Kingspan shareholder cuts stake over Grenfell fire link

Liontrust Asset Management lowered its sustainability rating of Kingspan last month, saying the Grenfell inquiry has 'raised serious concerns about the culture and controls within the insulation business at Kingspan'

Grenfell Tower in west London: Kingspan was unaware its product was used on the tower until after the fire, chief executive Gene Murtagh told staff.

A long-time Kingspan shareholder reduced its stake on concerns about the Irish giant's insulation business raised by an inquiry into England’s deadliest fire in 75 years.

Liontrust Asset Management lowered its sustainability rating of Kingspan last month, triggering the sale of some stock held by its funds, the company said. The London-based asset manager owned 1.2% of Kingspan at the end of last year after shrinking its holding to about 2.2 million shares from 2.6 million at the end of the second quarter. 

Kingspan’s shares ended over 2.5% lower. Kingspan last month acknowledged “unacceptable conduct” at its UK insulation business after revelations at the public investigation into the deaths of 72 people in the 2017 Grenfell Tower blaze in London. 

The company was unaware its product was used on the tower until after the fire, chief executive Gene Murtagh told staff after the inquiry unearthed messages between employees in which they joked about general product safety.

The Grenfell inquiry has “raised serious concerns about the culture and controls within the insulation business at Kingspan,” Liontrust said. The rating downgrade “means we view a company as higher risk and its weighting in our portfolios should be smaller,” it said. 

Kingspan has long been a top pick for fund managers looking to buy into environmental stocks. Its appeal to green investors is simple: buildings are responsible for about 40% of the EU's greenhouse gas emissions from energy use, and insulation can help cut carbon emissions.

Liontrust said Kingspan’s statement last month on the inquiry showed the company “will learn from their mistakes and are taking appropriate actions to ensure that such conduct never happens again”. 

Still, the asset manager said it would reserve judgment until the inquiry concludes, and would maintain its stake as it engages with Kingspan’s management.

About 5% of the insulation boards sold for use in Grenfell Tower were from Kingspan, Kingspan has said. Last month, shares in Kingspan also fell sharply, helping strip billions of euro from Kingspan's stock market value since the company started giving evidence to the inquiry. 

The company makes insulated panels and boards for world markets and some of that product, Kooltherm K15, was used in the refurbishment of the Grenfell Tower block. Most of the insulation came from another firm, Celotex.

Kingspan had said on its website it condemned "any actions that do not demonstrate a proper commitment to fire safety". 

• Bloomberg and Irish Examiner