The Aramco Research Center in Houston, Texas, U.S., February 28, 2017. REUTERS/Daniel Kramer
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Aramco is the world's largest oil company, but when it sells shares next year its foray into renewables is what may lure investors who would otherwise be forced to stay away. Saudi Arabian Oil Co., as it is formally called, is considering investments of as much as $5 billion in renewable energy, part of the kingdom's effort to reduce the amount of oil feeding domestic energy needs.Whether greening Aramco's IPO would boost the value of the offering is an open question, one clouded the debate over how much investors will pay and whether the renewable-energy program unfolds as expected.Institutional investors with $60 trillion under management have signed up to the Principles for Responsible Investment, pledging to incorporate environmental, social and governance factors, known as ESG, into their investment decisions.For Aramco, the renewables and ESG programs help expand the number of investors who could take a piece of the IPO.That discussion culminated last April with Vision 2030, a program championed by Deputy Crown Prince Mohammad bin Salman to open the kingdom to use oil wealth to build capabilities in other industries from banking to tourism and even entering solar-panel manufacturing.Last month, it invited banks including HSBC Holdings Plc, JPMorgan Chase & Co. and Credit Suisse Group AG to pitch for a role in helping Aramco identify renewable acquisition targets.
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