Efficiency solutions offer potential for growth, says BNP Paribas
The environmental sector contains a number of sub-sectors that are set to grow faster than the rest of the economy, said head of development at BNP Paribas, Eric Borremans.
BNP Paribas Investment Partners had been investing in the environmental sector for the past 15 years and has been active in ‘sustainable investment solutions’ (SRI) for the last ten years. In 2002, BNP Paribas launched its first European equity fund. Since 2006, BNP Paribas has worked in partnership with Impax, an asset management company with 18 years’ experience in the environmental sector.
With 25 investment partners and 60 investment centres (ten of them specifically covering sustainable investment solutions), they currently have about €15bn in assets under management.
Bruce Jenkyn-Jones, managing director of Impax, said “the CPI (consumer price index) has surged over the last ten years. It is now at a tipping point due to the fact that people are getting richer more quickly than ever before, and therefore are consuming many more resources.”
Efficiency solutions offer potential for growth at a time of scarce resources, Borremans and Jenkyn-Jones believe. “Unlike pollution control driven by regulations, efficiency solutions are very much driven by pure economics. Businesses invest in efficiency solutions because it makes sense, not because they are obliged to do so by the regulators,” Borremans said.
Parvest Global Environment, a Luxemburg Sicav umbrella fund launched in 2008, has an average invests largely in efficiency solutions for water infrastructure, waste management and energy. “On the stock market, renewable energy is having a hard time competing with efficiency solutions, which are largely expanding,” says Bruce Jenkyn-Jones.