A long-time Kingspan shareholder has reduced its stake on concerns about the manufacturer'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, according to Bloomberg.
The UK-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, data compiled by Bloomberg show.
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 that its product was used on the tower until after the fire, chief executive Gene Murtagh said in an email to staff.
The Grenfell inquiry has "raised serious concerns about the culture and controls within the insulation business at Kingspan," Liontrust said in a statement.
The rating downgrade "means we view a company as higher risk and its weighting in our portfolios should be smaller," it added.
A spokesperson for Kingspan declined to comment on Liontrust's statement, Bloomberg said.
Co Cavan-based 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 European Union'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."
But the asset manager said it will reserve judgment until the inquiry concludes, and will 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, Gene Murtagh also said in his email to staff.
Shares in the company were lower in Dublin trade today.