We get asked all the time about how our customer’s pensions will be invested sustainably when they sign up with Matter. In this blogpost, we elaborate on how your pension is invested sustainably with Matter and Skandia.
Sustainable investing is a popular topic amongst both investors and individuals who are interested in making their money contribute towards a greener and better future. Whether you invest yourself in the stock market, or try to find a way to invest your pension more sustainably, like us, it can be hard to figure out when an investment is sustainable. So what do we do at Matter?
We scan the market for harmful companies
First and foremost, we have defined a number of sustainability criteria which we use as our foundation to invest from. To start with, one of our criteria is to actively exclude the most harmful companies such as those involved with oil, gas, tobacco, weapons, child labour and corruption. We furthermore try our best to find ways to include as many companies in the portfolio that contribute positively to sustainable development – that means more companies involved in renewable energy production, health solutions and new technologies.
From these criteria we have gathered data which we then use to find companies flagged for one or more of our exclusion criteria. We have developed a digital screening tool, which incorporates this data and scans portfolios for harmful companies. This automated tool saves us a lot of time and cost because it means we don’t have to find all harmful companies manually. With our tool, we can we can automatically screen a portfolio of, for example, 2500 companies and receive a report with an overview of all the companies we need to exclude, in a fast and cost-efficient way.
It’s not possible to handpick each share
Sustainability is a broad concept that is defined and approached differently from person to person. At Matter, we experience this first hand. We hear a lot of different opinions about what people want and don’t want their money to be invested in. Unfortunately, the complexity of investing means that we cannot tailor portfolios to customers exact wishes.
At Matter, your pension will be invested in Exchange Traded Funds (ETFs) (read more about ETFs here). However, it is not simple to combine sustainability and ETF investments. One ETF holds a lot of shares and bonds (often hundreds of different companies), it is very typical that one or more of the shares don’t live up to our criteria. There might be an oil company in an otherwise sustainable portfolio and in that case, we have to exclude the whole ETF as we cannot take out the oil company.
Despite this, using our screening tools we have made it possible to develop a portfolio together with Skandia that lives up to our sustainability standards, while remaining diversified enough to limit risk. We scan the market continuously and work to expand our criteria as more investment opportunities arise.
We scan the market – Skandia invest
At Matter, we are the experts in sustainability and technology. We define the sustainability criteria, gather data and screen the market for investments that live up to our standards. Our partner, Skandia, takes care of investing the money, continuously working to secure the best financial return possible.
Why do we work with Skandia? It requires a license to sell pension. The license is a permit from the Danish financial regulatory authority to handle and invest customers’ money, among other things. This is great, because it protects you as a customer, but acquiring such a license takes a lot of time. And time is something we in Matter do not have. We wanted to contribute immediately to the race against critical climate damage in the next 10 years, so we needed to get started as soon as we could.
Therefore, we found a partner in the pension industry – Skandia – who have the necessary licenses and are as eager as us to give Danes the opportunity to invest their pension sustainably.