One of the issues investors often complain about when they want to embrace sustainability is a paucity of hard data on portfolio stocks and, even, whole market sectors. Now, a Perth-based start-up appears to have stolen a march on the rest of the world.
Some big pension funds in Australia and Europe have already become clients of Sustainable Platform, an information and research company founded by Mark Andrich, a former oil and gas engineer and hedge fund manager, with a PhD in water engineering, and his wife Anna, who has an MBA from the University of Western Australia, a financial accounting degree from New York University. She speaks five languages.
In fact, if you reach out to the Perth office, there’s a good chance whoever answers the phone will have a PhD, masters’ degree or similar qualification. “We are mostly engineers and quants,” Mark Andrich says.
After spending several years working for a global macro long/short manager in New York in the 2000s, Andrich decided he wanted to get more involved in renewable energies and water. He ended up back in Perth. “I wanted to invest sustainably myself,” he says. “There’s a lot of green washing that goes on out there. So, I set about researching companies and hired some consultants to get better data. Companies don’t report [sustainability]very well. For example, through our approach we saw that VW was high risk, before the emissions scandal.”
He says that by late 2017 he had “the world’s largest online database of companies analysed for sustainability” where the United Nations Sustainable Development Solutions Network, based in New York, which supports the international governmental effort for Sustainable Development Goals (SDG), saw it and called it out publicly as a “great resource”.
Once the firm started to analyse portfolios it attracted the interest of pension funds, one of the first being WA Super, which wanted to benchmark portfolios on sustainability scores to select fund managers for its Sustainable Future investment option.
“Interest in our approach and data gained rapidly leading to clients such as Nanuk, the Sydney-based global equities manager, and other industry funds, such as NGS Super, becoming clients… We redefined what sustainability risk meant for super funds, which has received support from regulators.”
Norwegian fund KLP, with about euro 80 billion under management, became a client to benchmark its numerous investment options for SDG contribution and risk.
Andrich says: “Initial growth was by word of mouth, however, momentum grew once funds began searching for better quality SDG data and a benchmark for that data. Our plan is to expand further into the European market with Asia following that.
“We are seeing the market demand more authentic ESG outcomes as well as quantitative, return-impacting metrics that help them better understand their sustainability contribution.”
The firm is a data and information business, which does not provide financial advice, he adds. “We provide institutions with data, SDG contributions, and risk metrics that matter most from a customer’s perspective. We intend to remain an independent information provider.”