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Startup will focus on sustainable pension funds – "we want to squeeze every last drop out of the lemon"

Alongside Skandia, nascent fintech startup Matter Pension provides sustainable pension funds to eco-friendly savers and companies. The founders describe their customers as "modern idealists" and want to show customers how much CO2 they can save by investing in sustainable pension funds.

Niels Fibæk-Jensen (left), manager and founder of Matter Pension. Former staffer at Permanent Mission of Denmark to the UN in New York. Emil Stigsgaard Fuglsang (right), co-founder of Matter Pension, former management consultant at Red Associates and Qvartz. | Photo: PR

Many consumers realize that they can change the world to the better through investments, and entrepreneurs Niels Fibæk-Jensen and Emil Stigsgaard Fuglang want to help them do that.

In 2017, they founded fintech Matter Pension which offers a sustainable pension fund, and last summer, they made a partnership with Skandia Pension, which has since been acquired by Danish provider AP Pension.

"People have realized that they can make many decisions with their money. You can make decisions such as buying second-hand clothes and ecological articles, and you can decide to make sustainable investments through your pension savings," Stigsgaard Fuglsang tells AMWatch's sister site, FinansWatch, during an interview with the two founders.

Matter Pension is thus part of a trend placing sustainability on top of the agenda. This means that, in recent years, sustainability has become an important factor in the investment environment, and asset managers are fighting to woo customers by offering sustainable products.

"The problem with the pension saving is that it is "out of sight, out of mind". We want to find a way to make people actively take an approach on their pension saving and make it tangible," says Fibæk-Jensen. Fibæk Jensen made it to Forbes' 30 under 30 Europe list of persons who have made the biggest impression in 2018.

Squeezes the last drop out of the lemon

Today, Matter constructs sustainable pension funds to about 50-100 customers, primarily young people. The founders describe the customers as "modern idealists" that care about ecology.

Matter also has customers that take a professional approach to sustainability, such as engineers and climate researchers, say the founders, who now also offer pension products to companies.

Fibæk-Jensen and Stigsgaard Fuglsang came up with the idea for Matter, as they realized there was a demand for more sustainable pension alternatives to savers who want to make sustainable investments but don't know how to do it.

FinansWatch previously reported that several large pension funds do not offer sustainable investments to its climate-friendly customers.

"Many pension funds say they have an eco-friendly profile, however, at the same time they still invest in coal and oil," says Fibæk-Jensen.

According to Matter, the company and Skandia do not invest in either of those funds.

"We want to define sustainability. This is why we say: No fossil fuels and no weapons. We opt out a fund if just one company owns and extracts fossil fuels, including coal and gas," says Fibæk-Jensen and continues:

"We want to squeeze every last drop out of the lemon and still make a portfolio that yields a return," says Fibæk-Nielsen.

Matter Pension's fund, which manages the pension savers' investments, was launched in December 2018, and therefore it does not make sense to compare the return with those of other funds. Basically, Fibæk-Jensen is of the opinion that last years' research shows that making sustainable investments has resulted in positive returns, and if the trend continues, it does not make sense to invest in oil and gas, he says.

Many things to consider

Matter has developed its own software that opts out unwanted investments by using algorithms. Alongside Skandia, Matter has a "sustainable portfolio" consisting of exchange-traded funds, which are passive investment funds.

Currently, the fintech firm ranks companies based on roughly 35 different sustainability criteria, both positive as well as negative. They want to invest in companies that boost sustainability, whereas companies that violate human rights, invest in fossil fuels and/or tobacco, will be excluded.

However, there are many things to consider, and it is a challenge to relate to them all, the founders say.

For instance, some funds advocate equal rights. Then the same fund includes nuclear weapon, says Fibæk-Jensen. Matter excludes such a fund.

Tax havens are not yet included in our screening process, says the CEO.

"We really want to be able to select companies based on criteria such as tax havens, bonuses to CEOs etc. That will be our next step."

"If more companies display a sustainable behavior, then we can add new criteria and make a more thorough selection. Hopefully, there will be more companies we can invest in in the future," says Stigsgaard Fuglsang.

At the beginning of 2019, Matter develops an app that provides customers with an overview of their pension savings and how much CO2 their investments have saved compared a conventional pension fund.

English Edit: Lisa Castey Hall Nielsen

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