Reducing emissions provides new investment opportunities

The Fund DNB Renewable Energy has recently participated in two IPOs, we consider these companies particularly innovative in addressing reduction in greenhouse gas emissions.

At present these investments are small, but if they succeed, we believe they have great growth potential. We will consider larger investments in the portfolio in the longer term.

Traditional cement production is a massive source of emission

Hoffmann is one of the new companies we have invested in. They have a new and enhanced proprietary process for the production of cement, that removes the part which causes most of the CO2-emissions.

Emissions in this industry account for as much as seven percent of greenhouse gas emissions globally. The cement market is large and cement is an area that is difficult to play in the stock market. However, we believe this company has an interesting angle and may very well change how cement is produced in the future. By changing the process Hoffman reduces emissions by around 80 percent compared to conventional Portland cement production, without sacrificing product features!

Upcoming regulations on allowable emissions will probably also strengthen the company's competitive position. Both in terms of cost and requirements, they are well-positioned. The company has already established a track record in terms of production, and they have signed sales contracts on attractive terms. We expect them to commercialize the business further swiftly.

Only recently we met the management of Hoffmann and visited their factory near Nantes. We were impressed! We saw that an old industry, that has barely evolved over the last 200 years, can be modernized with technology and automation.