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Follow top ESG fund managers into green-leader Kingspan

The insulation specialist will be squeezed during a down cycle, but increasing urbanisation and regulatory tailwinds should drive long-term demand
Follow top ESG fund managers into green-leader Kingspan

The International Energy Agency (IEA) estimates that the buildings and construction sectors account for more than a third of global energy consumption and almost two-fifths of carbon emissions. That places improving the energy efficiency of buildings high on the climate change agenda – good news for Dublin-listed Kingspan (KGP), a specialist in high-performance insulation and ‘building envelope’ solutions. Enjoying market-leading positions around the world, its products reduce energy usage by managing moisture, temperature, light and air quality.

IC TIP: Buy at 50.35€
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Structural growth drivers

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These green credentials have proved a hit with funds focused on environmental, social and governance (ESG) criteria. Kingspan is the second-largest holding of the top performing Liontrust Sustainable Future UK Growth Fund (GB0030028764) for which energy efficiency is a key investment theme. And manager Peter Michaelis says the group should be capable of “posting ongoing growth despite concerns around global demand”. Meanwhile, Pictet Asset Management holds shares across a number of its funds. Steve Freedman, senior product specialist in the thematic equities team, recently told Investors Chronicle he likes the “powerful” structural demand drivers: “rapid urbanisation, which could lead building floor area to almost double by 2050, and tightening regulations”.

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