By Christoph Steitz and Daniela Pegna

FRANKFURT (Reuters) – Germany’s upcoming national election is likely to show the most fragmented outcome in decades and markets could struggle to work out the implications for stocks, with one exception: if you score low on green technology you face trouble.

According to analysts, the Greens are likely to be part of the next government after the September 26th vote. This will increase the chances of setting higher targets for wind and solar power as well as increasing the pressure on the country to reduce its emissions.

Already, investors have begun to pay attention to environmental, governance and governance (ESG), when selecting stocks.

Analysts at JP Morgan said that the upcoming German election will have “significant implications for ESG related policies, affecting corporations and investors”, naming stocks with high carbon dioxide emissions as potential exposed.

The brokerage stated that this includes Thyssenkrupp and Salzgitter steelmakers in Germany, along with chemicals giant BASF, potash, and salt miner K+S.

Christian Kahler, a DZ Bank analyst, also identified polluters such as HeidelbergCement, the second-largest cement manufacturer in the world, and Lufthansa as being threatened if emission targets are increased.

Concerns are raised about the impact of a tighter emission policy on Germany’s primary car sector. This includes Daimler (OTC), BMW (DE:) and Volkswagen.

Matt Weller (global head of research, FOREX.com/City Index) said that traders may be particularly concerned about Volkswagen’s prospects, given its poor environmental record, dating back to 2015’s emissions scandal.

German investors, including Nordex wind turbine developer Encavis and Nordex wind turbine maker Nordex, are seeing a completely different message, given Germany’s switch from fossil fuels to renewable sources.

This also holds true for RWE – one of Europe’s largest renewables players – and energy networks operator E.ON, Credit Suisse (SIX:) analyst Wanda Serwinowska said.

She described the election as a “major catalyst for Germany’s utilities” and said that E.ON could be outperformed by RWE for the remainder of the year. E.ON shares have risen 5% year-to date, while RWE has fallen 8%.

If the government is more left-leaning, then residential stocks could be under threat.

It should be obvious within an hour of poll closing Sept. 26, how each party did, but it may take several months to determine who will become the next chancellor and what the makeup of the government will look like. Polls indicate that no single party is close to the majority.

Bernstein analysts warned that there was a chance rent controls could be increased if Social Democrats entered a coalition with Greens and Left Party.

Germany is a hotly contested country where rents have been high in recent years. Fears of rising housing prices played an important role in Vonovia’s (OTC) May announcement that they would merge.

They stated that even such an alliance of leftists would not be able to go so far as to introduce a Berlin-style rent freeze in major cities at the national level.