The mispriced megatrend hiding in plain sight, and why it’s accelerating now

Please note this interview was filmed Friday 27 March, 2026.

Markets today are being pulled in multiple directions. Geopolitical tensions, energy security concerns, inflation, and shifting risk appetite are dominating the short-term narrative. But when I sat down with Ian Simm, founder and CEO of Impax Asset Management, it became clear that focusing only on near-term noise risks missing something far more significant.

Simm's lens is firmly long-term. Rather than anchoring on cycles, he is focused on structural change - specifically the transition to a more sustainable economy and the investment opportunities that come with it. What stood out most was not just the scale of that transition, but how underappreciated he believes it remains in current valuations. 

He brings an unusual rigour to that conviction: a physics degree from Cambridge, a master's from Harvard, time at McKinsey, and a willingness to back his own judgment that eventually led him to build Impax from scratch.

That streak of determination showed up long before the boardroom. Simm once led the first summer crossing of the Sahara Desert by tandem bicycle, a test of patience, discipline, and endurance.

"There's quite a significant underpricing at the moment of the opportunity for this transition to a more sustainable economy. I think the energy security crisis, or the current energy security crisis, is a real eye-opener or wake-up call in that context."

That single idea runs through everything Impax is doing. From renewable energy and power grid investment to water infrastructure and AI-driven efficiency, Simm sees a multi-decade shift that is still not fully reflected in stock prices. For investors willing to look beyond short-term uncertainty, the opportunity may be far broader and more mispriced than many realise.

Interview summary

A market dominated by uncertainty

Simm describes today’s investment environment as one shaped by uncertainty. Inflation, interest rates, fossil fuel supply, and geopolitical tensions are weighing on sentiment and pushing investors toward a more cautious stance.

“The most important thing is to see the elephant in the room, which is that we're in a highly uncertain risk environment. If a risk-off mindset dominates, then people will move out of equities.”

While short-term positioning is being driven by risk appetite, Simm stresses the importance of stepping back. From a longer-term perspective, current disruptions are reinforcing, not weakening, key structural trends.

“There’s a real opportunity to look at renewable energy and energy security as a response to what's been going on in the Middle East. Also, with AI, there are a number of opportunities to look at the implications of that for efficiency.”

AI, water and the next wave of investment

While AI dominates headlines, Simm frames it as both a direct and indirect investment opportunity.

"Companies are using AI to improve the efficiency of their business processes. That should lead to cost reduction and therefore higher investment returns.”

At the same time, the AI buildout is resource-intensive, particularly in energy and water.

“The whole water sector is fascinating. There’s a shortage of water in many parts of the world, and the AI sector itself is requiring a lot of water.”

This creates second-order opportunities in water infrastructure, conservation technologies, and industrial efficiency. Beyond AI, Simm also highlights areas such as recycling and smart materials as part of a broader resource efficiency theme.

Multiple drivers behind a structural shift

Rather than a single catalyst, Simm points to a combination of forces driving the transition to a more sustainable economy.

“I wouldn’t say there’s one which is the standout. There’s a general sense that technology change is really upending lots of businesses at the moment.”

Technology is improving efficiency and reducing resource intensity. Governments are shaping markets through regulation, from renewable energy deployment to energy-efficient buildings and climate resilience infrastructure. At the same time, consumer behaviour is shifting.

Electric vehicles are a clear example of this convergence.

“I think we're sort of at a point of inflexion… five years from now, we're going to be in a completely different landscape where buying an electric vehicle is the norm.”

What resilience really looks like

For Simm, resilience is less about financial metrics and more about how companies think and prepare.

“Probably the most important thing is scenario analysis.”

He looks for management teams that actively consider a range of outcomes and adapt accordingly.

“We want to see that management teams and boards are looking at a variety of possible outcomes… what might go well, what might go badly, and the corporate response in terms of strategy, in terms of cost management.”

Equally important is a forward-looking mindset, with companies searching for new sources of growth while remaining alert to emerging risks.

“It’s this sort of big radar, holistic view that gives us a strong impression that resilience is at the top of the agenda for management teams.”

Where markets are mispricing the opportunity

Simm believes markets are underestimating both the scale and urgency of the sustainability transition.

“What we're going to see over the next three or four years is a much greater acceleration of the deployment of renewable energy, strengthening of power grids and a determination that energy efficiency will be at the top of agendas.”

Energy security is acting as a catalyst, accelerating investment in renewables and infrastructure. At the same time, climate-related risks are becoming increasingly visible, particularly in regions like Australia, the US, and the UK.

“I think everywhere on the planet is affected by changing weather.”

This is driving investment not only in mitigation, but also in adaptation. Flood defences, water systems, and resilient infrastructure are likely to see sustained capital flows, yet Simm believes many of these opportunities remain underappreciated.

ESG backlash and the path forward

Simm acknowledges the recent ESG backlash, but views it as partly cyclical and partly political.

“ESG is a bit of a confusing acronym, because it blends together capitalist ideas around governance and more political or ethical ideas around helping the planet through investment.”

He points to the dominance of AI-driven returns, which has left sustainability-focused strategies out of favour, as well as political pressure, particularly in the US, around ESG labelling.

But he argues the underlying investment case remains intact and increasingly difficult to ignore.

“This idea that there are business opportunities around improving the efficiency with which resources are used and reducing pollution, I think just about everybody can agree that those are things which ought to take place.”

Rather than framing it as an ethical debate, Simm sees it as a clear economic opportunity.

“For those investors who are neutral around these sorts of ESG issues, then there’s a massive opportunity.”