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Candriam, a Luxembourg-based financial firm managing over $150 billion in assets, has been accused by an industry insider of “greenwashing” after they revealed the company has continued to invest in Kingspan, the Irish firm linked to the 2017 Grenfell Tower fire that claimed 72 lives.
The Grenfell Inquiry’s final report heavily criticised Kingspan, outlining a “complete disregard for fire safety” and “deeply entrenched and persistent dishonesty” in how it marketed one of its insulation products, used on the building.
Despite this, Candriam included Kingspan in its “sustainable” investment portfolios, raising concerns about the firm’s commitment to ethical investing. Sources argue that Candriam falsely presented its investments as adhering to Environmental, Social, and Governance (ESG) principles, even though Kingspan’s safety record and role in the Grenfell fire were clear.
Candriam’s Ethical Claims Challenged
One source told Byline Times that the company kept Kingspan in its sustainable portfolios, justifying the decision by focusing on engaging with the company on governance and board diversity issues rather than addressing the more serious safety concerns tied to Kingspan’s products. “If asset managers were genuinely interested in improving ESG credentials of investee companies, the system would have been totally different,” they said.
At the heart of the complaint are allegations of “greenwashing”— the practice of exaggerating or falsely claiming environmental and ethical credentials. Candriam’s decision to continue to include Kingspan in its Article 9 funds, which are intended for investments that prioritise sustainability, was particularly raised.
According to ESG principles, these funds should avoid causing harm to social or environmental objectives. Candriam’s continued investment in Kingspan seems to contradict this.
Candriam responded to their former employer’s claims by stating: “Candriam has engaged actively with Kingspan since the tragic events surrounding the Grenfell Tower fire, focusing on improving governance, risk management, and safety practices. We have seen progress in Kingspan’s governance, which has been outlined in a detailed case study that we have published on this matter.”
Kingspan’s Role in the Grenfell Fire
The Inquiry into the Grenfell Tower fire exposed serious corporate failings, and Kingspan’s K15 insulation boards, though only accounting for 5% of the insulation used on the tower, have been heavily scrutinised.
Kingspan claimed that its product met fire safety standards for high-rise buildings, but internal tests from 2007 and 2008 showed the opposite. Despite this, the Inquiry found that the company continued to market K15, relying on a fire safety certificate obtained in 2009 that contained false information.
The second phase of the Grenfell Inquiry, published in September 2024, concluded that Kingspan “knowingly created a false market” for its K15 insulation. Rather than withdrawing the product, the company manipulated regulatory processes to maintain its market position.
The report decided that Kingspan had misled the British Board of Agrément (BBA), the body responsible for certifying product safety, by hiding crucial details about K15’s fire safety performance.
A Kingspan spokesperson defended the company, telling Byline Times: “The report explains clearly and unambiguously that the type of insulation (whether combustible or non-combustible) was immaterial, and that the principal reason for the fire spread was the PE ACM cladding, which was not made by Kingspan.”
While Kingspan has acknowledged failings in its UK insulation business, it maintains that these were not the cause of the Grenfell disaster.
Candriam’s Investment Strategy Under Scrutiny
Despite Kingspan’s disputed and controversial role in the Grenfell tragedy, Candriam continued to invest in the company, leading to serious questions about its ESG commitments.
Critics argue that Candriam put profit over ethics by continuing to hold Kingspan shares in nine of its sustainable funds, including the Candriam Fund Sustainable European Equities Fossil Free and Candriam Sustainable Equity Climate Action.
The insider source who has spoken to this paper claims that Candriam held onto Kingspan shares to ride out the company’s reputational damage, engaging in what it called “shareholder engagement” rather than divesting.
They said: “In a genuine sustainable investment system, a stock which no longer qualifies for SFDR Article 9 would be moved to a non-sustainable portfolio straight away.”
They said that by delaying divestment, Candriam may have been more concerned with profit than driving real change.
As of today, Kingspan’s share price has nearly doubled since the Grenfell fire, from $34.5 to $85.9.
In 2024, Kingspan was part of a £150 million out-of-court settlement with the UK Government, acknowledging its role in the fire, though calls to ban the company from public contracts continue.
Broader Concerns About Candriam’s Investments
Candriam’s involvement with Kingspan is not an isolated case. The firm has faced criticism over its investments in other controversial companies, such as ArcelorMittal, which was implicated in a deadly coal mine explosion in Kazakhstan in 2023 that killed 46 miners. Despite ArcelorMittal’s poor safety record, Candriam continued to invest in the company through its non-sustainable funds.
Additionally, Candriam retained Tesla in its portfolios, even after Tesla was excluded from the S&P Dow Jones ESG Index in 2022 over concerns about racial discrimination, accidents linked to its autopilot feature, and the company’s “lack of a low-carbon strategy”. Speaking at the time, Tesla CEO Elon Musk said that S&P had “lost their integrity” and that “ESG is the Devil incarnate”.
Tesla was reinstated to S&P in 2023. Critics argue that Candriam’s ESG strategies expose investors to risks tied to corporate scandals, while maintaining a false appearance of sustainability.
Candriam did not engage with Byline Times’ questions relating to a focus on board governance and diversity deflecting from addressing safety failings, allegations of pursuing a strategy of “shareholder engagement” over safety concerns, or its broader ESG strategy.
However, the company’s outlined ESG risk factors are cited in its Core Sustainable Strategies code as including those affecting “Operational risk – ‘stemming from inadequacy in an institution’s procedures, staff, internal systems or due to external events”.
It also noted, “reputational risk – risk of loss in enterprise value stemming from the materialisation of a risk affecting the perception of the company held by its clients, shareholders, counterparties, regulators or investors”.
A Pattern of Greenwashing?
Candriam, which markets itself as being driven by “conviction and responsibility in asset management,” is now facing growing accusations of misleading investors.
The whistleblower suggested that many other asset managers might be guilty of similar practices, using “corporate engagement” as an excuse to retain unsustainable investments in so-called sustainable portfolios.
A Kingspan spokesperson emphasised to this paper the company’s sustainability efforts, stating: “Kingspan’s long-standing sustainability commitments continue to deliver significant progress, including a 65% reduction in scope 1 and 2 GHG emissions since 2020.”
This article was updated to on 28/09/24 to clarify the out of court settlement with the Government
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