The concept of ‘responsible investing’ is becoming increasingly popular with stock investors. It seems likely that demand for ESG stocks — those shares that are associated with strong environmental, social, and governance initiatives — is likely to keep growing strongly too.
The experts over at Bloomberg reckon that investment in ESG assets will soar to $50trn in 2025. That compares with current investment levels of around $35trn.
As Maxim Manturov, Head of Investment Advice at broker Freedom Finance Europe (FFE), commented: “Between changing global conditions and changing consumer interests, sustainability has become an important factor in today’s business strategy.”
Fighting livestock emissions
One popular area of interest for UK share investors is the fight against climate change. And Manturov notes that “the potential and popularity of companies who aim to reduce or offset the harmful effects of human activity” is growing as the battle intensifies
FFE believes that attempts to reduce emissions from livestock farming offers opportunities for investors.
The booming meat-free market
The broker points out that animal farming is responsible for 14.5% of all human-created greenhouse gases. This is equivalent to the pollution created by all forms of transport combined.
FFE has highlighted the massive potential of companies that produce meat substitute products in helping reduce livestock-related emissions. Manturov quotes Bloomberg figures suggesting that “the global plant protein market will grow to £123bn by 2030.”
2 exciting IPOs for 2022
This means that sales of plant-based meat and fish alternatives could account for 5% of the global meat and fish market. And FFE has identified two meat substitute manufacturers whose initial public offerings (IPOs) are anticipated in 2022. These are:
Impossible Foods
California-based Impossible Foods manufactures artificial meats and plant-based cheeses using “specific proteins and biologically significant elements from greens, seeds, and grains”.
Manturov says that Impossible Foods’ main aim “is to combine the pleasure of food with the safety of that same food for both human health and the environment by eliminating animals from the production chain.”
Impossible Foods has raised a total of £1.6bn in funding, with the latest round of investment coming in November. Back then, Mirae Asset Global Investments ploughed £381.7m in the company.
Huel
Hertfordshire-based Huel manufactures plant-based products such as powders, drinks and snacks. It has expanded into international markets and operates in mainland Europe, the US and Japan.
In the year to July 2020, Huel reported a turnover of £71.6m, FFE notes. This was up 30% year-on-year.
The company has an estimated market capitalisation of £1bn. And it has reportedly appointed Goldman Sachs and JP Morgan as advisers for a potential IPO later this year.
FFE also notes that “investment banks are also advising a potential sale of Huel, although an IPO is considered the preferred option.”