Sustainable Investor Impax Adds First ETF

ETFs are a sustainable business, as anyone following the flows might notice.

Long-time sustainable shop Impax Asset Management jumped into the US exchange-traded fund market last week, converting a $100 million mutual fund into the Global Infrastructure ETF (BLDX). And there’s likely more to come, Impax North America president Ed Farrington told ETF Upside.

“It’s easy to see via flows that, for many investors, the ETF is becoming a preferred vehicle. What’s really changed in the past few years is the growth of active ETFs,” he said. “The plan now is to look at each of our funds and see if there are others that might be candidates for conversion.”

Always Bring Something to Share

A big question for any of the mutual fund providers that have recently added ETFs, or converted existing products, is why not just tack on an ETF share class. Last year, a record 60 mutual funds converted to ETFs, Morningstar’s Ben Johnson recently said. The Securities and Exchange Commission recently started letting some companies use dual-share classes, and Impax is among the many asset managers awaiting the all-but-certain SEC approval. The company likely will add ETF shares of mutual funds in the future, and it may also consider whether new strategies should be launched solely as mutual funds or ETFs, Farrington said. In the case of BLDX, it made more sense just to shift to an ETF, as none of the shareholders held the fund in an employer-sponsored retirement plan, he said. “The vast majority were taxable clients,” he said. “In this case, it was really just an easy decision, because [the ETF] was the preferred vehicle for the advisors who are using that particular strategy.”

The conversion comes at a trying time for the sustainable investing world:

• After years of net inflows globally in sustainable mutual funds and ETFs, peaking at $650 billion in 2021, sales went negative last year, according to a recent report by Morningstar. Net outflows in 2025 were about $84 billion, compared with $38 billion in net inflows in 2024. In the US specifically, sustainable funds as a category have bled assets for several years.
• There has been pushback, mostly from Republican leaders at the state and federal levels, against environmental, social and governance criteria for years. But the Trump administration has amplified that, blocking funds for sustainable energy projects and working to prop up the fossil fuel industry.

Blacklisted No More? Separately, a federal judge ruled last week that a Texas anti-ESG law is unconstitutional. That state, which has a blacklist of asset managers that allegedly boycott the oil and gas industry, has prohibited state funds from doing business with companies on the list, including Impax. “There’s never a dull moment these days when it comes to politics,” Farrington said. The company has stuck with its investment thesis based on an “understanding that the world is in transition … Things move from less efficient to more efficient and from more polluting to less polluting.”