SpaceX's planned $75bn initial public offering has sparked division among European asset managers over whether the company meets the continent's strict sustainable finance rules. The offering would give Elon Musk's space and satellite venture an implied market capitalization of $1.78tn, making it the largest public float in history. However, funds overseeing more than €6.5tn in assets may be barred from participating due to governance concerns under the EU's 2021 Sustainable Finance Disclosure Regulation.

European investment committees face a dilemma: how to justify owning a company with dual-class shares, concentrated insider control, and limited board independence. Musk will retain roughly 82% voting power through his special share class, raising red flags about shareholder rights and oversight. One executive called it hard to argue SpaceX has good governance, while another noted most ESG frameworks would disqualify the company on routine criteria.

Some managers point to ESG fatigue across Europe, citing Tesla's broad ownership despite governance issues. Unlike Tesla's single-shareholder structure where Musk holds 11%, SpaceX's governance structure presents clearer obstacles. Fund managers acknowledge they could theoretically include SpaceX with alternative methodologies, but the documentation burden would be substantial.

The split reflects broader tensions in Europe's sustainable investing framework, which has faced criticism for limiting access to defense and nuclear energy companies. With €6.8tn already in light and dark green funds, managers will likely find creative ways to access SpaceX given its size and market appeal, even if compliance becomes more complex.