Introduction
Atlant Fonder is a Swedish Asset Manager with only 10 employees, but you would not have been able to guess it just by looking at their financial products: a total of nine funds, all of them Article 8, and some with a very strong sustainability drive.
You would also not have guessed that all of their sustainability screening and reporting have been crafted in the past years by only one of Atlant Fonder's team members: Peter Beckman, Deputy Managing Director, who has been championing sustainable investment as one of his tasks since 1996.
Connect Earth interviewed the team at Atlant Fonder to dissect how this army of half a person can successfully manage sustainability reporting with the help of Connect Earth and establish a market position as a provider of sustainability-conscious products in the Nordics.
The challenge: Data limitations and sustainable finance workload
All of the nine funds managed by Atlant Fonder invest in a relatively small group of companies (between 150 and 180). The funds share the assets but offer different risk profiles. One could argue it is relatively easy to keep a tab on the sustainability KPIs of these companies over time. But there is one issue: the majority of the companies within Atlant Fonder's portfolios are small Nordic institutions that have not yet published ESG reports following the latest European standards.
Atlant Fonder's second biggest problem was that, because of SFDR requirements, the workload was becoming increasingly larger for the lean team.
"Many of my peers in the industry say that the past few years have been all about reporting. And, ironically, there was not enough time left to actually care about sustainability" – Peter Beckman, Deputy Managing Director at Atlant Fonder
At the same time, sustainable finance disclosure is "a must-have, not a nice to have", as he describes.
"Your products have to be at least Article 8 to qualify for big platforms and big fund distribution in Sweden" – Peter Beckman, Deputy Managing Director at Atlant Fonder
Beckman estimates that about 80% of the meetings with clients and distributors touch upon topics related to sustainability.
The solution: Proactive reporting that exceeds clients' expectations
In 2022, Atlant Fonder decided to partner with Connect Earth to solve both challenges: workload and data limitations.
First, Connect Earth has been enabling Atlant Fonder's team to work more effectively.
"We now have more time to actually make an impact on our holdings and to work actively with sustainability" – Peter Beckman, Deputy Managing Director at Atlant Fonder
Second, Connect Earth has been supporting Atlant Fonder in filling the data gap through data research and questionnaires sent to investee companies.
"We trust Connect Earth to continuously increase our coverage as it has happened since we started working together" – Peter Beckman, Deputy Managing Director at Atlant Fonder
In 2022, Atlant Fonder's team started to present to stakeholders fund-level Principal Adverse Impact (PAI) statements and the entity sustainability reports which include the percentage of AUM contributing to the different SDGs.
"The standardized and easily understandable sustainability reports we export from Connect Earth are highly appreciated by our clients" – Peter Beckman, Deputy Managing Director at Atlant Fonder
Moving forward: Tackling strategic decisions, such as upgrading to Article 9
With a sustainability reporting process in place, the team at Atlant Fonder is ready to discuss challenges of higher order. An example of such is the tradeoffs that must, potentially, be made in a fund's sustainability strategy in order to meet the guidelines for SFDR's Article 9.
This is a topic on Mattias Gromark's agenda. He is the Fund Manager of Green Tech Metals, one of Atlant Fonder's nine funds. It was launched in 2016, pioneering the investment thesis of enabling the green transition through the supply chain of raw materials.
"The fund strives to only invest in companies in line with both EU Taxonomy's and the UN's Global Compact criteria. In other words: the investees are responsible companies supplying materials for products such as car batteries and solar panels - certainly, investments contributing to combat climate change."