Biden’s IRA Has $46 Billion Manager in London Reviewing Options
Impax has started looking at assets once deemed too volatile or expensive, after doing a deep analysis of how US subsidies will ripple through supply chains.
The smoke stacks at American Electric Power's (AEP) Mountaineer coal power plant in New Haven, West Virginia. In cooperation with AEP, the French company Alstom unveiled one of the world's largest carbon capture facilities at a coal plant, so called "clean coal.”
Photographer: SAUL LOEB/AFPImpax Asset Management Group Plc, one of the world’s largest ESG fund managers, is exploring stocks and sectors it once avoided as the US Inflation Reduction Act redraws the green investing map.
The IRA, which promises to inject at least $369 billion into clean energy, is a game changer for the future of ESG investing, said David Winborne, a senior portfolio manager at Impax in London. Until now, the returns on renewable assets had tended to look unappealing because of the fragmented nature of the industry, but “we have a sense that’s starting to turn because it’s now a more consolidated industry with potentially more pricing discipline emerging,” he said in an interview.
Half a year after it was signed into law by President Joe Biden, markets are still analyzing the IRA’s impact on green assets and the supply chains that feed them. Its political fallout is also still playing out. The European Union, which suddenly finds itself on the back foot after long accusing the US of lagging behind in green initiatives, is trying to figure out a coordinated response to what it has characterized as protectionism.
The European Union is discussing how to counter the US green subsidy package and tackle the challenge of ending its dependence on Russian energy and rebuilding Ukraine. Options range from simply reshuffling existing funds and bolstering the European Investment Bank to additional joint borrowing to create new tools and topping up its common budget.