“Working with Matter and using their screening tool has enabled us to skip a whole big process of market research. We avoided having to start from scratch with understanding both what types of products there is a demand for in the market and what criteria within.”
Head of Responsible Investments at AP Pension.
Using Matter Portfolio Insights, Nordea was able to create their own sustainability footprint overview, which is used in advisory meetings to help their customers understand how their investments perform with respect to carbon emissions, fossil fuel reserves, water use and waste generation.
With the new strategic focus, AP Pension had an ambition not only to do better than before, but set entirely new sustainability standards within the financial sector in Denmark. Because of that AP Pension set out to create a sustainable investment universe that lived up to very high standards of sustainability – but the existing data and ESG rating providers’ solutions weren’t bringing sufficient insights to ensure that:
“What we really like about Matter's screening tool is that it gives us flags, not ratings. There are lots of different ESG ratings out there and we subscribe to some of them, but the problem is that most ESG ratings are focused on financial materiality and they don't give you a clear insight into the sustainability profile of a company”
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As a part of their strategic shift, AP Pension launched a new sustainable pension plan in 2019 called AP Sustainable. Using Matter’s screening analysis, AP Pension made it possible to avoid investments in controversial and harmful industries such as fossil fuel, weapons and human rights violators and find more sustainable and green alternatives such as renewable energy, health and certified foresting.
- For our sustainable product, we wanted to go beyond the financial materiality aspect and try to look at whether the company was behaving in a sustainable way. This is where Matters screening tool was useful. It provides a range of positive and negative flags for a wide variety of parameters, which allowed us to dig into those flags to determine whether the company could be considered sustainable, or whether there were issues that would exclude them from our investable universe, says Sandra Metoyer.
AP Sustainable has been live for a little over a year and the portfolio has proven its legitimacy by beating all other pension products in the Danish market on return on investments in 2020. Killing the myth that sustainable investments perform badly has only given AP Pension more motivation to go further with their sustainability efforts
Launching a dedicated sustainable product was a way for us to set the bar of where we wanted to be as a company in terms of the sustainability agenda. We expect that in time the rest of the business will follow and in the future we have lifted the standards of the sustainability profile of all investment products in AP Pension.
To continue their work with making all their investment products more sustainable, AP Pension combines qualitative research with quarterly screenings from Matter of the investment universe to stay updated on any developments in companies’ behaviour and profiles.
Working with Matter, AP Pension did not only manage to launch the first sustainable pension product in the market, they made a transition from seeing ESG as a hygiene factor to making it one of the most important strategic priorities of their businesses. They will continue to use Matter to stay informed on sustainability performance and find new ways to invest more sustainably.
Sustainable investing is about more than just equity analyses, and Matter is proud to also partner with AP Pension on understanding and communicating the impact of alternative investments and green bonds to AP Pension's customers.
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