ABGSC on the EU taxonomy: “The green shift” is here

Haakon Amundsen is an Equity Research Analyst at ABGSC, covering companies in the Oil & Oil Services sector and the Renewable Energy sector.
In an interview, he shared his thoughts on the challenges and opportunities associated with the EU Taxonomy for Sustainable Activities, ahead of ABGSC’s upcoming “Green shift” lunch seminar.
 
How is EU taxonomy affecting Norwegian (or Nordic) companies?
“The EU taxonomy is affecting capital allocation and hence the cost of capital for companies in various industries”, Amundsen explains. “This will affect their access to financing and how they prioritise investments”.
 
What industries will be most affected?
“Well, the EU taxonomy is a classification system which establishes a list of environmentally sustainable economic activities. The classification will determine how each industry is affected; the intention is to ensure that capital is allocated to environmentally sustainable activities. Clearly, industries such as fossil fuel producers will be affected as parts of the business are not deemed sustainable, while others may be in a transition period. For an energy company, this could impact how it ranks its investments between solar, gas and heavy oil, for example”.
 
Do investors need to adapt their investment strategies?
“Investors have already prepared for the taxonomy in their investment strategies and their product offerings, and will likely continue to do so. Market sentiment will always be volatile, but regardless of the view a single investor has on it, we think it is necessary to understand the framework to make informed decisions on investments”.
 
What can we expect from “The green shift” seminar?
“We hope to hear directly from professional investors on how they adapt to this environment and from the companies on how they conduct operations and plan for the future during this energy transition and in light of the taxonomy classification system”.
 
What is the impetus for holding it now?
“The energy transition has started and will remain an important driver for the financial market in affected industries. This is clearly  important for investors to remain informed about, especially with EU’s accelerated ambitions following the tragic war in Ukraine”.
 
“The green shift” lunch seminar will be held on 9 June at ABGSC’s Oslo office.
Please note, the event is for clients only.
More information is available to clients here.