It can be hard to quantify the real appetite for ESG-focused businesses among UK investors, but the fourth quarter of 2021 brought proof in the form of seven businesses holding the London Stock Exchange’s ‘Green Economy Mark’ engaging in successful IPOs – three of which were advised by finnCap.

The mark is hard to obtain, with companies that wish to display it having to generate between 50% and 100% of total annual revenues from products and services that contribute to the global green economy. As I write, 101[1] businesses across all markets and sectors have been awarded it, so to see seven come to market in just three months illustrates just how much appetite there is among investors, small and large, for stakes in the green business of the future.

finnCap acted as sole broker to three of the seven issuances[2], for decarbonisation business Eneraqua, for Gelion, which is developing zinc bromide batteries and additives for lithium-ion batteries, and for Atome Energy, which was spun out of our client President Energy and is the first green hydrogen and ammonia production company listed on the UK market. The success of these IPOs looks set to fuel even more ESG-focused floats in the coming months as investors continue to demonstrate that their focus on investing for “good” is no longer marginalised or transient.

To illustrate this, here’s a striking statistic. If the companies holding the LSE Green Economy Mark were considered as a sector in their own right, that sector would be the fourth-largest by capital raised across the exchange in the last three years.[3]

The percentage of successful floats with a sustainable focus is only likely to grow in the coming years, and at finnCap, we look forward to acting for many more. We pride ourselves on offering services for the businesses of tomorrow. As the green energy transition accelerates, and investors continue to vote for change with their feet and their wallets, the likes of Gelion, Atome and Eneraqua will increasingly be the businesses of choice for investors today.
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[1] https://www.londonstockexchange.com/raise-finance/equity/green-economy-mark/green-economy-mark-report-2021

[2]https://www.lseg.com/resources/media-centre/press-releases/london-stock-exchange-raises-most-ipo-funding-2007-marking-strong-year-lseg-capital-markets

[3] https://www.lseg.com/resources/media-centre/press-releases/london-stock-exchange-raises-most-ipo-funding-2007-marking-strong-year-lseg-capital-markets