy, rather than focusing on portfolio-
level decarbonisation, which does not in itself lead to any reduction in
global GHG emissions. Stewardship, including engagement with our
companies, effective proxy voting and policy advocacy are therefore
critical tools in achieving net-zero goals with real economy impact.
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 Framework and influenced by the SBTi Portfolio Coverage
Approach. The approach is also aligned with the GFANZ Financial
Institution Net-zero Transition Plan (“NZTP”) guidance.15 Aligned climate
management processes include appropriate climate risk pricing, robust
climate target-setting (for example, approved the SBTi targets) and
TCFD-aligned climate reporting.
The distribution of committed AUM in the categories outlined above, as
of 31 December 2022, stood at:16
‘Transition aligned’ and ‘aligning’ climate management
& processes
2022
2021
92%
92%
‘Transition non-aligned’ climate management & processes
8%
8%
Impax’s initial commitment under
the NZAM initiative consists of all
actively managed listed equities
and private equity investments,
which represented 92% of AUM
as of 31 December 2021. As of
31 December 2022, actively
managed listed equities and private
equity investments represented
90% of AUM. Over time we plan
to increase the proportion of AUM
committed, striving to also include
Fixed Income and Systematic
Listed Equities.
We are pursuing our NZAM
target, for 100% of committed
AUM to be climate resilient and
for investee companies to be
‘transition aligning’ in their climate
management and processes by
2030 through stewardship and
advocacy activities aimed at real
economy GHG reduction and
impact. We are engaging with all
in-scope companies not aligned
to net zero. We have incorporated
an approach for influencing our
companies not yet transition
aligned in our stewardship
strategy, including company
engagement, policy advocacy
and proxy voting as levers for
change. We encourage companies
to hone their management of and
transparency around climate-
related risks within the transition
to a more sustainable economy.
15 GFANZ, November 2022: Financial Institution Net-zero Transition Plans: Fundamentals, Recommendations, and Guidance.
16 Impax analysis, as at 31 December 2022. These calculations are based on AUM included towards Impax’s target under the NZAM initiative. Please note that
this data has not been externally assured.
In addition to tracking the
percentage of ‘non-aligned’
AUM in regard to net zero and
climate resilience, we monitor
the companies that are ‘non-
aligned’ for stewardship purposes.
One year on from our baseline
assessment against this target, the
percentage of AUM categorised
as ‘non-aligned’ has marginally
decreased, while the number of
companies in this category has
slightly increased.
In the latest assessment of our
holdings’ net-zero alignment,
we found higher levels of ‘non-
alignment’ among smaller
companies and companies
based in Asia, compared to our
benchmark assessment. This is due
to their climate risk management
processes and disclosures often
being less mature, in contrast
to a general trend of gradual
improvement in climate risk
management practices. Results
at the portfolio level over shorter
time horizons may also vary
due to portfolio construction
and turnover.
Annual Report and Accounts 2023
83
Climate-focused engagements during 202217
Percentage of total engagements focused on climate-
related issues
Proxy voting outcomes during 202217
Climate-related shareholder proposals supported
33%
97%
Shareholder proposals have
evolved from a focus on
disclosures to requests that
companies commit to more
concrete actions on GHG emission
reduction targets and net-zero
alignment, fossil fuel financing and
lobbying alignment. We supported
97% of climate-related shareholder
proposals in 2022.
Impax believes that oversight
of climate risk resides primarily
with the board committees and
directors responsible for risk and
audit. When we identify companies
that have not yet taken meaningful
steps to address climate risks with
resilient and transition-aligned
management processes, we will
generally vote against members
of the Audit Committee.
Stewardship and Advocacy-
related targets
Climate-focused stewardship and
advocacy work
Climate risks are systemic for all
companies, so both transition and
physical climate risks are important
topics of our stewardship and
advocacy activities. Our climate-
related advocacy activity in 2022
was focused on three themes:
• Financing the net-zero transition
in the real economy
• Greening the financial system
• Guidance on net-zero transition
planning
Our most significant climate-
focused advocacy initiatives
during the Period are detailed
on pages 75 and 76 under ‘Risk
Management’.
Increasingly, proxy voting has
become an important lever in
advancing climate issues with
companies. Climate was once
again a major focus in the 2022
proxy season.
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Impax analysis, as at 31 December 2022. Please note that this data has not been externally assured.
84
Impax Asset Management Group plc
Climate-related Disclosures continued
OPERATIONS
Operational metrics
Company GHG emissions for the Period (12 months to
30 September 2023)
2023
(tCO2e)18
2022
(tCO2e)
Change
(%)
Change
tCO2e/
FTE (%)
21
31
31
5
-32
538
-39
479
Change
tCO2e/
AUM
(%)
-35
509
465
340
517
376
37
38
24
25
31
31
Direct (Scope 1, natural gas)
Indirect (Scope 2, electricity
consumed, market-based
approach)
Value chain (Scope 3, business
travel)
Impax total (market-based
approach)
The Company’s total global
energy consumption over the
Period was 445 MWh, down
10% compared to the previous
Period.19 This was primarily driven
by reduced gas consumption in
our New Hampshire office, due
to a warmer-than-average winter.
Our London and New Hampshire
offices accounted for 49% and
47% of total energy consumption,
respectively.
The Company’s total carbon
footprint (Scopes 1, 2 and 3)
increased 38% during the Period.
This was primarily driven by the
increase in business travel, up
37% compared to the previous
Period.20 The increase in business
travel related emissions stems to
a large degree from travel that
had been put on hold during the
pandemic. Market-based Scope
2 emissions increased due to the
unexpected ceasing of operations
of our renewable energy provider in
New Hampshire. Our Japan office
opened during the Period and has
been added to our reporting scope.
Operational targets
Company environmental 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). The Company-
wide figure stood at 64% at the
end of the Period, lower than
the previous reporting period
due to the unexpected winding
down of our renewable energy
provider in New Hampshire.
We have since switched to an
alternative renewable energy
provider, as at October 2023.
• Scope 3 emissions target: Air
travel has historically been
Impax’s largest source of
operational 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
in the process of developing
a target to reduce Scope 3
business travel emissions.
18 These FY2023 operational carbon emissions figures have been externally assured by ERM Certification and Verification Services Limited ("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 565 tCO2e.
19 Reporting in line with Streamlined Energy and Carbon Reporting requirements (“SECR”). This total global energy consumption figure has been externally
assured by ERM CVS.
20 Scope 3 business travel emissions: All air travel and UK/European rail travel distance data provided by our third-party corporate travel provider for FY2023
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, Tokyo and Dublin offices (equivalent to 62%
of firm-wide full-time equivalent employees). Emissions associated with UK and European rail travel have been captured but we have not currently been able
to capture US-based rail travel with 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.
Annual Report and Accounts 2023
85
Independent Limited Assurance Report to Impax Asset Management
ERM Certification and Verification Services Limited (“ERM CVS”) was engaged by Impax Asset
Management Limited (“Impax”) to provide limited assurance in relation to the selected information as set
out below and presented in Impax Asset Management Group plc’s Annual Report 2023 (the “Report”).
Scope of our
assurance
engagement
Whether the data for the following selected disclosures are fairly presented
on page 84 of the Report, in all material respects, in accordance with the
reporting criteria.
Engagement summary
• 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)
Our assurance engagement does not extend to information in respect of earlier
periods or to any other information included in the Report.
Reporting period
1 October 2022 – 30 September 2023.
Reporting criteria
• WBCSD/WRI GHG Protocol (2004, as updated January 2015) as relevant for
Assurance standard
and level of assurance
the Scope 1, 2 and Scope 3 GHG emissions data.
• Streamlined Energy Carbon Reporting (SECR) requirements for the Total
global energy consumption data.
We performed a limited assurance engagement, in accordance with the
International Standard on Assurance Engagements ISAE 3000 (Revised)
‘Assurance Engagements other than Audits or Reviews of Historical
Financial Information’ issued by the International Auditing and Assurance
Standards Board.
The procedures performed in a limited assurance engagement vary in nature
and timing from, and are less in extent than for a reasonable assurance
engagement and consequently, the level of assurance obtained in a limited
assurance engagement is substantially lower than the assurance that would have
been obtained had a reasonable assurance engagement been performed.
Respective
responsibilities
Impax is responsible for preparing the Report and for the collection and
presentation of the information within it, and for the designing, implementing
and maintaining of internal controls relevant to the preparation and presentation
of the Report.
ERM CVS’ responsibility is to provide conclusions to Impax on the agreed scope
based on our engagement terms with Impax, the assurance activities performed
and exercising our professional judgement.
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Impax Asset Management Group plc
Climate-related Disclosures continued
OUR CONCLUSION
Based on our activities, as
described overleaf, nothing has
come to our attention to indicate
that the 2023 data for the
disclosures listed under ‘Scope’
above are not fairly presented
in the Report, in all material
respects, in accordance with the
reporting criteria.
EMPHASIS OF MATTER
Without affecting our conclusion,
which is not modified, we draw
attention to the explanatory
Footnote 20 provided by Impax
on page 84 of the Report relating
to the completeness of and
limitations around data collection
processes for certain Scope 3
GHG emissions for Category 6:
Business Travel.
OUR ASSURANCE ACTIVITIES
Considering the level of assurance
and our assessment of the risk
of material misstatement of the
selected disclosures, a multi-
disciplinary team of sustainability
and assurance specialists
performed a range of procedures
that included, but was not
restricted to, the following:
• Assessing the appropriateness
of the reporting criteria for the
selected disclosures.
• Assessing conversion
and emission factors and
assumptions used.
• Interviews with management
representatives responsible for
managing the selected data.
• Interviews with relevant staff
to understand and evaluate the
relevant management systems
and processes (including
internal review and control
processes) used for collecting
and reporting the selected
disclosures.
• A review at corporate level
of a sample of qualitative
and quantitative evidence
supporting the reported
information.
• An analytical review of the
year-end data submitted by
Impax’s offices included in
the consolidated 2023 data
for the selected disclosures
which included testing the
completeness and mathematical
accuracy of conversions and
calculations, and consolidation
in line with the stated reporting
boundary.
• 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
information is subject to inherent
uncertainties, given the available
methods for determining,
calculating or estimating the
underlying information. Our
assurance activities did not
include assessing or auditing any
financial information relating to the
value of Impax’s investments or
individual holdings. It is important
to understand our assurance
conclusions in this context. Our
work was undertaken virtually at
Impax’s Head Office in the UK.
Annual Report and Accounts 2023
87
ERM CVS has extensive experience
in conducting assurance on
environmental, social, ethical and
health and safety information,
systems and processes, and
provides no consultancy
related services to Impax Asset
Management Group plc in
any respect.
Gareth Manning
Partner, Corporate Assurance
London, United Kingdom
27 November 2023
ERM Certification and Verification
Services Limited
www.ermcvs.com | post@ermcvs.com
OUR INDEPENDENCE,
INTEGRITY AND QUALITY
CONTROL
ERM CVS is an independent
certification and verification
body accredited by UKAS to
ISO 17021:2015. Accordingly
we maintain a comprehensive
system of quality control,
including documented policies
and procedures regarding
compliance with ethical
requirements, professional
standards, and applicable legal
and regulatory requirements.
Our quality management system
is at least as demanding as the
relevant sections of ISQM-1 and
ISQM-2 (2022).
ERM CVS applies a Code of
Conduct and related policies to
ensure that its employees maintain
integrity, objectivity, professional
competence and high ethical
standards in their work. Our
processes are designed and
implemented to ensure that the
work we undertake is objective,
impartial and free from bias and
conflict of interest. Our certified
management system covers
independence and ethical
requirements that are at least
as demanding as the relevant
sections of Parts A & B of
the IESBA Code relating to
assurance engagements.
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Impax Asset Management Group plc
Risk Management and Control
Enterprise Risk Management
Impax recognises that understanding and managing risk is essential
in driving the delivery of good outcomes for all stakeholders.
HOW WE MANAGE RISK
Risk governance
Impax operates its business
across ‘three lines of defence’,
with first line business functions
identifying, assessing and
managing and reporting on risk
in day-to-day operations. The
second line comprises our ERM
and Compliance teams, who
are independent from the first
line teams, and who monitor
the activities of the first line,
reviewing, monitoring, testing
and challenging the controls
established to manage risks,
and providing assurance on risk
management by the first line.
Third line assurance is provided by
Internal Audit (Impax has engaged
an independent third-party firm
to provide these services), who
provide assurance on the risk
management framework and
internal control environment.
Impax’s ERM 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 ERM team provide
reports to the ERC and 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 is
externally audited each year and
documented in an 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.
Impax has established a risk
management framework which
sets out the overall approach to
the management of internal and
external risks to which we are
exposed now or may be exposed
to in the future.
Impax subsidiaries operate in a
highly regulated industry, with
risk management and regulatory
compliance a fundamental of day-
to-day business activities.
During the Period, Impax, through
the Board and the Audit & Risk
Committee (“ARC”), has built
on the existing risk management
framework with the objective
being to improve and enhance
the framework.
Key improvements included the
expansion of the Enterprise Risk
Management (“ERM”) team, with
the addition of investment and
enterprise risk specialists. This
year also saw risk governance
evolve, with the establishment of a
management level Enterprise Risk
Committee (“ERC”), chaired by the
Chief Risk Officer (“CRO”), with
responsibility for oversight of risk
management across all subsidiaries
and business functions, reporting
directly to the ARC and Company’s
and subsidiaries’ Boards on
risk topics.
Annual Report and Accounts 2023
89
FIRST LINE:
Business units
SECOND LINE:
Risk and compliance
THIRD LINE:
Internal Audit
• Involved in day-to-day risk
• Oversee and challenge first
• Review first and second
management
line risk management
lines
• Follow a risk process
• Provide guidance and
• Provide an independent
• Apply internal controls and
risk responses
direction
• Maintain enterprise risk
management framework
perspective and challenge
the process
• Objective and offer
assurance
Risk Appetite
Impax has identified principal risks (see page 90) and has documented its appetite for each in a Risk
Appetite Statement. This is reviewed at least annually by ERC and ARC with recommendations presented
to the Boards and regulated entities for review and approval. The Risk Appetite Statement confirms the
acceptable levels of risk which have been agreed. Risk monitoring by the ERM team is designed to identify
instances where risks are tracking outside of agreed appetites, escalating these instances and agreeing
actions to bring risks back within agreed appetite.
Risk Management
Identified risks are assessed to determine the likelihood and impact of the risk, and to consider the financial,
regulatory, reputational or other potential impacts and factors. Risks are typically managed with agreed
internal controls, which are designed to reduce the likelihood of that risk occurring and the potential impact.
Risks are monitored on an ongoing basis to ensure our controls are operating effectively and risks remain
within acceptable levels.
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Impax Asset Management Group plc
Risk Management and Control continued
PRINCIPAL RISKS
The principal risks that the Company faces are noted below together with the respective mitigants:
Risk type
Definition
How we mitigate risk
Strategic Risk
Strategic risks relate to factors that
could prevent Impax from fulfilling its
strategic objectives.
The Company closely monitors the performance of its executed
strategy and focuses additional resources where potential
deviations from plans during execution are identified in order to
remain on track or to establish new directions.
Regulatory
Risk
This risk refers to the failure to comply
with regulatory obligations.
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.
Financial Risk
Operational
Risk
Financial risk refers to the risks which
could result in the loss of money or
failure of Impax to meet its financial
and regulatory obligations.
The Company closely monitors its profitability, cash balances,
impending liquidity requirements and the financial health of its
counterparts within regulatory frameworks to prevent and react
promptly to any associated issues.
Operational risk is defined as the
risk of direct or indirect losses, or of
reputational damage, arising from
inadequate or failed internal processes,
people and systems or resulting from
external events.
The Company's controls framework is designed to minimise
losses from operational failure and to reduce the risk of: business
disruptions; software and hardware failures; compromised IT
security/data breaches including Cyber attacks. The Company
considers and seeks to manage physical climate risk within its
operational risk management framework. Impax maintains crisis
management plans with defined responses to initiate business
contingency plans and recovery procedures. For the UK Listed
Equities Business, the company obtains annual ISAE 3402
assurance. The Company has insurance cover which is reviewed
each year prior to policy renewal. The Company considers and
seeks to manage physical climate risk within its operational risk
management framework.
Annual Report and Accounts 2023
91
Risk type
Definition
How we mitigate risk
Market Risk
The Company charges management
fees based on AUM and accordingly its
revenue is exposed to market risk.
The Company seeds investments in
its own funds and is therefore directly
exposed to the market performance of
the funds.
The Company operates a number of different strategies which
themselves are diversified by geography and industry. The
Company's investment teams adhere to defined investment
processes. Oversight of the impact of market risk on investment
activity is ongoing and involves the investment teams, the ERM
team and the Company's Investment Committees, Enterprise Risk
Committee and the Audit and Risk Committee. Oversight of seeded
investments involves the Company's Treasury Committee.
Investment/
Liquidity Risk
Investment risk refers to the possibility
that inappropriate levels of exposure
to investment risk (including climate
and sustainability risk) is taken or
accepted resulting in poor outcomes
for investors.
We actively monitor investment and liquidity risk of individual
stocks, portfolios and at a strategy level. Liquidity risk in the
context of Impax funds has been managed consistently during
the Period despite the ongoing market disruptions. The Company’s
approach to managing liquidity is outlined in the Financial
Risk section.
Liquidity Risk is the risk of a failure to
ensure there is appropriate liquidity
to meet redemption that could be
reasonably expected.
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Impax Asset Management Group plc
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
• The impact of the Company’s operations on the
long term.
community and the environment.
• The interests of the Company’s staff.
• The desirability of the Company maintaining a
• 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.
reputation for high standards of business conduct.
• The need to act fairly as between members of
the Company.
STAKEHOLDER: SHAREHOLDERS
Our approach
2023 highlights
We are committed to full disclosure and clear communications
with institutional and private shareholders and hold meetings
throughout the year.
Revenue for the Period increased by £3.0 million to
£178.4 million.
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.
AUM up by 4.8% to £37.4 billion.
Adjusted operating profits fell by 13.8% to £58.1 million.
Adjusted operating margin was down to 32.6%.
Adjusted diluted EPS fell to 35.2 pence.
Total dividend for the Period flat compared to 2022.
Engaged with shareholders on new remuneration approach.
Work with brokers extended, including deeper engagement
with institutional investors in continental Europe. We continue
to engage with groups including Equity Development, Mello
Events and Shares/AJ Bell to support our interaction with
private investors.
Annual Report and Accounts 2023
93
STAKEHOLDER: CLIENTS
Our approach
2023 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 launched a new Sustainable Infrastructure (active) Listed
Equities strategy. After the Period end, we plan shortly to add
our US Environmental Leaders strategy to our Ireland-based
UCITS range and launch a strategy targeting Social themes.
We have built our fixed income offering, with significant hires
and product development.
We have continued to advance our impact reporting. This
includes a new metric for healthy and nutritious food. We are
also developing metrics related to social impact and biodiversity.
We conduct fundamental analysis which incorporates long-term
risks, including Environmental, Social & Governance
(“ESG”) factors.
We engaged a third-party organisation to carry out our first
client survey, with 90% of clients reporting a positive view
of Impax.
We focus on four areas broader beyond financial returns:
corporate engagement and stewardship; environmental
and social impact reporting; policy and advocacy; and
publishing research.
After the Period end we launched the Impax Sustainability
Centre, which brings together our Sustainability & Stewardship
and Policy & Advocacy teams to focus the Company’s resources
in this area.
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.
We have a data breach procedures in place and use external
security operations to monitor our network.
We’ve expanded our distribution resources in Australia, the
Nordics, Latin America, the US and Canada and opened a new
office in Japan.
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Impax Asset Management Group plc
Engaging with our Stakeholders continued
STAKEHOLDER: COLLEAGUES
Our approach
2023 highlights
We seek to offer a stimulating, collaborative, and supportive
workplace for our people.
90% employee engagement score and 97% aligning with Impax’s
mission, culture and values.
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, 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 at all levels of
the Company.
We are signatories of Women in Finance and Race at Work.
We learn from and act on the feedback from our colleagues.
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 that
is readily accessible 24 hours a day and provided by an
external supplier.
We maintain a low staff turnover (10%) relative to peers.
We undertook a benchmarking exercise, refined and updated
our E,D&I goals, including gender and ethnicity, for the total
Company and at Senior level.
As at year end, 47% of staff are female, close to our 2025 target
of 48% - 52%. 25% are minority ethnic. 54% of promotions
and 49% of new hires during the Period were women. 23% of
promotions and 25% of new hires were minority ethnic.
We ran our first global ‘Impax Values Awards’ to recognise and
celebrate colleagues’ success and cement Impax’s culture.
We implemented a new HR system to support recruitment, talent
development and performance evaluation and to assist in the
management of personal data. Introduced new development tool
provided by LinkedIn Learning.
We supported the City Hive Cross Company Mentorship
Programme in association with #TalkAboutBlack.
Annual Report and Accounts 2023
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STAKEHOLDER: DISTRIBUTION PARTNERS
Our approach
2023 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.
Significant contributions in Global Opportunities from St James’s
Place, and via Formuepleje in Denmark and Desjardins in Canada.
We signed a distribution agreement with BTG Pactual US Capital
to target clients in Latin America.
In the US, we increased the availability of the Impax mutual fund
range on several of the largest wealth management platforms
and are now able to offer the investment strategies underlying
these funds both as collective investment trusts and separately
managed accounts.
STAKEHOLDER: INVESTEE COMPANIES
Our approach
2023 highlights
We are long-term investors and develop strong relationships
with many of our holding companies. We conduct deep, ongoing
research into all areas of their businesses.
We took part in 160 engagement dialogues in 2022, with 43%
positive outcomes.
We engage with companies to minimise risks, protect
shareholder value, promote greater transparency and encourage
companies to become more resilient over time.
We have recently started combining company engagement
and our policy advocacy activities, seeking to shape company
practices through regulatory or policy change and focusing our
activities on four pillars: climate, nature, people and governance.
See page 50 for more information.
We take a supportive rather than activist approach and often
work in collaboration with other asset managers or organisations.
We were a successful applicant to the UK Stewardship Code.
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Impax Asset Management Group plc
Engaging with our Stakeholders continued
STAKEHOLDER: EXTERNAL SERVICE PROVIDERS
Our approach
2023 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 implemented a number of new systems, working closely with
service providers. This included:
We moved our customer relationship management system
to Salesforce in order to establish a scalable platform for
client relations.
We extended our data management capabilities and automated
some processes within the middle office.
We implemented a new HR system to support recruitment, talent
development and performance evaluation and to assist in the
management of personal data.
New cybersecurity detection methods; increased staff education.
STAKEHOLDER: COMMUNITY AND THE ENVIRONMENT
Our approach
2023 highlights
As of 31 December 2022, 64% of Impax’s AUM were invested in
assets that we assess to be ‘climate solutions’.
We significantly expanded our community activity during the
Period, donating £504,933 (2022: £287,382) to charitable causes.
Developed new community partnerships with Country Trust and
Groundwork UK, and launched the Pax Scholarship programme,
in New Hampshire.
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.
Annette Wilson is the Board Sponsor of the Environment Group.
We are members of the Net Zero Asset Managers Initiative.
Impax partners with organisations aligned with our focus on the
transition to a more sustainable economy, focusing on green
skills and education.
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. Our aim is that by the end of 2025, we would donate
1% of after-tax profits to charitable causes.
Annual Report and Accounts 2023
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STAKEHOLDER: INDUSTRY-WIDE GROUPS
Our approach
2023 highlights
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 212.
During the Period we participated in a number of collaborative
initiatives. We have also recently started combining company
engagement and our policy advocacy activities, seeking to shape
company practices through regulatory or policy change. See
Impax Stewardship and Advocacy Report 2023 for full details.
We recently launched the Impax Sustainability Centre to
coordinate our activity in this area.
STAKEHOLDER: FINANCIAL INDUSTRY REGULATORS
Our approach
2023 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 consultation paper on Sustainable Disclosure
Requirements and investment labels and the FCA’s discussion
paper ‘Finance for positive sustainable change: governance,
incentives and competence in regulated firms’.
The Taskforce for Nature-related Financial Disclosures proposed
framework for nature-related disclosures.
The European Supervisory Authorities’ review of proposed
regulatory technical standards on disclosures under the
Sustainable Finance Disclosure Regulation.
The Stock Exchange of Hong Kong’s consultation on climate-
related disclosures under its ESG Framework.
The US Office of Management and Budget’s proposed guidance
on assessing changes in environmental and ecosystem services
in benefit-cost analysis.
The Accounting and Corporate Regulatory Authority/Singapore
Exchange’s consultation on recommendations to advance
climate reporting in Singapore.
Ian R Simm
Chief Executive
28 November 2023
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Impax Asset Management Group plc
Governance
Governance at a Glance
Chair’s Introduction
Board of Directors
Corporate Governance Report
Directors’ Report
Audit & Risk Committee Report
100
101
106
110
116
119
Remuneration Committee Report
123
Annual Report and Accounts 2023
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“ In a year of significant
external challenges,
Impax has demonstrated
its resilience.”
Sally Bridgeland
Chair
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Impax Asset Management Group plc
Governance at a Glance
Highlights
Read more in our Chair’s Introduction on page 101
6Board meetings
held during
the year
(2022: 8)
100%
Board meeting
attendance for
scheduled meetings
(2022: 96%)
90%
Employee
engagement
score for 2023
(2022: 89%)
Board of Directors
See our Board of Directors and biographies on page 106
Composition of the Board
Gender diversity
Non-Executive Directors' tenure
Executive Directors: 2
Non-Independent Non-Executive
Directors: 1
Independent Non-Executive
Directors: 4
Governance highlights
Female Board Members: 4
Male Board Members: 3
0–3 years: 2
3–6 years: 1
6–9 years: 2
Corporate Governance
Audit & Risk
Remuneration
• Lindsey Brace Martinez and Sally Bridgeland to
• The Group enhanced its approach to Enterprise
• Rolled out two-part scorecard approach,
step down from the Board in July 2024.
Risk Management.
• Simon O'Regan set to become Chair, subject to
• Appointment of a dedicated Chief Risk
approvals and re-election.
• Julia Bond has joined as a Non-Executive
Director effective 29 November 2023.
Officer and hire of investment and enterprise
risk specialists.
• Alison Allen appointed as KPMG external
and junior employees.
audit partner following partner rotation after
five years.
with weighted objectives for all employees.
• Detailed review of and additional measures
for Executive Directors.
• New 'target bonus' framework for mid-level
Read more on page 110
Read more on page 119
Read more on page 123
Annual Report and Accounts 2023
101
Chair’s Introduction
“Impax has demonstrated
its resilience.”
Sally Bridgeland
Chair
RESILIENCE AND
STRENGTH IN A
CHALLENGING YEAR
In a year of significant external
challenges, Impax has demonstrated
its resilience, reporting a headline
4.8% rise in the Company’s assets
under discretionary and advisory
management to £37.4 billion, driven
by investment performance and
strong client retention.
MEETINGS
6
The Board held six formal
meetings during the Period,
devoting significant time to
strategic discussion in order
to consider fully a range
of business development
opportunities.
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Impax Asset Management Group plc
Chair’s Introduction continued
The Company reported an expansion in revenue
of £3.0 million to £178.4 million, but continued its
investments in additional resources, capabilities
and systems within Distribution, Investments, and
Corporate Services, leading to adjusted operating
profit decreasing 13.8% to £58.1 million.
The Company achieved notable success during the
Period in attracting and retaining clients, launching
new products and expanding its distribution
channels, including opening an office in Japan.
Importantly, the management team has focused
its attentions on laying the groundwork to position
the business for future success and further growth
when market sentiment improves. This has included
building new capabilities in fixed income, investing
in systems and, through changes to remuneration
policy, promoting a culture of accountability and
high performance.
STRATEGY
The Board held six formal meetings during the
Period, devoting significant time to strategic
discussion to consider fully a range of business
development opportunities and risks.
In June, the Non-Executive Directors attended a
strategy day with the senior management team.
This included a discussion of the wider market
environment and the Company’s position within it;
Impax’s distribution strategy; the implications of
artificial intelligence on the Company; planned new
listed equities products; and opportunities within
fixed income.
FOCUS ON PEOPLE AND CULTURE
The Board has been encouraged by the strategic
approach that the management team has continued
to take to engaging with employees. This is borne out
by the overall employee engagement score of 90%
this year, an increase since 2022, and Impax once
again being rated as a 5-star employer by WorkBuzz,
the survey organiser.
The Company has significantly moderated its
headcount growth during the Period and focusing
on talent development and ensuring that processes
and systems are efficient and scalable. In addition
to supporting the new approach to performance
evaluation outlined below, the Company has
enhanced its training and development programmes
and supported employee engagement initiatives to
further enhance the Company’s culture.
As one example, in September 2023, I was pleased
to join my Board colleagues in presenting at the
first global Impax Values Awards. Recognising
and celebrating colleagues’ success, the Awards
are designed to cement Impax’s culture and bring
colleagues together as the business continues to
grow. With more than 125 nominations received,
we heard some truly outstanding examples of how
colleagues are representing Impax’s core values on
a day-to-day basis.
REMUNERATION AND INCLUSION
We have continued to strengthen our remuneration
policies and disclosures and will once again put the
Directors’ Remuneration Report to advisory vote at
the AGM. We have received valued feedback from
shareholders during the Period and continue to
engage with them on this topic.
This year we rolled out a two-part scorecard
approach, with weighted objectives for all employees,
taking into account business and functional
performance as well as collaboration and cultural
factors. This, together with the introduction of a
target bonus framework, provides more clarity on the
link between performance and pay outcomes.
Our approach to Executive Directors’ remuneration
has developed even further, introducing a cap on
variable pay, deferral of bonuses and minimum
shareholding requirements. For the next financial
year we will also make more use of quantitative
performance metrics to link remuneration with
strategic objectives. For more information, please see
the Remuneration Report on pages 123-135.
The Company made further progress with its Equity,
Diversity & Inclusion (“E,D&I”) strategy this year. We
have recently launched new goals for gender and
ethnicity, focusing on improving representation firm-
wide and for senior employees in particular. These
goals and our plans to report progress against them,
back up our recent signing of the Women in Finance
and Race at Work charters.
Annual Report and Accounts 2023
103
As a Board we believe that inclusion is vital to
performance and the resilience of the business as
it grows. We have developed expectations for how
Board and Committee meetings are conducted which
deliberately promote and support inclusion at the top
of the organisation. Lindsey Brace Martinez acts as
the Board sponsor and attends the meetings of the
E,D&I group.
As a Board we have discussed the rise in the
gender pay gap over the Period and will work with
management to address its contributing factors.
Please see page 55 of the Strategic Report for more
details on our E,D&I strategy.
RISK MANAGEMENT
During the Period, the Company, through the Board
and the Audit & Risk Committee (“ARC”), has
improved developed and enhanced its approach to
Enterprise Risk Management.
Key improvements have included the expansion
of the Enterprise Risk Management team, with the
addition of investment and enterprise risk specialists.
This year also saw risk governance evolve, with the
establishment of a management-level Enterprise
Risk Committee chaired by the Chief Risk Officer,
with responsibility for oversight of risk management
across all subsidiaries and business functions,
reporting directly to the ARC and the Company and
subsidiary boards.
Managing climate and broader sustainability risks
is a strategic focus for Impax and a priority for the
senior management and Board. The Company is
working to further integrate climate-related risks,
including physical climate risks, into the Enterprise
Risk Framework.
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Impax Asset Management Group plc
Chair’s Introduction continued
CREATING VALUE FOR ALL KEY STAKEHOLDERS
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.
Our approach to climate and the environment is
coordinated by the Environment Group, which
Annette Wilson attends on behalf of the Board. As a
signatory of the Net Zero Asset Managers initiative
(“NZAM”), we support the goal of net-zero emissions
by 2050 or sooner, in line with global efforts to limit
warming to 1.5°C.
We were pleased to see the development of Impax’s
community strategy during the Period, including
the introduction of additional strategic community
partners in the UK and the US and an increase in our
charitable giving of 76% to £504,933.
Please refer to pages 92-97 of the Strategic Report
for more information on our approach to creating
value for all of our key stakeholders, in line with
Section 172 of the Companies Act 2006.
Consistent with a more inclusive and delegated
model, in November 2023 we introduced a new
two-part executive structure that will focus on the
Company’s strategic leadership and management:
the Management Committee and the Senior
Leadership Team. The Management Committee will
be involved in recommending and implementing all
major business decisions, with the Senior Leadership
Team responsible for ensuring that all employees
understand the Company’s strategy.
BOARD MEMBERSHIP
We were pleased to welcome Karen Cockburn to the
Board as an Executive Director in March 2023. Karen
succeeded Charlie Ridge as Chief Financial Officer in
January 2023 and has been a valuable contributor to
the Board’s work programme and deliberations.
Vince O’Brien retired as a Director in March 2023.
I would like to repeat my personal thanks to Vince
for his diligent work as the Chair of the Audit & Risk
Committee and wise counsel to me in his role as our
Senior Independent Director.
OUR COMMITMENT TO GOOD GOVERNANCE
The Directors recognise the importance of strong
corporate governance and continue to apply the
Quoted Companies Alliance Corporate Governance
Code. See page 110 for more information.
In recognition of Impax’s growing scale and
complexity and to ensure that the Company is well
placed for further growth, the Board has undertaken
a review of the Company’s governance model. This
has included the composition and structure of the
Group’s subsidiary boards, committees and working
groups, with final recommendations expected
in 2024.
Following Vince’s retirement, Simon O’Regan
succeeded him as the Senior Independent Director
and as the Board’s Whistleblowing Champion.
Annette Wilson has succeeded Vince as Chair of the
Audit & Risk Committee and as Board Sponsor of the
Environment Group.
At the end of July 2024, in line with UK corporate
governance best practice, Lindsey Brace Martinez
and I will step down from the Board on the ninth
anniversary of joining. On behalf of the Board, I would
like to thank Lindsey for her significant contribution
to the Impax Board and chairing of the
Remuneration Committee.
Annual Report and Accounts 2023
105
I am delighted to announce that Simon O’Regan
has agreed, subject to his re-election as a Director
at the Company’s AGM in March 2024, to succeed
me as independent Non-Executive Chair with effect
from 31 July 2024, upon which Simon will also cease
to be a member of the Audit & Risk Committee.
Simon’s appointment as Chair is subject to regulatory
approval. Simon joined the Board in December 2020
and has the commitment and experience to make an
excellent Chair.
Annette Wilson, who joined the Board in June 2022,
will succeed Simon as Senior Independent Director
and Whistleblowing Champion, with effect from
31 July 2024.
I’m very pleased to welcome Julia Bond as a Non-
Executive Director of the Company, effective 29
November 2023. Julia will serve as a member of the
Remuneration and Audit & Risk Committees and
it is contemplated that Julia will become Chair of
the Remuneration Committee when Lindsey leaves
the Board. We are currently interviewing US-based
candidates with a view to appointing a new US-based
Non-Executive Director over the next few months
and will provide an update in due course.
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 2023 of
22.9p, a total for the year of 27.6p, representing 78%
of adjusted profit after tax and a flat total dividend
relative to the 2022 payout.
Further details are provided In the Financial Review
on pages 22-25 of the Strategic Report.
ENGAGEMENT AND OUR AGM
We continue to engage Peel Hunt and Berenberg as
our joint brokers in order to maintain our contact with
institutional investors. We also work with providers
including Equity Development, Mello Events and
Shares/AJ Bell to support our interaction with
private investors.
Our next AGM will take place on 12 March 2024.
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.
As this is my final annual report as Impax’s Chair,
I would like to thank the Board and the team for
their support and hard work since I joined the Board
in 2015. It has been a delight to see the growth
in popularity of Impax’s approach to investing in
the transition to a more sustainable economy, and
to witness the impact that we have been able to
make as a result of the increase in our assets under
management. I have enjoyed seeing the business
position itself for sustainable growth and wish it
every success in the future.
Sally Bridgeland
Chair
28 November 2023
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106
Impax Asset Management Group plc
Board of Directors
Sally
Bridgeland
Chair
Joined the Board 2015
Appointed Chair 2020
Ian Simm
Founder &
Chief
Executive
Joined the Board 2001
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,
and a non-executive director of Local Pensions
Partnership Ltd.
External appointments
Non-executive director, Pension Insurance
Corporation plc, Royal & Sun Alliance Insurance
Limited, and Royal London. Chair of BelleVie Care
Limited. Serves as Honorary Group Captain with 601
Squadron of the Royal Auxiliary Air Force. Strategic
adviser to Darwin Alternatives.
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 investment
and insurance sector.
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.
External appointments
Member of the UK government’s Energy Innovation
Board and Net Zero Council. 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 and was
appointed as a member of the Cambridge University
Endowment Trustee Body in February 2023.
Qualifications and experience
First class honours degree in physics from
Cambridge University and a Masters in Public
Administration from Harvard University.
Committee membership and other roles
Committee membership and other roles
Remuneration Committee – Member
n/a
Annual Report and Accounts 2023
107
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Lindsey Brace
Martinez
Non-Executive
Director
Arnaud De
Servigny
Non-Executive
Director
Joined the Board 2015
Joined the Board 2018
Previous roles and experience
Previous roles and experience
Lindsey has over 30 years’ experience 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.
External appointments
Founder & Managing Partner of StarPoint Advisors,
LLC; Chair, People and Culture Committee, Onward
Energy; Trustee, Impax Funds Series Trust; and
Director, Seven Islands Lands Company. She
currently serves as the Co-Chair of the Center for
Business and Environment at Yale.
Qualifications and experience
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 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
Non-executive directorships of BNP Paribas Asset
Management France, director of Queens Field SAS
and President of Queensfield AI Technologies.
Qualifications and experience
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
Remuneration Committee – Chair
Audit & Risk Committee – Member
Board sponsor, E,D&I
n/a
108
Impax Asset Management Group plc
Board of Directors continued
Simon O’Regan
Non-Executive
Director
Annette Wilson
Non-Executive
Director
Joined the Board 2020
Joined the Board 2022
Previous roles and experience
Previous roles and experience
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
None
Qualifications and experience
First class honours degree in Management and
Actuarial Studies from University of Cape Town.
Fellow of the Institute 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.
External appointments
Strategic Adviser, Tech Nation. Chair and Trustee,
ADHD Embrace. Chair of Europe and Global Adviser,
Antler VC.
Qualifications and experience
B.Com (Hons), University of Johannesburg.
Fellow of the Institute of Chartered Accountants in
England and Wales.
Committee membership and other roles
Committee membership and other roles
Audit & Risk Committee – Member
Remuneration Committee – Member
Senior Independent Director (from 30 Nov 2022)
Whistleblowing Champion
Audit & Risk Committee – Chair (from 30 Nov 2022)
Audit & Risk Committee – Member
Remuneration Committee – Member
Board sponsor, Environment (from 30 Nov 2022)
Annual Report and Accounts 2023
109
Karen Cockburn
Chief Financial
Officer
Joined the Board
March 2023
Zack Wilson
Group General
Counsel and
Company
Secretary
Assumed roles 2011
Previous roles and experience
Previous roles and experience
Karen is a qualified Chartered Accountant with
over 25 years’ financial and operational experience
in financial services. Before joining Impax in 2022
Karen was transformation Chief Financial Officer at
Virgin Money plc and prior to that she spent nine
years at Aegon in various strategy, transformation
and finance leadership roles, latterly as Chief
Financial Officer of Cofunds. Having qualified with
KPMG, she spent her early career with GE Capital,
a global financial service provider, and Lloyds
Banking Group.
External appointments
Founder and board member of, Legado
Technologies, a digital start-up company.
Qualifications and experience
Fellow of the Irish Institute of Chartered Accountants
and holds a BSc and MSc in Finance/Accounting
from Queen’s University, Belfast.
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
Member of the Advisory Board of Prime Advocates
Limited.
Qualifications and experience
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
Responsible for overseeing the Company's Finance,
Investor Relations, People and Legal functions, as
well as Governance processes.
n/a
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Impax Asset Management Group plc
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 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, highlighting and providing an explanation
in the event of any departures from the provisions
of the Code. 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.
In recognition of the Group's growing scale and
complexity and to ensure that the Company is
well placed for further growth, during the Period
the Board oversaw a review of the Company’s
governance structures, including the composition
and structure of the Group’s subsidiary boards,
committees and working groups, with final
recommendations expected in 2024.
Consistent with a more inclusive and delegated
model, in November 2023 we introduced a new
two-part executive structure that will focus on the
Company’s strategic leadership and management:
the Management Committee and the Senior
Leadership Team. The Management Committee will
be involved in recommending and implementing all
major business decisions, with the Senior Leadership
Team responsible for ensuring that all employees
understand the Company’s strategy.
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, four
Non-Executive Directors, the Chief Executive and the
Chief Financial Officer. Details of the current Board
members are given on pages 106-109 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 leads on
succession planning and skills assessments for the
Board and Executive Director roles.
The Chief Executive 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 for 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 also acts as the Board’s
Whistleblowing Champion. The Board considers that
the Chair (Sally Bridgeland) and three of the Non-
Executive Directors (Lindsey Brace Martinez, Simon
O’Regan and Annette Wilson) are independent as
envisaged by the QCA Code.
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.
Annual Report and Accounts 2023
111
We were pleased to welcome Karen Cockburn to the
Board as an Executive Director in March 2023. Karen
succeeded Charlie Ridge as Chief Financial Officer
in January 2023. Vince O’Brien retired as a Director
in March 2023. Following Vince’s retirement, Simon
O’Regan succeeded him as the Senior Independent
Director and as the Board’s Whistleblowing
Champion. Annette Wilson has succeeded Vince as
Chair of the Audit & Risk Committee and as Board
Sponsor of the Environment Group.
At the end of July 2024, in line with UK corporate
governance best practice, Lindsey Brace Martinez
and Sally Bridgeland will step down from the Board
on the ninth anniversary of joining. Simon O’Regan,
subject to his re-election as a Director at the
Company’s AGM in March 2024, will succeed Sally
as independent Non-Executive Chair with effect
from 31 July 2024, upon which Simon will also cease
to be a member of the Audit & Risk Committee.
Simon’s appointment as Chair is subject to regulatory
approval. Annette Wilson, who joined the Board in
June 2022, will succeed Simon as Senior Independent
Director and Whistleblowing Champion, with effect
from 31 July 2024.
Effective 29 November 2023, Julia Bond joins as a
Non-Executive Director of the Company, Julia will
serve as a member of the Remuneration and Audit
& Risk Committees and it is contemplated that she
will become Chair of the Remuneration Committee
when Lindsey departs. The Company is currently
interviewing US-based candidates with a view to
appointing a new US-based Non-Executive Director.
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 approximately 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 and the
Chief Financial Officer work full time in the
business and have no other significant outside
business commitments.
As at the end of the Period, 57% of the Board
members are female, including the Chairs of the
Remuneration Committee and the Audit & Risk
Committee. 100% of the Board is white; we are
identifying opportunities to address this lack of
ethnic diversity as part of our succession plans.
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. The Committee’s report is provided on
pages 119-122.
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 pages 123-135.
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 can 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.
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Impax Asset Management Group plc
Corporate Governance Report continued
Meeting attendance
Board
Audit & Risk Committee
Remuneration Committee
Total number of meetings
Ian Simm
Vince O'Brien1
Sally Bridgeland
Lindsey Brace Martinez
Simon O'Regan
Arnaud de Servigny
Annette Wilson
Karen Cockburn2
6
6
3
6
6
6
6
6
3
5
7
1 as observer
7 as observer
1 as member, 1 as observer1
3 as member, 1 as observer1
3 as observer
5 as member
5 as member
5 as observer
5 as member
5 as observer
7 as member
7 as member
7 as member
7 as observer
7 as member
6 as observer
1 Director until 16 March 2023.
2 Director from 16 March 2023. Joined Impax November 2022.
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, including
gender and ethnicity, how the Board works as a unit
and other factors relevant to its effectiveness. Where
new Board appointments are considered, as has been
the case during the Period, 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. Last year, the Company
engaged Boardroom Review to carry out its
first external 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. 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.
This year the Chair led a formal evaluation to assess
the performance of the Board and the individual
Directors. The Board also completed an evaluation
of the Chair’s performance which was led by the
Senior Independent Director. For the process this
year, the Chair updated the evaluation questionnaire
to include an initial self-assessment of how the
Board benchmarks itself against specific statements
representing the agreed corporate expectations. The
steps in the process were similar to the prior year.
Directors completed online questionnaires which
were followed up with discussions with the Chair.
In general, the Board felt that it was performing
well against the new corporate expectations. The
topics focused on included the challenges of hybrid
meetings, the need to bring in external expertise to
better understand the competitive landscape, and
the importance of developing a clear understanding
of the Company’s evolving governance structure to
keep Board agendas and papers focused.
Annual Report and Accounts 2023
113
Board development
Following the external evaluation the Board
developed a plan of action to respond to the
recommendations, including:
A review of the division of responsibilities
between the Group and subsidiary boards and the
delegations to executives and their committees.
This work has made good progress. An informal
evaluation of the new governance model’s
performance will be carried out early in 2024.
Aligning performance objectives for the Board to
the scale of business envisaged in the Company’s
business plan. The Board has set itself specific
objectives for 2024 which include embedding an
inclusive, collegial and effective culture in the way
that it operates.
Board development and training. The Board
participated in development and training initiatives
in areas including artificial intelligence, regulatory
compliance and cyber security.
Talent development and succession planning
(including the forums within which they are
discussed). Board succession plans were progressed
during the year to address the ninth-year anniversary
in July 2024 of the tenure of Sally Bridgeland and
Lindsey Brace Martinez.
The evolution of how the Board oversees risk
management. Key actions included appointing a
dedicated Chief Risk Officer, setting up an Enterprise
Risk Committee and increasing the size of the risk
management team.
The Board’s mix of formal and informal time,
including private sessions and discussions with
both internal and external stakeholders. In addition
to the annual strategy day, private sessions and
board dinners with senior management were held.
The schedule for 2024 includes meetings at Impax’s
North America offices.
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Impax Asset Management Group plc
Corporate Governance Report continued
The Board’s annual strategy discussions included a
discussion of the wider market environment and the
Company’s position within it; Impax’s Distribution
strategy; the implications of artificial intelligence
on the Company; planned products within Listed
Equities; and opportunities within Fixed Income.
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 Officer,
Chief Compliance Officers and the Chief Financial
Officer (who has responsibility for HR matters)
support the Chair in addressing the training and
development needs of Directors.
In order to develop a greater 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, including
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 and uses a
risk management framework which is overseen by the
Enterprise Risk Management team, Enterprise Risk
Committee and Audit and Risk Committee. Details of
the key risks facing the Group and internal controls
acting to control or mitigate the risks and further
details on the risk framework are set out on pages
88-91 of the Strategic Report.
Annual Report and Accounts 2023
115
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
attends 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 Company has engaged with institutional
shareholders and advisers to discuss further
improvements to the disclosures in its Remuneration
Committee Report and has consequently included
increased disclosure of the Company’s variable
remuneration structure and outcomes in the Report
(see pages 123-135).
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 made good progress in developing
its E,D&I strategy and has updated its goals in this
area. See pages 55-60 for more information.
In addition to supporting a new approach to
performance evaluation the HR team has enhanced
its training and development programmes and
supported employee engagement initiatives to
further enhance the Company’s culture.
The Company has a strong collegial culture which
continues to evolve. This centres on Impax’s five
values, which are closely aligned with our mission
of investing in the transition to a more sustainable
economy. See page 7 for more information.
In September the Company launched its first global
Impax Values Awards. Recognising and celebrating
colleagues’ success, the Awards are designed
to cement Impax’s culture and bring colleagues
together as the business continues to grow.
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Impax Asset Management Group plc
Directors’ Report
DIVIDENDS
The Directors propose a final dividend of 22.9 pence
per share (2022: 22.9 pence) which together with the
interim dividend of 4.7 pence per share (2022: 4.7
pence) gives a total for the year ended 30 September
2023 of 27.6 pence per share (2022: 27.6 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 2024.
The final dividend for the year ended 30 September
2022 was paid on 21 March 2023, being 22.9 pence
per share. The trustees of the Impax Employee
Benefit Trusts’ (“EBTs”) waived their rights to part
of these dividends, leading to a total dividend
payment of £30,216,474. The interim dividend of
4.7 pence for the year ended 30 September 2023
was paid on 21 July 2023 and totalled £6,159,842
after the EBT waiver. These payments are reflected
in the Statements of Changes in Equity for the Group
and Company.
SHARES
During the year the Group’s EBTs purchased
2,074,000 ordinary shares. The EBTs hold 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 2023
and 30 September 2022 were:
Ian Simm1
Sally Bridgeland
Simon O’Regan
Lindsey Brace Martinez2
Annette Wilson
Arnaud de Servigny
Karen Cockburn3
Vince O'Brien4
30 September
2023
30 September
2022
9,565,653
9,578,409
12,000
12,000
12,000
12,000
–
28,000
N/A
12,000
12,000
12,000
–
–
–
116,000
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 16 March 2023.
4 Retired on 16 March 2023.
There have been no changes to the above holdings
since 30 September 2023.
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 10,000 Restricted Share Awards
awarded in February 2019 which vest in February
2024, a further 20,000 awarded in February 2021
which vest in three equal tranches between February
2024 and January 2026, a further 17,500 awarded
in January 2022 which vest in three equal tranches
between January 2025 and January 2027 and finally
a further 12,250 awarded in February 2023 which vest
in three equal tranches between February 2026 and
January 2028.
Karen Cockburn has 20,000 options under the 2022
LTOP scheme awarded in March 2023 which vest in
January 2028 and a further 28,000 Restricted Share
Awards under the RSS 2022 scheme awarded in
February 2023 which vest in three equal tranches
between February 2026 and January 2028.
Annual Report and Accounts 2023
117
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 28 November 2023:
Number
Percentage
BNP Paribas Asset Management Holding
Funds managed by Liontrust Investment Partners LLP
Ian R Simm1
Funds managed by Janus Henderson Investors
Grandeur Peak Global Advisors
Hargreaves Lansdown Asset Management
Funds managed by abrdn plc
Impax Asset Management Group plc Employee Benefit Trust 2012
Rathbone Investment Managers
Funds managed by Blackrock Investment Management
Bruce Jenkyn-Jones1
18,258,112
13,312,010
9,565,653
6,376,352
6,293,880
5,493,074
5,189,935
5,044,276
5,019,190
5,005,213
4,401,854
13.8
10.0
7.2
4.8
4.7
4.1
3.9
3.8
3.8
3.8
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.
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 88-90 of the
Strategic Report.
PEOPLE
Through our robust people management policies,
we aim to attract and develop the best people. Our
performance management processes comprise a
twice-yearly performance appraisal against agreed
objectives and our core values. Output from this
performance process is used to inform decisions on
remuneration, career development and progression.
As part of creating a high-performance organisation, we
encourage all of our employees to fulfil their potential.
We provide our employees with access to a range
of training and development opportunities that are
relevant to our business. Further details of our people
policies and employee engagement are provided on
pages 52-54 of the Group’s 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 2023 were 32
(2022: 29).
CHARITABLE DONATIONS
During the year the Group has made donations to
charities totalling £504,933 (2022: £287,382).
ENERGY CONSUMPTION
Details of the Group’s energy consumption and
measures taken to achieve energy efficiencies are
provided on page 84 of the Strategic Report.
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Impax Asset Management Group plc
Directors’ Report continued
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.
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 judgements 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.
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
28 November 2023
Registered Office:
7th Floor
30 Panton St
London SW1Y 4AJ
Annual Report and Accounts 2023
119
Audit & Risk Committee Report
“The Committee welcomed the enhancement to
the risk management processes implemented
by the Group in the last year.”
Annette Wilson
Chair of the Audit &
Risk Committee
COMMITTEE MEMBERS
The Audit & Risk Committee
is comprised of the following
Non-Executive Directors:
• Annette Wilson (Chair from 30 November
2022 and Member from 28 June 2022)
• Vince O’Brien (Chair and Member until
30 November 2022)
• Lindsey Brace Martinez
• Simon O’Regan
Sally Bridgeland (Chair of Board) and
Arnaud de Servigny (Board Member)
also attend the meetings.
MEETINGS
5
During the year the
Committee met five times.
Details of attendance at
the meetings are shown
on page 112.
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Impax Asset Management Group plc
Audit & Risk Committee Report continued
CHAIR’S STATEMENT
I am pleased to present the Audit & Risk Committee
("Committee") Report for the year ended 30
September 2023, summarising the work undertaken
by the Committee. This is my first report as Chair
of the Committee, following my appointment in
November 2022.
Financial reporting
The Committee has reviewed the Group’s Interim
Report and the Annual Report 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
also oversaw the integrity of the financial statements
and the application of accounting standards and
policies.
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 to discuss their findings.
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 2023.
External auditor
KPMG LLP has acted as the auditor of the Group
since 2010 when it was appointed following a
competitive tender. Alison Allen is the current
audit partner and this is the first year that she has
signed the audit report, following the rotation of
the previous audit partner after five years. The
Committee reviewed and approved the scope of the
audit and auditor’s remuneration for the current year
audit ended 30 September 2023.
Details of fees paid to the Company’s auditor are
shown in note 7 to the financial statements. Total fees
paid for non-audit services, which were all assurance-
related, were £32,000 and 11% of total fees. The
Board concluded, with the support of the Committee,
that 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.
The Committee received and considered the
KPMG report on their findings of the audit for the
year ended 30 September 2023. A discussion on
findings was held with the external auditor, including
the work performed over key audit matters of
revenue recognition and recoverability of the Parent
Company’s investments in subsidiaries and non-
current company debtors. The report from KPMG also
confirmed that in their view they were independent.
Annual Report and Accounts 2023
121
Whistleblowing and fraud detection
The Group has a Whistleblowing Policy and
Procedure which provides an avenue for staff to
speak up about concerns they may have over
wrongdoing including if they suspect modern
slavery activities. This policy encourages Impax
staff to report any perceived, suspected or actual
wrongdoing without fear of reprisal. 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.
A Whilstleblowing Champion, who is a Board
Member and independent from the Management,
oversees the arrangements in place.
Annette Wilson
Chair of the Audit & Risk Committee
28 November 2023
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 88-91.
The Committee welcomed the enhancement to the
risk management processes implemented by the
Group in the last year, which take account of the
growth of the business. This included appointing a
dedicated Chief Risk Officer, setting up an Enterprise
Risk Committee and increasing the size of the risk
management team by two additional full-time
employees.
The Committee has received and considered reports
from the Enterprise Risk Committee and the Chief
Risk Officer at each of its meetings and reviewed all
material risk events and associated reviews of the
control environment.
The Committee also oversaw and reviewed the Risk
Appetite Statement and Key Risk Register as well
as the capital adequacy assessments carried out
for regulated subsidiaries. Most notably the review
included the Internal Capital and Risk Assessment
(ICARA) required under the FCA Investment Firms
Prudential Regime (IFPR).
Internal audit
The Group appointed Grant Thornton to provide
Internal Audit functions, including audit universe
creation, risk assessment and prioritisation, fieldwork
execution and reporting. Internal audits were
performed for both business functions and cross-
functional topics against a four-year plan, which is
reviewed annually by the Committee to ensure topics
remain aligned with key risk areas. Grant Thornton
attended Committee meetings and independently
presented their audit reports and recommendations
to the Committee.
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Impax Asset Management Group plc
Audit & Risk Committee Report continued
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, including climate-related financial disclosures
• the implementation of new accounting standards and policies and monitoring internal
financial controls.
External Auditors
• considering appointment, re-appointment and removal of the external auditors
• overseeing the relationship with the external auditors including approval of their remuneration (audit
or non-audit services), approval of their engagement letter and the scope of the audit
• reviewing and monitoring the external auditors’ independence and objectivity
• reviewing the findings of the audit with the external auditor and where necessary discussing of any
major issues which arose during the audit
• reviewing the effectiveness of the audit process.
Risk Management
• reviewing the design and effectiveness of the Group’s risk management processes and risk reports
• overseeing risk management carried out by the Enterprise Risk Committee and Chief Risk Officer
• monitoring of the internal financial control procedures
• overseeing Internal Capital and Risk Assessment (“ICARA”) and Internal Capital Adequacy
Assessment Process ("ICAAP") processes
• reviewing the Group Risk Appetite Statement and Key Risk Register.
Internal Audit
• approving the appointment or termination of internal auditors
• reviewing and approving 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 and Fraud Detection
• reviewing arrangements for Group employees to raise concerns, in confidence, about possible
wrongdoing or misconduct
• reviewing procedures for detecting fraud.
Annual Report and Accounts 2023
123
Remuneration Committee Report
“The new approach will provide more clarity on
the link between individual performance and
awards, consistently for all employees.”
Lindsey Brace Martinez
Chair of the Remuneration
Committee
COMMITTEE MEMBERS
The Remuneration Committee is
comprised of four independent Non-
Executive Directors. During the year, the
Committee held seven meetings and
reviewed remuneration activities as set
out in the report.
MEETINGS
• Lindsey Brace Martinez (Chair of the
Remuneration Committee)
• Sally Bridgeland
• Simon O’Regan
• Annette Wilson
7
During the year the
Committee met
seven times. Details
of attendance at the
meetings are shown
on page 112.
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Impax Asset Management Group plc
Remuneration Committee Report continued
CHAIR’S STATEMENT
As Chair of the Remuneration Committee
(“Committee”), and on behalf of the Board, I am
pleased to present the Directors’ Remuneration
report for the year ended 30 September 2023. This
report sets out the remuneration paid to the Directors
in financial year 2023, as well as a new approach to
Directors’ Remuneration Policy (“Policy”) which will
apply from financial year 2024 (i.e., financial year 1
October 2023 to 30 September 2024).
Since the publication of the Company’s previous
annual report, Committee members have continued
to engage with shareholders. We appreciate the
feedback provided and have further evolved our
strategic approach to remuneration by aligning it
with the creation of long-term value for all of
our stakeholders.
The Company’s policy is to pay salaries and benefits
that are broadly in line with market median levels
and, under normal circumstances, to award a
total variable performance-related remuneration
amount ("the Bonus Pool") of up to 45% of adjusted
operating profit. The Bonus Pool covers the total cost
of variable performance-related remuneration for
the year, including (a) the cost related to employer’s
national insurance payments due on cash bonuses
and equity awards; and (b) the current year’s expense
of current and previous years' share awards.
The Committee reviews and, guided by market
benchmarks, approves salary changes and variable
pay based on a structured assessment of individual
and Company performance. The Committee pays
particular attention to gender pay equity across
the Company. In addition, as part of its diversity
and inclusion policy, the Company is developing
remuneration measures and reporting plans
regarding ethnicity.
Our share-based variable remuneration comprises
a Restricted Share Scheme ("RSS") and a Long-
Term Option Plan ("LTOP") that are used to reward
performance, motivate, retain, and align employees’
interests for the long term in order to support the
delivery of the Company’s long-term business plan
and sustain a healthy culture. RSS shares vest over
a three-to-five-year period from the date of grant.
LTOP options are awarded to certain members of
senior management. These options have a vesting
period of five years plus an additional mandatory
holding period of five years post-vesting to
encourage longer-term retention. We will continue
to review whether additional performance-based
measures should be implemented to ensure RSS and
LTOP supports the business strategy.
Since last year’s remuneration report we have
introduced performance scorecards for financial year
2023 with weighted objectives, clear performance
indicators and a four-part performance rating
scale for all employees as well as a 'target bonus'
framework for mid-level and junior employees.
Financial year 2023 company performance
As set out in the Chair and Chief Executive
statements, the Company’s performance during the
financial year 2023 was robust. Despite challenging
market circumstances both AUM and revenue
expanded. Operating costs increased, in line
with plans, as we invested in our distribution and
investment capabilities, technology and operations
to ensure that the business is well placed for long
term growth, and as a result adjusted operating profit
decreased in the Period to £58.1 million. A focus on
growth has delivered on a number of key strategic
initiatives with expanded global distribution, launch
of several new products, building of Fixed Income
capability whilst continuing to attract new and retain
existing mandates. Reflecting the underlying financial
strength of the business the dividend was maintained
at 27.6p.
Financial year 2023 firm-wide remuneration
outcomes
Based on the Committee’s assessment of the
overall Company performance and individual
performance scorecards for financial year 2023, the
Committee agreed to award a total Bonus Pool of
40.5% of adjusted operating profit before variable
remuneration. This percentage is similar to the prior
year, but in absolute terms, the total Bonus Pool
amount is lower, which reflects a lower adjusted
operating profit compared to last year.
Annual Report and Accounts 2023
125
Chief Executive Officer’s performance
Ian Simm’s objectives for financial year 2023 were
grouped into two categories, business and functional
and collaboration and culture. The set of objectives
covered five areas, each with its own weight: (i)
Business development in new products, clients, and
markets; (ii) Financial performance and profitability;
(iii) Servicing clients; (iv) Investor relations; and (v)
Building a resilient and inclusive culture.
The Committee reviewed the Chair’s appraisal of the
Chief Executive’s performance for the financial year,
which utilised the same four-part performance rating
scale used for all employees. The Committee also
discussed with the Chief Executive his appraisal of
the performance of his direct reports and the overall
performance of the Company’s material risk takers.
Taking account of the Company’s performance
during the financial year, including both the delivery
of financial results and the progress towards longer-
term strategic objectives, the Committee agreed
to award the Chief Executive a bonus award of
£1,200,000 (2022: £1,800,000). This is the first year
in which 20% of the bonus will be deferred into units
of Impax-managed funds that will vest over three
years and be subject to malus and clawback. The
bonus deferral is expected to increase to 30% for
financial year 2024, and 40% for financial year 2025,
and the same 40% deferral for each year thereafter.
Chief Financial Officer’s performance
Karen Cockburn’s objectives for financial year 2023
were also grouped into two categories (business and
functional and collaboration and culture) covering:
(i) Financial results and profitability; (ii) Cost, cash
flow, and capital management; (iii) Supporting a
growing business and developing new capabilities;
(iv) Governance framework; and (v) Building a culture
of continuous improvements, as well as a diverse and
inclusive culture.
2023 when the Chief Financial Officer was appointed
as a Director of the Company. These RSS will vest
over three to five years and be subject to malus
and clawback. The Committee has also confirmed
that this sizeable grant of RSS shares is designed
to provide long-term alignment between the Chief
Financial Officer and shareholders’ interests and this
level of grant is not likely to be repeated in future
years. This large allocation of RSS takes the Chief
Financial Officer’s shareholding to above the minimum
shareholding requirement. Further details on the Chief
Executive and Chief Financial Officer performance
appraisal and remuneration are set out below.
Looking forward to Financial Year 2024
As outlined in last year’s annual report, we have
continued to develop our remuneration policies and
disclosures in line with and beyond what is required and
expected as an AIM listed company. In particular we
have undertaken a detailed review of the remuneration
of Executive Directors taking into account market
conditions and consultation with a number of external
parties, including some shareholders.
Following this review, a new Policy has been
implemented for financial year 2024 to include caps
on variable pay, the use of a balanced scorecard
comprising qualitative and quantitative financial
measures to determine bonuses, the deferral of
variable pay, and requirements for minimum levels of
shareholding. Relevant metrics have been used to set
threshold and exceptional performance levels to link
the quantitative objectives to the calculation of the
bonus and the cap on variable pay.
The budget for financial year 2024 includes a
provision for an increase in the salary budget of up to
5%. Individual salary increases will take into account
market circumstances relevant to the employee’s role,
performance and office location, including the effects
of inflation.
The Committee reviewed the Chief Executive’s
appraisal of the Chief Financial Officer’s performance
for the financial year and agreed to award the Chief
Financial Officer a bonus of £218,082 plus RSS
estimated value of £287,868. These amounts are pro-
rated for the Period from 16 March to 30 September
As part of our governance review and to comply with
remuneration requirements of the Investment Firm
Prudential Regime ("IFPR"), Alternative Investment
Fund Managers ("AIFM"), and Undertakings for
Collective Investment in Transferable Securities
("UCITS") regulations, we conducted an annual
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Impax Asset Management Group plc
Remuneration Committee Report continued
assessment of remuneration for Material Risk
Takers and Code Staff and considered changes to
take effect at the start of or during our financial
year 2024. In accordance with IFPR, we have
reconfirmed a maximum variable to fixed ratio for all
employees, including Executive Directors and that
all remuneration awards are subject to malus and
clawback provisions.
Ian Simm’s annual salary has been £300,000 since
1 January 2022. Although this is lower than the
median salary for Chief Executives of comparable
listed companies, the Committee has determined
that Ian’s opportunity to earn significant variable pay
provides a strong alignment with shareholders. There
will therefore be no change to his base salary during
the remainder of financial year 2024.
Karen Cockburn’s annual salary of £250,000 was
effective 1 October 2022 and was based on market
benchmarking to align with other Chief Financial
Officers working for comparable companies. There will
be no change to her base salary during the remainder
of financial year 2024.
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. A summary of financial year 2023 remuneration
outcome for the Chief Executive and Chief
Financial Officer, including the Committee’s
assessment of the Chief Executive’s and Chief
Financial Officer’s performance.
2. Details of the Executives' and Non-Executive
Directors’ remuneration for financial year 2023.
3. A new Directors’ Remuneration Policy for
implementation in financial year 2024.
Together with my colleagues on the Remuneration
Committee, I would welcome your support in
approving the Remuneration Committee Report at
the forthcoming AGM.
As this is my last Committee Report, I would like to
thank Sally for her leadership, fellow Board members
for their service, Ian for his vision, the Impax team
for their dedication and our shareholders for their
partnership. I look forward to working with Julia in
the coming months as we transition leadership of the
Remuneration Committee to her in the summer.
Lindsey Brace Martinez
Chair, Remuneration Committee
28 November 2023
REMUNERATION COMMITTEE’S ACTIVITIES DURING THE YEAR
• Objectives setting and approval of performance scorecards for all material risk takers for financial year 2023.
• Approval of the implementation of a performance scorecard, performance ratings and target bonus range
framework for certain staff for financial year 2023.
• Review the overall remuneration policy to ensure compliance with the relevant FCA Remuneration Codes
and associated remuneration-related regulations.
• Ensuring that the Company’s remuneration policy supports the long-term interests of shareholders and
promotes effective risk management, and that the policy is subject to independent oversight.
• Approval of all remuneration and share-based awards for financial year 2023.
• Review and recommendation of updates to the Terms of Reference of the Remuneration Committee.
• Review of the overall governance framework for remuneration, including the work of committees.
• Approval of a new HR system which included a system module that supports and guides the
remuneration process.
• Review and approval of enhancements to the firm’s benefits for staff worldwide.
• Review and recommendation of a new structure for Executive Directors’ Remuneration for implementation
in financial year 2024.
Annual Report and Accounts 2023
127
OVERVIEW OF IMPAX’S REMUNERATION ELEMENTS
Element
Base salary
Pension and Benefits
Remuneration overview
Base salary is set at an appropriate level to attract and retain a suitable calibre of talent
for the role.
Base salary takes into account the employee’s role, responsibilities, skills, experience,
performance contribution, and the salary levels for similar positions in comparable
companies.
Pension and benefits are market competitive to aid recruitment, retention, and
employee wellbeing. The Company pays a defined pension contribution for employees.
The individual pension schemes are private, and their assets are held separately from
those of the Company.
Benefits include income protection, critical illness insurance, life assurance, private
medical and dental insurance, and employee psychological support.
Annual bonus
Annual bonus is to reward individuals’ performance during the year as well as their
contribution to the delivery of the Company’s business plan and support for its culture
and values.
Bonus awards are discretionary and take into account the Company’s profitability.
The level of annual bonus is informed by the Company’s performance rating scale
which, ranked from highest to lowest, is (a) making an exceptional contribution, (b)
delivering to a high bar, (c) making progress, and (d) not delivering.
Share-based awards
Impax operates two long-term equity incentive plans for Executive Directors and
employees – the Restricted Share Scheme (“RSS”) and the Long-Term Option Plan
(“LTOP”).
The RSS provides alignment to the long-term success of Impax and a retention
mechanism for key talent. Shares awarded to employees are initially held by a nominee
and awards vest in equal tranches (one-third) over years 3, 4 and 5, subject to
continuous employment, malus and clawback. At the point of vesting, employees will
gain unfettered access to the shares.
The LTOP is a longer-term retention tool for senior management by allowing individuals
to share in the value-created over the long term. Options awarded under the LTOP
have a pre-defined exercise price. Options vest after five years subject to continuous
employment, malus and clawback and are subject to a further holding period of five
years post-vesting.
The Chief Executive and certain senior employees are eligible to receive interests in Impax Carried Interest
Partner LP, Impax Carried Interests Partner II LP, INEI III CIP LP, and INEI IV CIP SCSp (the “Partnerships”).
The Partnerships will receive payments from the Group’s private equity funds depending on the
funds’ performance.
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Impax Asset Management Group plc
Remuneration Committee Report continued
DIRECTORS’ REMUNERATION OUTCOME FOR THE FINANCIAL YEAR 2023
Executive Directors’ Performance Scorecard Assessment
As stated in the Company’s previous annual report, the Board agreed a performance scorecard with
weighted objectives for the Chief Executive Officer for the financial year 2023. These are shown below with
the Committee’s assessment on year-end performance results.
In calculating the actual bonus outcome, a score out of ten was assigned for each scorecard objective and
from the four-part performance scale, the Committee’s overall assessment for the Chief Executive's financial
year 2023 performance is “Delivering to a High Bar.”
CHIEF EXECUTIVE OFFICER’S PERFORMANCE SCORECARD ASSESSMENT
Maximum
Outcome
Actual
Outcome
20%
16%
Scorecard objective Committee’s assessment
Business and Functional Performance
Development
of the business
to realise the
Company’s
potential
Robust financial
performance
in challenging
markets
• AUM growth of 4.8% with net outflows of ca. £0.9bn (2% of
AUM), which was well below prior year, but ahead of most peers.
• Material progress in business development.
• Further international expansion with new Japan office and
distribution resources in the Nordics, Latin America and Canada.
• Further development of the firm’s management structure
including global teams.
• Adjusted Operating Profit of £58.1m, below prior year
20%
10%
(2022: £67.4m).
• Successful ramping up of cost efficiencies programme while
maintaining and expanding activity to position the firm for
further growth over the medium term.
• Avoided CO2 emissions associated with the firm’s balance
sheet investments in (internally managed) renewable energy
funds, continues to more than offset CO2 emissions arising from
operations.
Servicing existing
clients
•
Investment performance mixed for actively managed strategies
ahead of benchmark over one year (3/14 ahead) and three years
(3/13 ahead) but remains strong over five years (9/12 ahead).
20%
12%
• Encouraging client survey, with 90% of clients reporting a
positive view of Impax.
• Sustainability Centre established to focus the firm’s extensive
resources in this area.
Improving
communications
with investors
• Chief Financial Officer handover completed with positive
10%
8%
comments from shareholders.
• Work with brokers extended, including deeper engagement with
investors in continental Europe.
• Share price reflects a multiple near the top of the peer group,
notwithstanding significant market derating.
Annual Report and Accounts 2023
129
Scorecard objective Committee’s assessment
Collaboration and Culture
Maximum
Outcome
Actual
Outcome
Building a resilient,
inclusive culture as
the Company
grows
Total
• Successful staff survey with 90% engagement score and 97%
30%
21%
aligning with Impax’s mission, culture and values.
• At year end, 47% of staff were female, close to our 2025 target
of 48% - 52%; new 2027 targets agreed by the Board.
• Low staff turnover (10%) relative to peers; Impax continues to be
attractive to potential new recruits.
100%
67%
Chief Executive Officer’s Remuneration Outcomes
Based on the above performance assessment, the Committee awarded the following remuneration for Ian
Simm, as set out in the table below. For financial year 2023, the Chief Executive’s performance was strong
with effective overall leadership, new mandates, business growth and diversification across geographical
markets and products. However, lower Company financial performance compared to the prior year has
resulted in a lower overall Bonus Pool and a lower variable remuneration award for the Chief Executive.
Executive Directors did not have a variable pay cap for financial year 2023. The Chief Executive’s annual
bonus for financial year 2023 was determined by taking account of his actual scorecard outcome of 67% and
of the lower overall bonus pool available at year-end. Financial year 2024 is the first year a maximum variable
pay cap is set for Executive Directors.
Chief Executive
Salary/Fee
(£)
Benefits1
(£)
Annual Bonus2
(£)
Ian Simm
300,000
31,002
1,200,000
RSS
(£)
–
LTOP
(£)
FY23 total
(£)
FY22 total3
(£)
–
1,531,002
2,194,627
1 Taxable benefits represent life, income protection, critical illness insurance and medical cover.
2 20% of the annual bonus is subject to deferral into fund units.
3
Ian Simm’s total remuneration granted for the 2022 financial year consisted of 12,250 restricted shares (valued at £91,875), bonus of £1,800,000, salary of
£293,750, and benefits of £9,002.
Ian Simm did not exercise any options during the Period (2022: zero options exercised), 30,000 restricted
shares held by Ian Simm vested during the Period which were valued at £223,900 (2022: £376,385). Ian
Simm was granted 12,250 restricted shares under the Group Restricted Share Scheme (“RSS”) in February
2023, which vest in three annual tranches between February 2026 to January 2028. At the end of the period,
Ian Simm held no options (2022: nil) and 59,750 restricted shares (2022: 77,500).
Ian Simm did not receive any additional interest in the Partnerships during the Period (2022: 4% additional
interest). £8,188 of distributions were made from the Partnerships during the Period (2022: nil).
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Impax Asset Management Group plc
Remuneration Committee Report continued
CHIEF FINANCIAL OFFICER’S PERFORMANCE SCORECARD ASSESSMENT
A performance scorecard with weighted objectives was also set for the Chief Financial Officer, which
included business and functional performance, as well as collaboration and culture objectives. With the
Remuneration Committee’s approval, the Chief Executive’s overall assessment for Karen Cockburn’s
performance for financial year 2023 is “Delivering to a High Bar” and determined that Karen’s contribution
could be summarised as:
• Successful delivery of costs within budget, and improving the budgeting process for financial year 2024;
• Enhanced finance team by adding new hires to cover financial planning and tax capabilities;
• Development and implementation of enhancements to Impax’s governance framework; and
• In addition to the management of the Finance Team, expanded remit to cover oversight of Human
Resources and Operations functions.
Chief Financial Officer’s Remuneration Outcomes
Based on the above performance assessment, the Chief Executive has awarded the following remuneration
for Karen Cockburn with approval from the Committee. The variable remuneration award reflects the
Chief Financial Officer's strong contribution to a number of key strategic initiatives, notably the successful
management of costs below budget, the preparation of enhancements to Impax's governance framework,
and the expansion of management responsibility to include Human Resources and Operations as well as the
Finance function. However, lower Company financial performance compared to the prior year has resulted
in a lower overall Bonus Pool and this has been taken into account in the Chief Financial Officer’s variable
remuneration award.
Chief Financial Officer
Karen Cockburn
Salary/Fee
Benefits1
Annual Bonus2
(£)
(£)
(£)
RSS3
(£)
LTOP
(£)
FY23 total4
(£)
136,301
13,807
218,082
287,868
–
656,058
1 Taxable benefits represent life, income protection, critical illness insurance, medical and dental cover.
2 For financial year 2024, the annual bonus will be subject to 30% deferral as set out in the new Directors' Remuneration Policy section of the Report.
3 Estimated grant date valuation of 120,000 units of restricted shares awarded.
4 Karen Cockburn was appointed as Executive Director effective from 16 March 2023. Karen’s remuneration in the table above relates to the Period from 16
March to 30 September 2023.
Executive Directors' Shareholding
Unvested
shares
held at 30
September
2023
(Subject to
continued
employment)
Shares
held at 30
September
2023
(no
restrictions)
Executive
Directors
Total shares
held at 30
September
2023
Vested but
unexercised
options at 30
September
2023
Unvested
options at 30
September
2023
Total options
held at 30
September
2023
Total value of
shares at 30
September
2023
£000
Multiple
of salary
(vested and
unvested)
at 30
September
20232
Ian Simm
9,505,903
59,750 9,565,653
Karen
Cockburn1
–
148,000
148,000
–
–
–
–
43,859
146.2x
20,000
20,000
679
2.7x
1 Figures for Karen Cockburn include RSS grant of 28,000 units for the financial year 2022, which vest in three annual tranches between February 2026 to
January 2028. RSS award of 120,000 units pending formal grant for financial year 2023 are expected to vest in three annual tranches between 2027 to 2029.
2 Shareholding as a multiple of the annual salary is valued using IPX share price of £4.585 as at 30 September 2023.
Annual Report and Accounts 2023
131
A minimum shareholding requirement for the Chief Executive and Chief Financial Officer will be in operation
in financial year 2024. The new Executive Directors’ remuneration policy requires the Chief Executive to hold
shares in the Company with a value equivalent to at least 300% of base salary, and the Chief Financial Officer
to hold shares with a value equivalent to at least 200% of base salary. Executive Directors are expected to
build up and maintain their required shareholding within five years from appointment.
Non-Executive Directors’ fees for financial year 2023
Non-executive Director fees paid for the year ending 30 September 2023 are shown below.
Sally Bridgeland
Lindsey Brace Martinez1
Simon O’Regan
Annette Wilson
Arnaud de Servigny
Vince O'Brien2
FEES
(£)
125,000
91,287
70,000
79,750
70,000
38,414
1
Lindsey Brace Martinez is also a Director of the Board of Impax Funds, the US mutual fund range for which Impax acts as manager. The Company paid her
£75,484 for this service (2022: £65,052).
2 Vince O’Brien resigned from the Board on 16 March 2023.
Payment to past Directors
No payments were made to past Directors during financial year 2023.
Payment for loss of office
There have been no payments made to Directors for loss of office during financial year 2023.
DIRECTORS’ INTERESTS IN SHARES
The Directors’ beneficial interests in the Company’s ordinary share capital are disclosed on page 116.
SERVICE CONTRACTS
The CEO is employed under a contract requiring one year’s notice from either party. The CFO is employed
under a contract requiring six months’ 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.
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Impax Asset Management Group plc
Remuneration Committee Report continued
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 and designing the Executive
Directors’ Remuneration Policy. The Company took advice from McLagan in relation to external market
benchmarking, and BDO LLP in relation to the share plans.
NEXT FINANCIAL YEAR 2024
Looking forward to FY2024, the Board recognises that given the current challenging market conditions, the
firm’s future growth will depend on the executive team’s ability to navigate uncertainty effectively, while
maintaining a strong focus on regulatory requirements and upholding a robust risk and compliance culture.
Strong teamwork and efficient working will be vital in sustaining ongoing Company success.
The Chief Executive will be leading Impax through another year of uncertain market conditions, whilst
ensuring the Company makes the most of the opportunities to attract new clients, deliver investment
performance, increase its fund range and net new business, as well as maintain a high level of service to our
customers. Over the year ahead, the Board and the Chief Executive will consider how the Company’s strategy
should be adjusted under different market scenarios.
A high-level summary for both the Chief Executive’s and Chief Financial Officer’s performance scorecard for
the next financial year (financial year 2024) is shown opposite. As the year progresses, the Board will assess
Executive Directors’ performance against these objectives in the determination of variable pay outcome for
financial year 2024 year-end.
The Committee has determined following engagement with significant shareholders’ consultation that the
proposed financial year 2024 performance measures are fit for purpose and aligned to the strategic priorities
of the Company.
Executive Directors’ financial year 2024 Performance Scorecard
The Chief Executive and Chief Financial Officer each has an individual performance scorecard comprising
Financial & Quantitative objectives (60%) and Strategic & Qualitative objectives (40%). The table below
provides a high-level summary of the areas covered by these scorecards in aggregate.
Annual Report and Accounts 2023
133
Objective weightings
Metric
Performance measures
Financial and
Quantitative (60%
weighting)
Financial Results
• Net AUM flows; Adjusted operating profit.
Client service and
retention
• Account closings.
Investment performance
compared with benchmark
• Outperformance of major investment strategies vs
benchmark over 1 and 3 years.
IPX share price
• Multiple relative to peer group.
Strategic and
Qualitative (40%
weighting)
Strategy/business
development
Senior management
leadership
• Metrics including launch of new funds and growth of
•
•
distribution channels and resources.
Internal and external feedback on Sustainability Centre
operational effectiveness.
Improvements in firm-wide governance; succession
planning.
Staff engagement/culture
• Staff survey results; staff retention.
E,D&I and environment
• Firm-wide E,D&I targets; net CO2 emissions.
Scalable and efficient
operating model
• Efficiency metrics including operating margin
improvement and efficiency programme.
The targets relating to the financial measures are commercially sensitive and further information will be
disclosed following the end of the performance year in next year’s Directors’ Remuneration Report.
DIRECTORS’ REMUNERATION POLICY FOR IMPLEMENTATION IN FINANCIAL YEAR 2024
As mentioned earlier in the report, the Committee with advice from PwC reviewed the Company’s
remuneration principles and approach for Executive Directors. In this review, it was determined that to
incentivise both current and future Executive Directors and to address feedback received from shareholders
and proxy advisors from previous AGM voting outcomes, a new Directors’ Remuneration policy will be
implemented that embeds the most appropriate and relevant best practices used by other listed
investment managers.
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Impax Asset Management Group plc
Remuneration Committee Report continued
Below is a summary of Impax’s remuneration changes that will be introduced for Executive Directors (Chief
Executive & Chief Financial Officer) for financial year 1 October 2023 to 30 September 2024.
Remuneration
element
New policy
Changes from current policy
Variable pay
opportunity
Introduction of a cap/maximum pay opportunity to provide
shareholders with clarity on the maximum variable pay
quantum that each Executive Director might be awarded
each year.
The Remuneration Committee
has set a variable pay cap that is
proportionate and reflective of
market levels of pay.
The maximum variable pay
opportunities for financial year
2024 are:
Chief Executive £2.7 million;
Chief Financial Officer
£1.5 million.
Introduction of a formal
performance scorecard that
will be used to determine the
variable pay outcomes for the
Executive Directors.
The Board has set stretching
outcomes for the maximum
levels to be achieved. Achieving
the maximum would require an
exceptional year of performance
across all the financial and non-
financial/strategic objectives.
The Committee retains
discretion to determine the
award level commensurate with
Company performance or other
factors as determined by the
Committee.
Variable pay
performance
scorecard
A performance scorecard set by the Committee at the start
of the year comprising of quantitative financial performance
measures for example net AUM flows, profit, investment
performance and share price metrics (60% weighting), and
strategic and qualitative measures that reflect the strategic
priorities and other goals of the Company (40% weighting).
This provides a direct line of sight between Executive Directors’
delivery of key performance measures and variable pay
outcomes.
The bonus for quantitative objectives is calculated using the
relevant weighting and a percentage based on the performance
level. If the threshold performance level is achieved, 25% of
the maximum variable pay will be awarded; if the maximum
performance level or higher is achieved, the maximum variable
pay will be awarded; if the threshold level is not achieved,
no variable pay will be awarded; and where the results falls
between the threshold and maximum performance level, an
intermediate level of variable pay between the threshold and
the maximum will be awarded.
The level of variable pay will also take account of the overall
size of the Bonus Pool and ensure that variable pay outcomes
across the senior team are appropriate given Impax's team-
oriented culture.
Details of performance measures and performance levels
for the year being reported on will be set out in the next
Remuneration Committee report.
Annual Report and Accounts 2023
135
Remuneration
element
New policy
Changes from current policy
Annual
bonus
deferral
Introduction of a formal deferral policy for all Executive
Directors, to further align Executive Directors to the long-
term performance of the company, shareholder, and investors’
interest.
Deferral of annual bonus for a
minimum of three years with
pro-rata vesting, subject to
malus and clawback provisions.
This is reflective of market practice in the industry.
A phased introduction on the percentage of the annual
bonus deferral starting with 20% for financial year 2023, and
increasing to 30% for financial year 2024, and 40% deferral for
financial year 2025 and the same 40% for each year thereafter,
as follows:
Deferred annual bonus will be
awarded in actual investment
into fund units and/or cash or
share based on the Committee’s
discretion.
20% annual bonus deferral for financial year 2023,
30% annual bonus deferral for financial year 2024,
40% annual bonus deferral for financial year 2025.
Previously there was no shareholding requirement.
Although the Founder Chief Executive already has a substantial
shareholding, a formalised minimum will ensure going
forward all Executive Directors maintain a meaningful level of
shareholdings to align their interests with the shareholders.
Minimum
shareholding
requirement
The personal shareholding
policy for the Chief Executive
requires the retention of shares
or rights to shares equivalent to
300% of salary.
For the Chief Financial Officer,
the requirement is 200% of
salary.
Executive Directors are
expected to attain the
shareholding requirement and
maintain this level of holding
within five years from the date
of appointment.
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Impax Asset Management Group plc
Financial
Statements
Independent Auditor’s Report
Consolidated Income Statement
138
147
Consolidated Statement of Comprehensive Income
147
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Cash Flow Statement
Notes to the Financial Statements
Company Statement of Financial Position
Company Statement of Changes in Equity
Company Statement of Cash Flows
148
150
152
154
193
195
196
Notes to the Company Financial Statements
197
Notice of Annual General Meeting
208
Memberships
212
Alternative Performance Measures
213
Officers & Advisers
215
Annual Report and Accounts 2023
137
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Impax Asset Management Group plc
Independent Auditor’s Report
to the members of Impax Asset Management Group plc
1. OUR OPINION IS UNMODIFIED
We have audited the financial statements of Impax
Asset Management Group plc (“the Group”) for the
year ended 30 September 2023 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 2023 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 with 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 other entities of public interest. We believe that
the audit evidence we have obtained is a sufficient
and appropriate basis for our opinion.
Overview
Materiality:
Group financial
statements as a
whole
Coverage
Key audit matters
Recurring risks
£2,140k (2022: £3,620k)
4.1% (2022: 5.0%) of Group profit
before tax
91% (2022: 92%)
of the total profit and
losses that made up the
Group profit before tax
vs 2022
Revenue recognition –
recurring management
fee income
Recoverability of
Parent Company’s
investment in
subsidiaries and non-
current intercompany
debtors
Annual Report and Accounts 2023
139
2. KEY AUDIT MATTERS: OUR ASSESSMENT OF RISKS OF MATERIAL MISSTATEMENT
Key audit matters 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 follows
(unchanged from 2022):
The risk
Our response
Revenue recognition
– recurring
management fee
income
(£174.5 million* of the
£178.4 million revenue
balance; 2022: £172.3
million).
Refer to page
119 (Audit & Risk
Committee Report),
page 187 (accounting
policy) and page 159
(financial disclosures).
*US distribution fees,
carried interest from
private equity funds
and non-recurring
dealing fees have been
excluded from the
KAM.
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 fee income which results
from the business activities of the Group.
The two key components to recurring
management fee income calculations are
fee rates to be applied and the amount
of assets under management. The
following are identified as the key risks
for recurring management 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 selection of AUM
data used in the calculation of recurring
management fee income we obtained
independent confirmation of the AUM
from the third-party custodian or
administrator, where appropriate.
General procedures:
• Reperformance: For 100% of all material
recurring management fee transactions
for in scope components, we utilised
our specialist data analytics team to
recalculate recurring management fee
income with reference to the fee rate
and AUM.
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Impax Asset Management Group plc
Independent Auditor’s Report continued
Recoverability of
Parent Company’s
investment in
subsidiaries and non-
current intercompany
debtors
(£67.0 million; 2022:
£61.9 million)
Refer to page
119 (Audit & Risk
Committee Report),
page 199 (accounting
policy) and page 199
(financial disclosures).
The risk
Our response
Low risk, high value
The carrying amount of the Parent
Company’s investments in subsidiaries
and non-current intercompany debtors
represents 80% (2022: 80%) of the
Parent Company total assets.
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.
Non-current intercompany debtors
(£13.2 million) represent 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 procedures included:
• Test of details: We compared the
carrying amount of 100% of investments
and non-current 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 we
compared the carrying amount of the
investment with the expected value of
the business based on a value in use
calculation.
Annual Report and Accounts 2023
141
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 £2,140k (2022: £3,620k),
determined with reference to a benchmark of
Group profit before tax of which it represents
4.1% (2022: 5.0%).
Materiality for the Parent Company financial
statements as a whole was set at £900k (2022:
£776k), determined with reference to a benchmark
of Company total assets, of which it represents 1.0%
(2022: 1.0%).
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% (2022:
75%) of materiality for the financial statements as
a whole, which equates to £1,600k (2022: £2,715k)
for the Group and £675k (2022: £582k) 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 £107k (2022: £181k), in
addition to other identified misstatements that
warranted reporting on qualitative grounds.
Of the Group’s 22 (2022: 22) reporting components,
we subjected 4 (2022: 4) to full scope audits for
group purposes.
The components within the scope of our work
accounted for the percentages illustrated opposite.
The remaining 1% (2022: 1%) of total Group revenue,
9% (2022: 8%) of the total profit and losses that
made up the Group before tax and 5% (2022: 6%)
of total Group assets is represented by 19 (2022: 18)
components, none of which individually represented
more than 6% (2022: 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 £324k (2022:
£557k) to £1,819k (2022: £3,077k) 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.
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Impax Asset Management Group plc
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 Company or to cease
their operations, and as they have concluded that the
Group and the 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
£52.1m (2022: £72.5m)
Group materiality
£2,140k (2022: £3,620k)
£2,140k
Whole financial statements
materiality (2022: £3,620k)
£1,600k
Whole financial statements
performance materiality
(2022: £2,715k)
Range of materiality at 4
components (£324k to £1,819k)
(2022: £577k to £3,077k)
£107k
Misstatements reported to
the Audit & Risk Committee
(2022: £181k)
Group PBT
Group materiality
Group revenue
Group profit before tax
1
1
99%
(2022: 99%)
99
99
Group total assets
6
5
95%
(2022: 94%)
95
94
8
9
91%
(2022: 92%)
91
92
Full scope for Group audit
purposes 2022
Residual components 2022
Full scope for Group audit
purposes 2023
Residual components 2023
Annual Report and Accounts 2023
143
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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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 or Company’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.
144
Impax Asset Management Group plc
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.
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.
Annual Report and Accounts 2023
145
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 118, 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
Independent Auditor’s Report continued
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.
Alison Allen
(Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square, London, E14 5GL
28 November 2023
Annual Report and Accounts 2023
147
Consolidated Income Statement
For the year ended 30 September 2023
Revenue
Operating costs
Finance income
Finance expense
Profit before taxation
Taxation
Profit after taxation
Earnings per share
Basic
Diluted
Dividends per share
Interim dividend paid and final dividend declared for the year
Adjusted results are provided in note 4.
Notes
6
7
10
11
12
13
13
14
2023
£000
178,367
(124,120)
3,130
(5,271)
52,106
(12,884)
39,222
2022
£000
175,396
(110,213)
7,950
(574)
72,559
(13,077)
59,482
30.5p
29.8p
46.0p
44.7p
27.6p
27.6p
Consolidated Statement of Comprehensive Income
For the year ended 30 September 2023
Profit for the year
Exchange differences on translation of foreign operations
Total other comprehensive income
Total comprehensive income for the year attributable to equity holders
of the Company
2023
£000
39,222
(119)
(119)
2022
£000
59,482
2,685
2,685
39,103
62,167
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 154-192 form part of these financial statements.
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Impax Asset Management Group plc
Consolidated Statement of Financial Position
As at 30 September 2023
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
2023
2022
Notes
£000
£000
£000
£000
15
16
17
12
18
19
21
21
24
12,883
14,185
8,820
3,665
42,543
13,270
1,645
53,542
37,963
1,326
9,291
1,533
2,940
118,868
13,932
18,340
9,279
4,781
39,553
46,332
148,963
188,516
157,119
203,451
38,769
7,255
176
58,687
52,232
1,326
9,291
1,533
3,059
122,969
133,958
138,178
Annual Report and Accounts 2023
149
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
2023
2022
Notes
22
17
17
12
£000
44,809
1,524
1,007
7,218
–
£000
47,340
7,218
188,516
£000
53,624
1,488
2,202
7,590
369
£000
57,314
7,959
203,451
Authorised for issue and approved by the Board on 28 November 2023. The notes on pages 154-192 form
part of these financial statements.
Ian R Simm
Chief Executive
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Impax Asset Management Group plc
Consolidated Statement of Changes in Equity
For the year ended 30 September 2023
1 October 2021
Transactions with owners
of the Company:
Dividends paid
Cash received on option exercises
Tax charge on long-term incentive schemes
Share-based payment charges
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
Share
capital
£000
Share
premium
£000
Merger
reserve
£000
Notes
Exchange
translation
reserve
£000
Retained
earnings
£000
Total
equity
£000
1,326
9,291
1,533
374
97,998
110,522
14
9
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(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
–
–
2,685
2,685
30 September 2022
1,326
9,291
1,533
3,059
122,969
138,178
Annual Report and Accounts 2023
151
30 September 2022
Transactions with owners
of the Company:
Dividends paid
Cash received on option exercises
Tax credit on long-term incentive schemes
Share-based payment charges
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
Share
capital
£000
Share
premium
£000
Merger
reserve
£000
Notes
Exchange
translation
reserve
£000
Retained
earnings
£000
Total
equity
£000
1,326
9,291
1,533
3,059
122,969
138,178
14
9
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(36,376)
(36,376)
1,261
371
1,261
371
6,535
6,535
(15,114)
(15,114)
(43,323)
(43,323)
39,222
39,222
(119)
(119)
–
–
(119)
(119)
30 September 2023
1,326
9,291
1,533
2,940
118,868
133,958
The notes on pages 154-192 form part of these financial statements.
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Impax Asset Management Group plc
Consolidated Cash Flow Statement
For the year ended 30 September 2023
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 (investments)/redemptions from unconsolidated Impax funds
(Expenditure)/income from settlement of investment related hedges
Investment income received
Decrease/(increase) in cash held in money market funds
Net cash generated from/(used by) investing activities
Financing activities
Acquisition of non-controlling interest
Finance costs paid on a loan facility
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 (decrease)/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
Notes
27
2023
£000
2022
£000
53,218
(14,562)
38,656
(824)
(5,281)
(390)
2,865
5,145
1,515
–
(86)
(1,979)
(15,114)
1,261
(36,376)
(52,294)
80,321
(9,046)
71,275
(796)
355
69
586
(19,091)
(18,877)
(182)
(141)
(1,729)
(8,781)
540
(28,665)
(38,958)
(12,123)
13,440
52,232
(2,146)
37,963
36,172
2,620
52,232
21
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 Research Payment Accounts
(“RPAs”) are not included in cash reserves (see note 21). There are no significant changes to liabilities arising
from financing activities.
Annual Report and Accounts 2023
153
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 Period
£000
52,232
58,687
(3,951)
Cash flow
£000
(12,123)
(5,145)
138
Foreign
exchange
£000
At the end
of the Period
£000
(2,146)
–
–
37,963
53,542
(3,813)
106,968
(17,130)
(2,146)
87,692
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Impax Asset Management Group plc
Notes to the Financial Statements
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 193-207.
2 BASIS OF PREPARATION
These financial statements have been prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006 (“IFRS”) and applicable law.
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 9, 15 and 16.
Annual Report and Accounts 2023
155
4 ADJUSTED PROFITS AND EARNINGS
The reported operating earnings, profit before tax and earnings per share are substantially affected by
business combination effects 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
Tax on adjustments
Profit after taxation
Diluted earnings per share
Year ended 30 September 2023
Adjustments
Business
combination
effects
£000
Other
£000
Reported
– IFRS
£000
178,367
(124,120)
2,813
1,318
54,247
4,131
3,130
(5,271)
52,106
(12,884)
39,222
29.8
4,131
4,131
3.1
(275)
(275)
3,994
3,719
(707)
3,012
2.3
Adjusted
£000
178,367
(120,264)
58,103
3,130
(1,277)
59,956
(13,591)
46,365
35.2
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Impax Asset Management Group plc
4 ADJUSTED PROFITS AND EARNINGS CONTINUED
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
Adjustment re historical tax charges
Tax on adjustments
Profit after taxation
Diluted earnings per share
Reported
– IFRS
£000
175,396
(110,213)
65,183
7,950
(574)
72,559
(13,077)
Year ended 30 September 2022
Adjustments
Business
combination
effects
£000
Other
£000
2,420
1,340
3,760
(1,527)
(1,527)
(6,440)
Adjusted
£000
175,396
(107,980)
67,416
1,510
(574)
3,760
(7,967)
68,352
(12,293)
(730)
1,514
59,482
44.7
3,760
2.8
(7,183)
56,059
(5.4)
42.1
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 (the “Acquisition”) and are amortised over their 11-year life. This charge is not linked to the
operating performance of the Impax NH business and so is excluded from adjusted profit.
Acquisition equity incentive scheme charges
Impax NH staff have been awarded share-based payments in respect of the Acquisition. Charges in respect
of these relate to the Acquisition rather than the operating performance of the Group and are therefore
excluded from adjusted profit.
Notes to the Financial Statements continued Annual Report and Accounts 2023
157
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 options when they are exercised and on the RSS
awards when they vest, based on the valuation of the underlying shares at that point. A charge is accrued
for the NIC within IFRS operating profit based on the share price at the balance sheet date. The Group also
receive a corporation tax credit equal to the value of the awards at the date they are exercised (options) or
vest (RSS awards). The tax credit in excess of the cumulative share-based payment expense is recognised
directly in equity.
These two charges/credits vary based on the Group’s share price (together referred to as mark to market
charge on equity incentive schemes) and are not linked to the operating performance of the Group. They are
therefore eliminated when reporting adjusted profit.
Finance income and expense
Finance expense for the Period has been adjusted for foreign exchange gains and losses on monetary assets
that are not linked to the operating performance of the Group. £1,200,000 of the current Period foreign
exchange loss relates to the retranslation of a US Dollar denominated loan between the Parent Company and
a US subsidiary. A corresponding gain is recognised in equity in the exchange translation reserve.
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Impax Asset Management Group plc
5 SEGMENTAL REPORTING
(a) Operating segments
The Group is managed on an integrated basis and there is one reportable segment.
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:
North America
Luxembourg
UK
Ireland
France
Canada
Australia
Netherlands
Denmark
Other
Revenue
2023
£000
54,183
49,383
30,712
13,323
11,085
6,363
3,821
3,641
3,378
2,478
2022
£000
61,890
43,362
34,069
13,175
12,261
954
2,796
3,012
2,129
1,748
178,367
175,396
The following non-current assets: property, plant and equipment, goodwill and intangible assets are located
in the countries listed below:
UK
United States
Hong Kong
Ireland
Non-current assets
2023
£000
5,753
29,738
6
391
35,888
2022
£000
6,427
34,907
140
77
41,551
Notes to the Financial Statements continued Annual Report and Accounts 2023
159
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. Carried interest of £35,600 was received in the Period (2022: none).
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 a result of equity
market downturns, foreign exchange 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 £172,373,446 (2022: £170,840,243) from related parties.
7 OPERATING COSTS
See accounting policy at note 31 (E) for leases and note 31 (F) for placement fees.
The Group’s largest operating cost is staff costs. Other significant costs include IT and communication costs,
direct fund expenses, professional fees, premises costs (depreciation on office building leases, rates and
service charge) and placement fees.
Staff costs (note 8)
IT and communications
Direct fund expenses
Professional fees
Depreciation and amortisation
Placement fees
Premises costs
Research costs
Mark to market credit on share awards
Other costs
Total
2023
£000
86,078
7,850
7,441
5,094
5,073
2,815
1,639
1,167
(275)
7,238
124,120
2022
£000
81,766
5,805
6,388
4,006
4,257
1,783
1,333
980
(1,527)
5,422
110,213
Operating costs include £1,237,000 (2022: £1,183,000) in respect of placement fees paid to related parties.
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7 OPERATING COSTS CONTINUED
Other costs include £297,000 (2022: £295,000) paid to the Group’s auditors which is analysed below. Audit-
related assurance services in the Period relate to the auditor’s review of the Group’s half-yearly report.
Audit of the Group's Parent Company and consolidated financial statements
Audit of subsidiary undertakings
Audit-related assurance services
2023
£000
122
143
32
297
2022
£000
91
124
80
295
8 STAFF COSTS AND EMPLOYEES
See accounting policy for pensions at note 31 (G).
Staff costs include salaries, variable bonuses, social security costs (principally employers’ 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
2023
£000
63,936
6,188
1,955
6,535
7,464
86,078
2022
£000
62,393
6,356
1,635
6,152
5,230
81,766
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 £140,000 (2022: £105,000) 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 outcome for the Financial Year 2023’
heading on page 128 and in the Directors’ Report under the ‘Directors and their interests in shares’ heading
on page 116.
Notes to the Financial Statements continued Annual Report and Accounts 2023
161
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 £12,049,310 with £2,457,318 of share-based payments (2022: £14,525,298 plus £2,239,493
of share-based payments). No Board members received pension contributions during the year (2022: nil).
Employees
The average number of persons (excluding Non-Executive Directors and including temporary staff) employed
during the year was 290 (2022: 240).
Portfolio Management
Private Equity
Client Service and Business Development
Group
9 SHARE-BASED PAYMENT CHARGES
See accounting policy at note 31 (H).
2023
No.
105
15
101
69
290
2022
No.
86
13
82
59
240
The total expense recognised for the year arising from share-based payment transactions was £6,535,000
(2022: £6,151,000). The charges arose in respect of the Group’s Restricted Share Scheme (“RSS”) and the
Group’s Long Term Option Plan (“LTOP”) which are described below. Details of all outstanding options are
provided at the end of this note. The charges for each scheme are:
RSS
LTOP
2023
£000
5,861
674
6,535
2022
£000
5,231
920
6,151
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. 729,750 restricted shares were granted during the Period under the 2022 plan. Awards can also
be issued to new employees and during the Period, 42,630 RSS awards were granted to employees joining
(“RSS 2023 A”). Post year end, the Board approved the grant of a further 1,519,750 restricted shares under
the 2023 plan (“RSS 2023 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.
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9 SHARE-BASED PAYMENT CHARGES CONTINUED
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.
2023
2022
RSS 2023
(estimate)
RSS 2023 A
RSS 2022
Final
RSS 2022 A
RSS 2021
Final
Awards originally granted
1,519,750
42,630
729,750
397,889
413,750
Weighted average award value
Weighted average share price on grant
Weighted average expected volatility
£4.30
£4.40
36.3%
£7.51
£7.61
35.8%
£8.42
£8.52
35.5%
£7.32
£7.32
34.6%
£13.82
£13.94
34.0%
Weighted average award life on grant
5.3 years
4.0 years
5.3 years
2.6 years
5.2 years
Weighted average expected dividend yield
Weighted average risk free interest rate
6.3%
4.2%
3.6%
3.6%
3.2%
4.6%
3.0%
1.6%
1.5%
1.0%
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 RSS 2023 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. This will
be adjusted for using the share price and other inputs at the grant date.
Restricted shares outstanding
Outstanding at 1 October 2022
Granted during the year
Vested during the year
Forfeited during the year
Outstanding at 30 September 2023
2,494,006
772,380
(383,618)
(187,086)
2,695,682
Employee share option plans
Employee Share Option Plan
Awards were granted to employees in 2017 under the Group’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. All remaining options outstanding under the ESOP
were exercised during the Period.
Notes to the Financial Statements continued Annual Report and Accounts 2023
163
Long Term Option Plan
Awards have been granted to employees under the Group’s LTOP between 2018 and 2022. The strike prices
of these options were £1 (2018 and 2019), £3 (2020), £9 (2021) and £7.50 (2022). 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 1,012,000 options under the 2023 LTOP plan with a £4.40
strike price and with the other conditions the same as the 2018-2022 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
2023 LTOP
(estimated)
2023
2022 LTOP
2022
2021 LTOP
1,012,000
300,000
339,575
£4.40
£0.80
£4.40
36.3%
£7.50
£2.14
£8.12
35.6%
6 years
6 years
6.3%
4.2%
3.4%
4.6%
£9.00
£4.87
£13.90
34.2%
6 years
1.5%
0.8%
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 2023 LTOP 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. This will be
adjusted for using the share price and other inputs at the grant date.
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Impax Asset Management Group plc
9 SHARE-BASED PAYMENT CHARGES CONTINUED
Options outstanding
An analysis of the outstanding options arising from the Group’s LTOP is provided below:
Options outstanding at 1 October 2022
Options granted
Options forfeited
Options exercised
Options outstanding at 30 September 2023
Options exercisable at 30 September 2023
Weighted
average
exercise price
p
265.2
750.0
246.6
184.3
372.4
–
Number
2,693,575
300,000
(311,000)
(725,000)
1,957,575
–
The weighted average remaining contractual life was 7.1 years.
During the Period, 15,750 options, with a £0.01 exercise price, were also granted to employees (2022: 6,000).
These options vest in three equal tranches between 2026 and 2028. Post year-end, the Board approved the
grant of a further 22,000 of these options with the same conditions which vest between 2027 and 2029.
10 FINANCE INCOME
See accounting policies at notes 31 (C), 31 (I) and 31 (J).
Fair value gains
Interest income
Other investment income
Foreign exchange gains
2023
£000
265
2,865
–
–
3,130
2022
£000
148
520
33
7,249
7,950
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.
Fair value gains comprise unrealised gains of £756,000 offset by realised losses of £491,000 (2022: £46,000
of unrealised gains and £102,000 of realised gains).
Foreign exchange gains in the prior Period mainly arose on the retranslation of monetary assets held in US Dollars.
Notes to the Financial Statements continued Annual Report and Accounts 2023
165
11 FINANCE EXPENSE
See accounting policies at notes 31(C) and 31(J).
Interest on lease liabilities
Finance costs on a loan facility
Foreign exchange losses
2023
£000
411
86
4,774
5,271
2022
£000
433
141
–
574
Foreign exchange losses in the current Period mainly arose on the retranslation of monetary assets held
in US Dollars. £1.2 million of this loss relates to the retranslation of a US Dollar denominated loan between
the Parent Company and a US subsidiary. A corresponding gain is recognised in equity in the exchange
translation reserve.
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, Ireland and
Japan) 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) Analysis of charge for the year
Current tax expense:
UK corporation tax
Foreign taxes
Adjustment in respect of prior years
Total current tax expense
Deferred tax (credit)/expense:
Credit for the year
Adjustment in respect of prior years
Total deferred tax (credit)/expense
Total income tax expense
2023
£000
9,542
3,639
(53)
13,128
(821)
577
(244)
2022
£000
13,400
472
(1,606)
12,266
133
678
811
12,884
13,077
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Impax Asset Management Group plc
12 TAXATION CONTINUED
A tax credit of £371,000 (deferred tax charges of £859,000 net of current tax credits of £1,230,000) is also
recorded in equity in respect of changes in estimates of the tax deductions on share awards arising from
changes in the share price (2022: charges of £3,756,000 (deferred tax charges of £6,739,000 net of current
tax credits of £2,983,000)).
The deferred tax adjustment in respect of prior years in the Period arises from the utilisation of tax losses
following the finalisation of intra-group profits.
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 2023, 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 blended UK tax rate for the year is 22% due to the increase in the corporation tax rate from 19% to 25%
from 1 April 2023. The tax assessment for the Period is higher than this rate (2022: lower). The differences are
explained below:
Profit before tax
Tax charge at 22% (2022: 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
2023
£000
52,106
11,463
(231)
1,256
559
(29)
9
(143)
2022
£000
72,559
13,786
(506)
617
(928)
31
77
–
12,884
13,077
Notes to the Financial Statements continued Annual Report and Accounts 2023
167
(c) Deferred tax
The deferred tax asset included in the consolidated statement of financial position is as follows:
Share-based
payment
scheme
£000
Tax losses
carried
forward
£000
10,593
(7,848)
311
267
3,323
(859)
(70)
729
3,123
681
1,109
127
(1,304)
611
–
–
–
611
Other assets
£000
Income not
yet taxable
£000
Other
liabilities
£000
621
(161)
(210)
–
–
224
847
–
(62)
(979)
(194)
–
–
161
–
–
–
–
–
–
–
(159)
(369)
–
–
494
125
Total
£000
11,524
(6,739)
438
(811)
4,412
(859)
(132)
244
3,665
As at 1 October 2021
(Charge)/credit to equity
Exchange differences on
consolidation
Credit/(charge) to the
income statement
As at 30 September 2022
(Charge)/credit to equity
Exchange differences on
consolidation
Credit/(charge) to the
income statement
As at 30 September 2023
A deferred tax asset of £952,000 (2022: £1,600,000) relating to £4.4 million of losses in one of the Group’s
subsidiaries has not been recognised as there is insufficient evidence that there will be sufficient taxable
profits in the future against which these deferred tax assets could be utilised.
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Impax Asset Management Group plc
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.
2023
Basic
Diluted
2022
Basic
Diluted
Earnings for
the year
£000
Shares
000’s
Earnings
per share
39,222
128,769
30.5p
39,222
131,572
29.8p
59,482
129,409
46.0p
59,482
133,168
44.7p
The weighted average number of shares is calculated as shown in the table below:
Weighted average number of ordinary shares held
Less weighted average number of own shares held
Weighted average number of ordinary shares used in the calculation of basic EPS
Additional dilutive shares regarding share schemes
Weighted average number of ordinary shares used in the calculation of diluted EPS
2023
000’s
2022
000’s
132,597
132,597
(3,828)
(3,188)
128,769
2,803
131,572
129,409
3,759
133,168
Notes to the Financial Statements continued Annual Report and Accounts 2023
169
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 Period therefore comprises
the prior Period final dividend and the current Period interim.
Dividends declared/proposed in respect of the year
Interim dividend declared per share
Final dividend proposed per share
Total
2023
pence
4.7
22.9
27.6
2022
pence
4.7
22.9
27.6
The proposed final dividend of 22.9p will be submitted for formal approval at the Annual General Meeting
to be held on 12 March 2024. 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 £30,003,000.
Dividends paid in the year
Prior year final dividend – 22.9p, 17.0p
Interim dividend – 4.7p, 4.7p
15 GOODWILL
See accounting policy at note 31 (L).
2023
£000
30,216
6,160
36,376
2022
£000
22,475
6,190
28,665
The goodwill balance within the Group at 30 September 2023 arose from the acquisition of Impax Capital
Limited on 18 June 2001 and the acquisition of Impax NH in January 2018.
Cost
At 1 October 2021
Foreign exchange
At 1 October 2022
Foreign exchange
At 30 September 2023
Goodwill
£000
11,816
2,116
13,932
(1,049)
12,883
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Impax Asset Management Group plc
15 GOODWILL CONTINUED
Impax NH consists of only one cash-generating unit (“CGU”). Goodwill is allocated between CGUs at
30 September 2023 as follows – £11,254,000 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 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 2024, which was approved by the Board of Directors in
September 2023. The discount rate was derived from the Group’s weighted average cost of capital, adjusted
for market specific risks associated with the estimated cash flows, 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 20 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 and margins would continue at current levels, that fund
performance for the listed equity business would be 5% per year (2022: 5%) and a discount rate of 12.5%
(2022: 12.5%). There has been no impairment of goodwill related to this segment 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 1% there would no impairment and if fund performance reduced to zero there
would be no impairment (2022: 1% increase in discount rate, no impairment).
The impairment test for the Impax NH CGU showed no impairment (2022: no impairment) was required and
used the following key assumptions – average fund inflows of US$0.56 billion (2022: US$0.38 billion), fund
performance of 5% (2022: 5%), an average operating margin of 29% (2022: 17%) and a discount rate of
12.5% (2022: 12.5%). The following plausible changes in assumptions would individually not give rise to an
impairment: a consistent 10% decrease in inflows (2022: 10% decrease); a 100 basis point annual reduction in
performance each year (2022: 100 basis point reduction); a 1% annual reduction in operating margin (2022:
1% reduction) and a 1% increase in discount rate (2022: 1% increase).
16 INTANGIBLE ASSETS
See accounting policy at note 31 (M).
Intangible assets mainly represents the value of the management contracts acquired as part of the
acquisition of Impax NH.
Notes to the Financial Statements continued Annual Report and Accounts 2023
171
Cost
As at 1 October 2021
Additions
Disposals
Foreign exchange
As at 30 September 2022
Additions
Foreign exchange
As at 30 September 2023
Accumulated amortisation
As at 1 October 2021
Charge for the year
Disposals
Foreign exchange
As at 30 September 2022
Charge for the year
Foreign exchange
As at 30 September 2023
Net book value
As at 30 September 2023
As at 30 September 2022
As at 30 September 2021
Management
contracts
£000
Software
£000
Total
£000
26,441
–
–
5,469
31,910
–
(2,710)
29,200
8,988
2,459
–
2,199
13,646
2,813
(1,131)
15,328
13,872
18,264
17,453
529
81
(309)
–
301
299
–
600
509
26
(310)
–
225
62
–
287
313
76
20
26,970
81
(309)
5,469
32,211
299
(2,710)
29,800
9,497
2,485
(310)
2,199
13,871
2,875
(1,131)
15,615
14,185
18,340
17,473
The management contracts were acquired with the acquisition of Impax NH in January 2018 and are
amortised over an 11-year life.
Assets under management, forecast asset inflows and operation margin are all the same or in excess of the
assumptions when the management contracts were first valued. The discounted cost of capital is the same as
when the management contracts were first valued. As such, there are no indicators of impairment.
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Impax Asset Management Group plc
17 PROPERTY, PLANT AND EQUIPMENT
See accounting policy at note 31 (N).
Property, plant and equipment mainly represents the costs of fitting out the Group’s leased London
office (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 2021
Additions
Disposals
Foreign exchange
As at 30 September 2022
Additions
Disposals
Foreign exchange
As at 30 September 2023
Accumulated depreciation
As at 1 October 2021
Charge for the year
Disposals
Foreign exchange
As at 30 September 2022
Charge for the year
Disposals
Foreign exchange
Right-of-use
assets
£000
Leasehold
improvements
£000
Fixtures,
fittings and
equipment
£000
Total
£000
10,527
139
–
951
11,617
1,607
–
(468)
2,074
274
(6)
1
2,090
14,691
441
(22)
105
854
(28)
1,057
2,343
2,614
16,574
82
–
(1)
443
(37)
(53)
2,132
(37)
(522)
12,756
2,424
2,967
18,147
2,462
1,273
–
235
3,970
1,659
–
(127)
1,253
1,541
181
(6)
1
1,429
214
–
(1)
318
(22)
59
1,896
325
(6)
(32)
5,256
1,772
(28)
295
7,295
2,198
(6)
(160)
9,327
8,820
9,279
9,435
As at 30 September 2023
5,502
1,642
2,183
Net book value
As at 30 September 2023
At 30 September 2022
As at 30 September 2021
7,254
7,647
8,065
782
914
821
784
718
549
Notes to the Financial Statements continued Annual Report and Accounts 2023
173
Lease arrangements
Property, plant and equipment includes right-of-use assets in relation to 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:
At 1 October 2022
New leases
Lease payments
Interest expense
Depreciation charge
Foreign exchange movement
At 30 September 2023
Right-of-use
assets
£m
7,647
1,607
–
–
(1,659)
(341)
7,254
Current
Non-current
Lease
liabilities
£m
9,078
1,607
(1,979)
410
–
(374)
8,742
1,524
7,218
8,742
The contractual maturities on the undiscounted minimum lease payments under lease liabilities are provided
below:
Within 1 year
Between 1 and 5 years
Later than 5 years
Total undiscounted lease liabilities
2023
£000
1,942
6,489
1,702
10,133
2022
£000
2,937
6,339
2,447
11,723
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.
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Impax Asset Management Group plc
18 TRADE AND OTHER RECEIVABLES
See accounting policy at note 31 (O).
Trade receivables
Other receivables
Prepayments and accrued income
2023
£000
8,803
2,282
31,458
42,543
Accrued income relates to accrued management fees and arises where invoices are raised in arrears.
An analysis of the ageing of trade receivables is provided below:
0–30 days
Past due but not impaired:
31–60 days
61–90 days
Over 90 days
2023
£000
7,488
1,098
6
211
2022
£000
10,196
1,205
27,368
38,769
2022
£000
9,069
382
557
188
8,803
10,196
At the date of this report, substantially all of the trade receivables above have been received. As at
30 September 2023, the assessed provision under the IFRS 9 expected credit loss model for trade
receivables and prepayments and accrued income was immaterial (2022: immaterial).
£33,660,000 of trade and other receivables were due from related parties (2022: £32,954,000).
19 CURRENT ASSET INVESTMENTS
See accounting policy at note 31 (P).
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 current asset 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).
Notes to the Financial Statements continued Annual Report and Accounts 2023
175
At 1 October 2021
Additions
Fair value movements
Repayments/disposals
At 30 September 2022
Additions
Fair value movements
Repayments/disposals
At 30 September 2023
Total
£000
7,564
256
46
(611)
7,255
8,073
734
(2,792)
13,270
The investments include £4,647,000 in related parties of the Group (2022: £3,534,000).
Hierarchical classification of investments
The hierarchical classification of the investments as considered by IFRS 13 Financial Instruments: Disclosures
is shown below:
At 1 October 2022
Additions
Repayments/disposals
Fair value movements
At 30 September 2023
Level 1
£000
3,721
7,175
(2,315)
42
8,623
Level 2
£000
–
–
–
–
–
Level 3
£000
3,534
898
(477)
692
Total
£000
7,255
8,073
(2,792)
734
4,647
13,270
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 is 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 +/- £465,000.
Market risk and investment hedges
See accounting policy for derivatives at note 31 (Q).
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.
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20 INTERESTS IN UNCONSOLIDATED STRUCTURED ENTITIES
See accounting policy at notes 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 Review. 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 2023, AUM managed within unconsolidated structured entities was £37.40 billion (2022:
£35.68 billion) and within consolidated structured entities was nil (2022: £nil).
£178,367,000 (2022: £175,396,000) 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
2023
£000
37,159
13,270
50,429
2022
£000
35,069
3,534
38,603
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.
Notes to the Financial Statements continued Annual Report and Accounts 2023
177
21 CASH AND CASH EQUIVALENTS, 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 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
excluded from cash reserves. A reconciliation is shown below:
Cash and cash equivalents
Cash invested in money market funds
Less: cash held in RPAs
Cash reserves
2023
£000
37,963
53,542
(3,813)
87,692
2022
£000
52,232
58,687
(3,951)
106,968
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 3.0% (2022:
0.6%). 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 £713,000. An equal change in the opposite
direction would have decreased profit after tax by £627,000.
The credit risk relating to cash reserves held by the Group is spread over several counterparties. The Group
holds cash balances with RBS International and Bank of Ireland (both with Standard & Poor’s credit rating
A-2) and the Bank of New Hampshire, SMBC and Hang Seng (unrated). The remainder of the Group’s cash
reserves is invested in money market funds managed by BlackRock and Goldman Sachs, with a Standard &
Poor’s credit rating of A, and Santander, with a Standard & Poor’s credit rating of A-1.
22 TRADE AND OTHER PAYABLES
See accounting policy at note 31 (S).
Trade payables
Taxation and other social security
Other payables
Accruals and deferred income
The most significant accrual at the year end relates to variable staff remuneration.
2023
£000
730
1,166
4,833
38,080
44,809
2022
£000
1,078
1,981
4,738
45,827
53,624
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23 LOANS
See accounting policy at note 31 (T).
The Group had retained a US$13 million revolving credit facility (“RCF”) with RBS International which expired
in January 2023. No amounts were drawn down or repaid in the current or prior periods.
24 ORDINARY SHARES
See accounting policy at note 31 (U).
Issued and fully paid
At 1 October and 30 September
2023
No. of shares
000s
2022
No. of shares
000s
132,597
132,597
2023
£000
1,326
2022
£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.
25 OWN SHARES
See accounting policy at note 31 (V).
At 1 October 2021
Issuance of shares to EBT 2012
Satisfaction of option exercises and RSS vesting
At 30 September 2022
Purchase of shares by EBT 2012
Satisfaction of option exercises and RSS vesting
At 30 September 2023
No. of shares
4,103,395
1,078,000
£000
4,117
8,781
(1,916,286)
(4,770)
3,265,109
2,074,454
8,128
15,114
(1,065,287)
(4,637)
4,274,276
18,605
The EBT hold shares for RSS awards until they vest or to satisfy share option exercises. Included within
Own Shares are 2,695,682 shares held in a nominee account in respect of the Restricted Share Scheme as
described in note 9.
Notes to the Financial Statements continued Annual Report and Accounts 2023
179
26 FINANCIAL COMMITMENTS
At 30 September 2023 the Group has outstanding commitments to invest up to the following amounts into
private equity funds that it manages:
• €1,105,516 into Impax New Energy Investors III LP (2022: €1,276,000); this amount could be called on in the
period to 31 December 2026; and
• €952,658 into Impax New Energy Investors IV SCSp Luxembourg (2022: €1,446,977); this amount is called
on in the period to 31 October 2031.
The fund life for Impax New Energy Investors II LP ended during the Period and all remaining uncalled capital
commitments were cancelled (2022: outstanding commitments of €57,499).
27 RECONCILIATION OF PROFIT BEFORE TAX TO CASH GENERATED FROM OPERATIONS
This note should be read in conjunction with the consolidated cash flow statement. It provides a
reconciliation to show how profit before tax, which is based on accounting rules, translates to cash flows.
Profit before taxation
Adjustments for income statement non-cash charges/income:
Depreciation of property, plant & equipment and amortisation of intangible assets
Finance income
Finance expense
Share-based payment charges
Loss on disposals of property, plant and equipment
Adjustment for statement of financial position movements:
(Increase)/decrease in trade and other receivables
(Decrease)/increase in trade and other payables
Cash generated from operations
2023
£000
52,106
5,073
(3,130)
5,271
6,535
31
(3,774)
(8,894)
53,218
2022
£000
72,559
4,257
(7,950)
574
6,151
–
1,031
3,699
80,321
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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 held in money
market funds 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 ageing of
these is provided in note 18.
The Group makes no provision for credit loss as all trade receivable counterparties are funds managed by the
Group and have sufficient resources to satisfy their position.
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. A significant amount of income for the Group’s UK-based
business is denominated in Euros and US dollars whilst the majority of expenses are in Sterling.
The strategy for the UK-based business for the year ended 30 September 2023 has been to convert income
earned in currencies other than US dollars and Euros back to 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.
Notes to the Financial Statements continued Annual Report and Accounts 2023
181
The Group’s exposure to foreign exchange rate risk at 30 September 2023 is set out in the table below.
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
4,646
17,056
2,003
23,705
5,980
9,536
19,798
35,314
907
907
3,365
3,365
22,798
31,949
2,644
3,600
2,219
8,463
1,539
1,539
6,924
The Group’s exposure to foreign exchange rate risk 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
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28 FINANCIAL RISK MANAGEMENT CONTINUED
The following table demonstrates the estimated impact on Group post-tax profit and net assets caused by
a 10 per cent variance in the exchange rate used to revalue significant foreign assets and liabilities, assuming
all other variables are held constant. 10 per cent is considered a reasonable measure given the volatility in the
currency markets during the Period. Post-tax profit will either increase or (decrease) as shown.
Translation of significant foreign assets and liabilities
GBP strengthens against the USD, up 10%
GBP weakens against the USD, down 10%
GBP strengthens against the EUR, up 10%
GBP weakens against the EUR, down 10%
Post-tax profit
2023
£000
2022
£000
(2,492)
(2,960)
2,492
(1,778)
1,778
2,960
(1,612)
1,612
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
2023, the Group had cash and cash equivalents and cash in money market funds of £91,505,000. This is
£46,696,000 in excess of trade and other payables. The Group in addition had other current assets of
£57,458,000.
On a consolidated group basis the Group has capital of £62 million, a surplus of £39 million against our
internally determined capital requirement of £23 million.
Interest rate risk
Interest rate risk is the risk that the fair value or 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 (see Note 21).
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.
Notes to the Financial Statements continued Annual Report and Accounts 2023
183
Financial instruments by category
The carrying value of the financial instruments of the Group is shown below:
Financial
assets
measured at
FVPTL*
£000
Financial
assets /
liabilities at
amortised
cost
£000
Total financial
instruments
£000
Non-financial
instruments
£000
–
–
–
–
13,270
–
53,542
–
–
–
–
–
–
–
11,085
–
–
–
37,963
(5,563)
(8,742)
–
–
–
–
11,085
13,270
–
53,542
37,963
(5,563)
(8,742)
27,068
8,820
3,665
31,458
–
1,645
–
–
–
(39,246)
(44,809)
–
(1,007)
66,812
34,743
101,555
32,403
133,958
Total
£000
27,068
8,820
3,665
42,543
13,270
1,645
53,542
37,963
(8,742)
(1,007)
30 September 2023
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
Current tax liability
Total
* FVTPL = Fair value through profit and loss.
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28 FINANCIAL RISK MANAGEMENT CONTINUED
Financial
assets
measured at
FVPTL*
£000
Financial
assets /
liabilities at
amortised
cost
£000
Total financial
instruments
£000
Non-financial
instruments
£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)
–
–
Total
£000
32,272
9,279
4,781
32,272
9,279
4,781
27,368
38,769
–
176
–
–
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
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
* 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 Holdings 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.
During the year two loan facilities were provided to an executive director for the sole purpose of investment
in funds managed by the Group. The loans are provided at interest rates of 2.25% and 3.0% per annum on
amounts drawn, calculated on a daily basis. Total interest of €1,933 was accrued during the year and the total
balance of the two loans at the Period end was €292,194 (2022: €104,301).
Notes to the Financial Statements continued Annual Report and Accounts 2023
185
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 funds 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).
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31 ACCOUNTING POLICIES CONTINUED
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.
Notes to the Financial Statements continued Annual Report and Accounts 2023
187
(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.
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31 ACCOUNTING POLICIES CONTINUED
(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 by
assuming that the grant date is the reporting date.
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 statement of comprehensive income.
(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.
(J) Interest income and expense
Interest income and expense is recognised using the effective interest method.
Notes to the Financial Statements continued Annual Report and Accounts 2023
189
(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.
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Impax Asset Management Group plc
31 ACCOUNTING POLICIES CONTINUED
(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:
life of the lease
Leasehold improvements
three – five years.
Fixtures, fittings and equipment
(O) Trade and other receivables
Trade and other receivables 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 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 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.
(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.
Notes to the Financial Statements continued
Annual Report and Accounts 2023
191
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.
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Impax Asset Management Group plc
31 ACCOUNTING POLICIES CONTINUED
(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.
Notes to the Financial Statements continued Annual Report and Accounts 2023
193
Company Statement of Financial Position
As at 30 September 2023
Company No: 03262305
Assets
Intangible assets
Property, plant and equipment
Investments in subsidiaries
Trade and other receivables
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
Retained earnings
Total equity
2023
2022
Notes
£000
£000
£000
£000
33
34
35
36
36
37
24
68
3,771
55,021
13,234
3,296
13,270
211
105
791
1,326
9,291
1,533
55,006
76
4,723
48,098
13,819
72,094
66,716
2,462
7,255
–
14
1,179
17,673
89,767
10,910
77,626
1,326
9,291
1,533
50,041
67,156
62,191
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Impax Asset Management Group plc
Company Statement of Financial Position continued
As at 30 September 2023
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
2023
2022
Notes
38
39
34
34
£000
18,987
–
83
949
2,592
£000
20,019
2,592
89,767
£000
10,248
835
32
891
3,429
£000
12,006
3,429
77,626
Authorised for issue and approved by the Board on 28 November 2023. The notes on pages 197-207 form
part of these financial statements.
Ian R Simm
Chief Executive
Annual Report and Accounts 2023
195
Company Statement of Changes in Equity
For the year ended 30 September 2023
1 October 2022
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
Profit for the year
Transactions with owners
Dividends paid
Tax credit on long-term incentive schemes
Cash received on option exercises
Share-based payment charges
Acquisition of own shares
Total transactions with owners
30 September 2023
Share
capital
£000
Share
premium
£000
Merger
Reserve
£000
Retained
earnings
£000
Total
equity
£000
Notes
1,326
9,291
1,533
38,876
51,026
14
14
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
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
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
48,648
48,648
(36,376)
(36,376)
11
11
1,261
1,261
6,535
6,535
(15,114)
(15,114)
(43,683)
(43,683)
1,326
9,291
1,533
55,006
67,156
The notes on pages 197-207 form part of these financial statements.
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Impax Asset Management Group plc
Company Statement of Cash Flows
For the year ended 30 September 2023
Cash generated from/(used by) operations 41
Note
Corporation tax paid
Net cash generated from/(used by) operations
Investing activities:
Dividend received
Investments in subsidiaries
(New investments)/proceeds on sale of investments
(Settlement of)/proceeds from investment related hedges
Interest received
(Increase)/decrease in cash invested in money market funds
Purchase of intangible assets
Purchase of property, plant and 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 (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
2023
£000
12,567
(1,463)
11,104
47,045
(1,069)
(5,281)
(390)
932
(91)
(24)
(164)
40,958
(1,125)
(1,096)
2022
£000
(3,558)
(41)
(3,599)
38,135
(11)
355
69
4,154
36
(81)
(522)
42,135
(141)
(1,060)
(36,376)
(28,665)
(15,114)
1,261
(8,781)
540
(52,450)
(38,107)
(388)
1,179
791
429
750
1,179
Annual Report and Accounts 2023
197
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 £48,648,000 (2022: £42,736,000).
33 INTANGIBLE ASSETS
Cost
As at 1 October 2021
Additions
As at 30 September 2022
Additions
As at 30 September 2023
Accumulated amortisation
As at 1 October 2021
Charge for year
As at 30 September 2022
Charge for the year
As at 30 September 2023
Net book value
As at 30 September 2023
As at 30 September 2022
As at 30 September 2021
Software
£000
Total
£000
–
81
81
24
105
–
5
5
32
37
68
76
–
–
81
81
24
105
–
5
5
32
37
68
76
–
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Impax Asset Management Group plc
Notes to the Company Financial Statements continued
34 PROPERTY, PLANT AND EQUIPMENT
Cost
As at 1 October 2021
Additions
As at 30 September 2022
Additions
As at 30 September 2023
Depreciation
As at 1 October 2021
Charge for the year
As at 30 September 2022
Charge for the year
As at 30 September 2023
Net book value
As at 30 September 2023
As at 30 September 2022
As at 1 October 2021
Right-of-use
asset
£000
Leasehold
improvements
£000
Fixtures,
fittings and
equipment
£000
5,582
–
5,582
145
5,727
1,441
721
2,162
888
3,050
2,677
3,420
4,141
2,061
257
2,318
36
2,354
1,240
177
1,417
196
1,613
741
901
821
1,577
265
1,842
128
1,970
1,238
202
1,440
177
1,617
353
402
339
Total
£000
9,220
522
9,742
309
10,051
3,919
1,100
5,019
1,261
6,280
3,771
4,723
5,301
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 2022
Lease additions
Lease payments
Interest expense
Depreciation charge
At 30 September 2023
Right-of
use-asset
£m
3,420
145
–
–
(888)
2,677
Current
Non-current
Lease
liabilities
£m
4,320
145
(1,096)
172
–
3,541
949
2,592
Annual Report and Accounts 2023
199
The contractual maturities on the undiscounted minimum lease payments under lease liabilities are provided
below:
Within 1 year
Between 1 and 5 years
Total undiscounted lease liabilities
2023
£000
1,084
2,744
3,828
2022
£000
1,059
3,706
4,765
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 2021
Additions
Capital contribution
At 30 September 2022
Additions
Capital contribution
At 30 September 2023
The subsidiary undertakings are:
Total
£000
42,699
11
5,388
48,098
1,069
5,854
55,021
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
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Impax Asset Management Group plc
Notes to the Company Financial Statements continued
35 NON-CURRENT INVESTMENTS CONTINUED
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 Capital Limited
Kern USA Inc.
UK
UK
UK
USA
100%
100%
100%
100%
General partner to private equity fund
General partner to listed equity fund
Dormant
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 Asset Management Japan Limited
Impax Global Opportunities (GP) Limited
USA
Ireland
UK
USA
Japan
UK
100%
100%
80%
100%
100%
100%
Fund management
Fund management
Investment Partnership
Holding company
Fund management
General partner to listed equity fund
INEI IV Team Co-Investment SCSp
Luxembourg 69.7%
Investment Partnership
INEI IV GP S.à.r.l.
Luxembourg 100%
General partner to private equity fund
Impax US Holdings Limited***** (Company number:
04458819)
Impax New Energy Investors (GP) Limited*****
(Company number: 05529549)
Impax New Energy Investors II (GP) Limited*****
(Company number: 07081955)
UK
UK
UK
100%
Holding company
100%
Holding company
100%
Holding company
*
**
FCA regulated.
Hong Kong SFC regulated.
***
SEC regulated.
**** CBI regulated.
***** Subsidiary intends to take advantage of the exemption from a statutory audit granted by Section 479A of the Companies Act 2006.
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
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., INEI IV CIP SCSp, INEI IV
Team Co-Investment SCSp all have the address 42–44 Avenue de la Gare, Luxembourg, 1610. Impax Asset
Management Japan Limited has the address Level 20, Marunouchi Trust Tower – Main, 1-8-3 Marunouchi,
Chiyoda-ku, Tokyo, 100-0005, Japan.
Annual Report and Accounts 2023
201
Charges relating to options or other share awards over the Company’s shares granted to employees of
subsidiary undertakings are accounted for in the subsidiaries. In the Company financial statements the capital
contribution in respect of this charge has been recognised as an increase in the investment in subsidiaries.
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
2023
£000
22,088
32,933
55,021
2022
£000
21,019
27,079
48,098
2023
£000
2022
£000
–
–
1,461
1,835
3,296
13,234
13,234
116
11
1,079
1,256
2,462
13,819
13,819
As at 30 September 2023, the assessed provision under the IFRS 9 expected credit loss model for trade and
other receivables was immaterial (2022: immaterial).
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Impax Asset Management Group plc
Notes to the Company Financial Statements continued
37 CURRENT ASSET INVESTMENTS
At 1 October 2021
Additions
Fair value movements
Repayments/disposals
At 30 September 2022
Additions
Fair value movements
Repayments/disposals
At 30 September 2023
38 TRADE AND OTHER PAYABLES
Trade payables
Amounts owed to Group undertakings
Taxation and other social security
Other payables
Accruals
2023
£000
183
13,172
145
307
5,180
18,987
39 DEFERRED TAX
The deferred tax liability included in the Company statement of financial position is as follows:
As at 1 October 2021
Charge to equity
Credit/(charge) to the income statement
As at 30 September 2022
Charge to equity
Credit/(charge) to the income statement
As at 30 September 2023
Accelerated
capital
allowances
£000
Other
temporary
differences
£000
Share-based
payment
scheme
£000
Pensions
£000
(82)
–
(82)
–
–
(82)
–
–
–
–
–
36
36
(127)
–
(160)
(287)
–
(34)
(321)
1,790
(1,413)
(40)
337
(128)
75
284
£000
7,564
256
46
(611)
7,255
8,073
734
(2,792)
13,270
2022
£000
402
1,748
229
223
7,646
10,248
Total
£000
1,581
(1,413)
(200)
(32)
(128)
77
(83)
Annual Report and Accounts 2023
203
40 FINANCIAL COMMITMENTS
At 30 September 2023 the Group has outstanding commitments to invest up to the following amounts into
private equity funds that it manages:
• €1,105,516 into Impax New Energy Investors III LP (2022: €1,276,000); this amount could be called on in the
period to 31 December 2026; and
• €952,658 into Impax New Energy Investors IV SCSp Luxembourg (2022: €1,446,977); this amount is called
on in the period to 31 October 2031.
The fund life for Impax New Energy Investors II LP ended during the Period and all remaining uncalled capital
commitments were cancelled (2022: outstanding commitments of €57,499).
41 RECONCILIATION OF PROFIT BEFORE TAX TO CASH GENERATED FROM OPERATIONS
Operating activities:
Profit before taxation
Adjustments for:
Depreciation of property, plant and equipment
Finance income
Finance expense
Share-based payment expense
Adjustments for statement of financial positions movements:
Decrease in trade and other receivables
Increase/(decrease) in trade and other payables
Cash generated from/(used in) operations
2023
£000
2022
£000
48,663
44,376
1,293
1,105
(48,242)
(42,403)
1,297
453
443
8,660
12,567
345
627
3,952
(11,560)
(3,558)
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Impax Asset Management Group plc
Notes to the Company Financial Statements continued
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 reserves that are placed with regulated
financial institutions and amounts due from subsidiaries.
At the statement of financial position date, the credit risk relating to cash reserves of the asset management
business is spread over several counterparties. Cash reserves are held in RBS International (Standard & Poor’s
credit rating A-2) and the remainder in money market funds managed by BlackRock and Goldman Sachs
which both have a Standard & Poor’s credit rating of A. 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.
The Company’s exposure to foreign exchange rate risk at 30 September 2023 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
4,645
747
1
5,980
14,313
2
2,644
9
–
5,393
20,295
2,653
3
3
(2)
(2)
–
–
5,390
20,297
2,653
Annual Report and Accounts 2023
205
42 FINANCIAL RISK MANAGEMENT CONTINUED
The Company’s exposure to foreign currency exchange rate risk at 30 September 2022 was:
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 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 10 per cent movement in the exchange rate used to
revalue significant foreign assets and liabilities, assuming all other variables are held constant. 10 per cent
is considered a reasonable measure given the volatility in the currency markets during the Period. Post-tax
profit either increases or (decreases) as shown below:
–
–
–
–
–
–
–
Translation of significant foreign assets and liabilities
GBP strengthens against the USD, up 10%
GBP weakens against the USD, down 10%
GBP strengthens against the EUR, up 10%
GBP weakens against the EUR, down 10%
Post-tax profit
2023
£000
2022
£000
(1,583)
1,583
(537)
537
(1,448)
1,448
(296)
296
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 £896,000 (2022: £1,193,000) were its only financial instruments subject to variable interest rate risk. The
impact of a 1% increase or decrease in interest rates on the post-tax profit is not material to the Company.
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Impax Asset Management Group plc
Notes to the Company Financial Statements continued
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. Where appropriate the Company 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.
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 2023
Property, plant and equipment
Intangibles
Non-current investments
Current tax asset
Trade and other receivables
Investments
Cash invested in money market funds
Cash and cash equivalents
Deferred tax liability
Trade and other payables
Lease liabilities
Total
Financial
assets
measured at
FVPTL*
£000
Financial
assets/
liabilities at
amortised
cost
£000
Total financial
instruments
£000
Non-financial
instruments
£000
–
–
–
–
14,695
–
–
791
–
–
–
–
–
14,695
13,270
105
791
–
3,771
68
55,021
211
1,835
–
–
–
(83)
Total
£000
3,771
68
55,021
211
16,530
13,270
105
791
(83)
(13,662)
(13,662)
(5,325)
(18,987)
(3,541)
(1,717)
(3,541)
11,658
–
55,498
(3,541)
67,156
–
–
–
–
–
13,270
105
–
–
–
–
13,375
Annual Report and Accounts 2023
207
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
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
* FVPTL = Fair value through profit and loss.
The hierarchical classification of current investments measured at fair value are as follows:
At 1 October 2022
Additions
Disposals
Fair value
At 30 September 2023
Level 1
£000
3,721
7,175
(2,315)
42
8,623
Level 2
£000
–
–
–
–
–
There were no movements between any of the levels in the year (2022: £nil).
Level 3
£000
3,534
898
(477)
692
Total
£000
4,723
48,098
–
16,281
7,255
14
1,179
(835)
(10,248)
(4,320)
62,147
Total
£000
7,255
8,073
(2,792)
734
4,647
13,270
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Impax Asset Management Group plc
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 3.00 pm on 12 March 2024 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 2023
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 123-135 of the
Annual Report and Accounts for the year ended 30 September 2023. 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 re-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 elect Karen Cockburn as a Director.
10. To elect Julia Bond as a Director.
11. To reappoint KPMG LLP as auditor of the Company.
12. To authorise the Directors to fix the remuneration of the auditor.
13.
To declare a final dividend in respect of the financial year ended 30 September 2023 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 9 February 2024.
AS SPECIAL BUSINESS
To consider and, if thought fit, pass the following resolutions, resolution 14 of which will be proposed as
an ordinary resolution and resolutions 15, 16 and 17 of which will be proposed as special resolutions:
14.
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
Annual Report and Accounts 2023
209
(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 12 June
2025) 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.
15.
THAT, subject to the passing of resolution 14 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 14 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 15(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 12 June 2025), 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.
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Impax Asset Management Group plc
Notice of Annual General Meeting continued
16.
THAT, subject to the passing of resolution 14 above, the Directors of the Company be and are hereby
empowered in addition to any authority granted under resolution 15(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 12 June 2025), 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.
17.
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
14 December 2023
Annual Report and Accounts 2023
211
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 3.00 pm on
8 March 2024.
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 3.00 pm on 8 March
2024. 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 8 March 2024 (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 & International 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 & International 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 6 December 2023 (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.
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Impax Asset Management Group plc
Memberships
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
• Climate Action 100+
• NH Businesses for Social Responsibility
• Plastic Solutions Investor Alliance (As You Sow)
• Climate Financial Risk Forum (CFRF)
• Powering Past Coalition Alliance
• Confederation of British Industry (CBI)
• Principles for Responsible Investment (PRI)
• Council of Institutional Investors (CII)
• PRI Sustainable Stock Exchanges Working Group
• 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 (USSIF)
(TNFD)
• Global ESG Benchmark for Real Assets (GRESB)
• The Investing and Saving Alliance (TISA)
• Global Impact Investing Network (GIIN)
• Thirty Percent Coalition
• Institutional Investors Group on Climate Change
• Tobacco Free Portfolios
(IIGCC)
• Interfaith Center on Corporate Responsibility
(ICCR)
• Investor Environmental Health Network (IEHN)
• Long-term Investors in People’s Health Initiative
(LIPH)
• UK Stewardship Code
• UK Sustainable Investment and Finance
Association (UKSIF)
• Women’s Empowerment Principles
• Women in Finance
Annual Report and Accounts 2023
213
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 credits and charges in respect of national insurance payable on share awards; and
• foreign exchange gains and losses on the retranslation of monetary assets that are not linked to the
operating performance of the Group.
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. Mark-to-market credits and 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
monetary assets are excluded as they are not linked to the operating 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.
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Impax Asset Management Group plc
Alternative Performance Measures continued
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.
Annual Report and Accounts 2023
215
REGISTRARS
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds
LS1 4DL
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
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Officers & Advisers
DIRECTORS
Sally Bridgeland (Chair)
Ian Simm (Chief Executive)
Lindsey Brace Martinez (Non-Executive)
Arnaud de Servigny (Non-Executive)
Simon O’Regan (Non-Executive)
Annette Wilson (Non-Executive)
Vince O’Brien (Non-Executive)1
Karen Cockburn (Chief Financial Officer)2
Julia Bond (Non-Executive)3
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
1 Retired 16 March 2023.
2 Appointed 16 March 2023.
3 Appointed 29 November 2023.
216
Impax Asset Management Group plc
Notes
Printed by a CarbonNeutral® Company certified to ISO 14001 environmental
management system.
This product is made using recycled materials limiting the impact on our
precious forest resources, helping reduce the need to harvest more trees.
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.
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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
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