In the latest episode of the Connector Podcast, we discuss sustainable finance with Niels, the co-founder and CEO of Matter, a Denmark-based fintech company. This conversation offers useful insights for anyone interested in the intersection of finance and sustainability. Niels shares his journey from working at the United Nations to founding Matter, providing a thoughtful perspective on mobilizing capital for sustainable development.
One of the key topics in this episode is how Matter is approaching sustainability data analytics. Unlike traditional ESG providers, Matter looks beyond financial risks to consider the broader impact companies have on society and the environment. Niels explains how Matter combines company-reported data, external information, and sentiment analysis to provide insights tailored for institutional investors, asset managers, and pension funds.
The episode also explores Matter's distinctive approach to ESG assessments. Historically, ESG has focused on financial risk—evaluating how environmental, social, and governance issues could affect a company’s bottom line. Matter shifts this focus by also assessing the company’s broader impact on the world. This dual perspective offers a more complete understanding of both financial risk and real-world consequences.
Niels emphasizes the importance of using multiple data sources to gain a comprehensive view of a company's performance. This includes audited company data, external insights, and sentiment analysis from media coverage. By bringing together these diverse data points, Matter aims to provide a well-rounded view of sustainability performance, aligned with internationally recognized standards like the UNSDGs and the Global Compact.
The conversation also addresses challenges in the ESG data market. Niels talks about the oversaturation of data providers, making it hard for asset managers to navigate the abundance of information. He explains that the real challenge is ensuring the data’s reliability and clarity, which Matter tackles by offering transparent and traceable data to help clients form their own judgments.
Another significant theme is the evolving role of technology in sustainability assessments. Niels notes how automation and data-driven processes have transformed what was once a highly manual part of investment management. This shift has opened up new possibilities for analyzing company performance in ways that were previously unavailable.
Looking ahead, Niels shares that Matter is focusing on helping clients assess physical risks related to climate change and natural resources. They’ve already introduced tools like temperature scores and value-at-risk assessments, but physical risk will be a key area moving forward. This aligns with a growing trend of using location data and satellite imagery to make sustainability assessments more precise.
The episode wraps up with a look at the future of sustainability on a global scale. Niels acknowledges the pushback against ESG but remains hopeful that with better data and decision-making tools, the gap between ESG commitments and tangible outcomes can be narrowed, leading to more meaningful results.
In summary, this episode of the Connector Podcast highlights how Matter is setting new standards in sustainability data analytics. Niels provides valuable insights for those involved in sustainable finance, whether at an institutional or individual level. By connecting financial performance with real-world impact, Matter is helping to reshape the future of ESG and investment.
Listen to the full episode here.