A number of leading ethical investment funds continue to hold shares in Irish building materials business Kingspan.
This is despite the highlighting of unacceptable conduct within its UK insulation business at the inquiry into the Grenfell Tower fire that killed 72 people – shortcomings that resulted in its combustible K15 insulation boards being used in the tower’s cladding. The company has ‘apologised unreservedly’.
Analysis conducted by investment house SCM Direct for The Mail on Sunday shows that numerous big ethical funds still have key holdings in Kingspan. Based on shareholder data from Bloomberg, SCM Direct says ethical funds run by Baillie Gifford, Guinness Asset Management, Impax, Liontrust, Pictet and Schroder all have stakes in the company.
Tragedy: The Grenfell Tower fire killed 72 people and is currently the subject of an inquiry
For example, the £675million Liontrust UK Ethical fund has a 3.4 per cent holding while the £725million Liontrust Sustainable Future UK Growth has a 2.8 per cent position. Until late last year, the £2billion Baillie Gifford Positive Change fund had Kingspan as a top ten holding, with 3.9 per cent of its assets in the company. But last month, it reduced this stake.
Retired marketing executive Michael Heppner, from North London, is a big fan of Baillie Gifford and has several holdings in its investment funds and trusts. He was about to invest in Positive Change until he saw it had a holding in Kingspan. ‘How can such an unethical company be included in the portfolio of an ethical investment fund?’ he asks.
Baillie Gifford told the MoS: ‘We have discussed the Grenfell Tower Inquiry with Kingspan and continue to monitor the situation closely. We cannot comment further while the inquiry is ongoing.’
Liontrust said its sustainable investment team had been investing in Kingspan for more than 15 years. But it said the revelations from the inquiry had raised ‘serious concerns about the culture and controls’ within Kingspan’s business. It had now ‘downgraded’ the company’s sustainability rating, put a freeze on further investments in Kingspan, and had requested a meeting with its management.
SCM Direct’s Alan Miller says investment funds should be required to regularly disclose to the public all their holdings, as this would allow ethical investors to ‘judge whether or not they wish to hold a fund containing stocks such as Kingspan’.
