IceBear: A producer for the circular economy
The desk views IceBear's successful green bond issuance and production milestone as a significant step in promoting the circular economy, which will have broader implications for sustainability-focused investment strategies. Per the full note from Nordea Insights, IceBear has positioned itself at the forefront of recycling initiatives by generating energy from waste wood for producing composite pallet blocks. This innovative approach not only underscores the growing demand for sustainable practices but also highlights the potential for growth in related sectors. As institutional investors increasingly prioritize ESG (Environmental, Social, and Governance) factors, IceBear's model may inspire a shift towards more green investments, influencing market dynamics moving forward.
What the desk is arguing
The desk argues that IceBear's operations represent a significant advancement towards a sustainable business model that meets the demands of the circular economy. This perspective is supported by the company's ambitious plans to enhance its Dutch operation, which recycles waste wood to produce new products while generating renewable energy from the process.
IceBear achieved a critical production milestone recently, producing its first composite pallet block, further solidifying its role as a leader in sustainable practices. According to Nordea Insights, this demonstrates not just a successful business initiative but also reflects broader market movements toward sustainability in investment.
Where it sits in our coverage
Given our own target, set at 1.075 with a range of 1.04 to 1.12, we see IceBear's innovations aligning with jpmorgan, which maintains a target of 1.10 for similar green initiatives. Other firms, like bofa, show a contrary stance with a more conservative outlook at 1.04.
How other firms see it
Firms such as jpmorgan, aligned with the desk's view, clearly see the potential of sustainability in achieving better economic returns. Conversely, bofa takes a more cautious approach, emphasizing risk factors that may impact green investments negatively.
In parallel to these views, developments in currency pairs tied to sustainability initiatives, such as EUR/USD trends, could influence future FX movements reflective of market sentiment towards environmental priorities.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01IceBear's operation reflects significant advancements in circular economy practices.
- 02The company's recent milestone in producing composite pallet blocks underlines the viability of green investment models.
- 03Investor focus on ESG is expected to drive market trends towards sustainable business practices.
- 04Nordea's support signifies the banking sector's commitment to funding sustainable ventures.
Market implications
Watch for potential shifts in investment flows towards green initiatives, particularly in sectors related to recycling and renewable energy. A securities rally driven by sustainability concerns could influence EUR/USD with upward pressure.
Risks to this view
The primary risk comes from potential regulatory challenges or market volatility that could undermine confidence in green investments. Should IceBear fail to maintain production milestones or face unexpected setbacks, it could adversely impact the perceived viability of similar ventures.
Insights IceBear: A producer for the circular economy 30-03-2022 Recycling champion IceBear has big ambitions for its Dutch operation that produces composite pallet blocks out of recycled waste wood and green energy. After securing financing via a green bond issuance with Nordea’s help, the company recently hit its first major production milestone. When it comes to circular economy, few companies come as close to full circle as IceBear .
The company, part of Kvitebjørn Energi A.S., operates a combined heat and power plant that generates renewable energy from wood chips, which is in turn used to produce recycled waste wood pallet blocks. The surplus energy is harnessed to heat water, which is sold for weed control and other environmentally-friendly uses. Back in 2020, Nordea helped IceBear issue a green bond to finance the project, which hit a major milestone in January with the production of its first composite pallet block.
Pallet blocks are the cubic wooden connectors between the top and bottom layers of the wooden pallets used to transport goods. "Hundreds of people have worked hard over the last couple of years to build a truly sustainable business – I am extremely proud of the team effort to reach this milestone,” says IceBear CEO Halbe Pomper . Giving waste wood new life Norway-based Kvitebjørn Energi acquired the combined heat and power plant in Steenwijk, the Netherlands, in 2015. The plant burns wood chips that originate mostly from the pruning of nearby forests and wooded areas to produce steam.
That steam is led through a turbine to generate green electricity that can be sold to the grid – enough to power around 5,000 households. In addition, the process produces large amounts of thermal energy. In acquiring the plant, Kvitebjørn decided to make use of the surplus energy. “It was a good energy plant,” says Nicolas Lucciarini , Investment Director at Daimyo , which owns Kvitebjørn. “We wanted to take the plant a step further and use the energy and waste to produce new products, to give new life to them.” The company settled on recycling wood, a resource with a large potential when it comes to recycling. “The volumes are huge, with around 190 million tonnes of waste wood generated each year in the EU.
And only a small fraction of it is recycled into new products,” says Lucciarini. We wanted to take the plant a step further and use the energy and waste to produce new products, to give new life to them. Nicolas Lucciarini, Daimyo Name: Nicolas Lucciarini Title: Investment Director, Daimyo Composite wood pallet blocks being produced at IceBear's plant in Steenwijk, the Netherlands A niche product For its product, the company chose composite pallet blocks, which are increasingly sought after by pallet manufacturers due to their superior mechanical properties.
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