Several initial public offering candidates in Europe are emphasizing their potential to help in the transition to a greener future, as the global energy crisis intensifies.
Leading the pack is automaker Volvo Car AB, which is planning to go fully electric by 2030. Also in the mix are Dutch electric bus company Ebusco and U.K. firms Pod Point, which operates charging bays, and Tesla Motors Inc. partner Harmony Energy Income Trust, a battery-storage infrastructure fund.
Governments have been pushing for greater sustainability and cleaner fuel for years, while investors bet heavily on green assets. Now, an unprecedented surge in power and natural gas prices has brought the need for diversified energy sources into even sharper focus.
“Greentech makes sense,” said Fabio Pecce, chief investment officer at green hedge fund Ambienta X Alpha. “But what investors as a flock sometimes get wrong is the valuation at which an offering should be brought, and at what stage of the company’s development.”
Lofty valuations have been a sore point in Europe’s IPO market recently, scuttling a raft of listings. But with new deals joining the fray every day, it pays to stand out from the crowd. Even radiator maker Stelrad is pitching its products as cleaner alternatives to gas boilers in its London listing.
Others are marketing themselves more directly as a solution to the energy crisis. Harmony Energy plans to build power-storage sites across the U.K. using Tesla batteries, with the aim of selling energy back to the grid when demand is high.
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To be sure, touting social, governance and environmental credentials in the IPO market doesn’t guarantee success, as concerns about a bubble in green stocks have weighed on some new listings this year. And regulators are increasingly taking aim at so-called “greenwashing,” whereby sustainable investing claims aren’t substantiated.
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