Investing in a Sustainable Future, with Emil Stigsgaard Fuglsang

“If you can start aligning interests as the world is organizing itself towards a more sustainable goal, there will be a plethora of interesting new business models that open up in front of us.” – Emil Stigsgaard Fuglsang, Co-Founder of Matter

In our latest episode, we are joined by Emil Fuglsang, Co-Founder of Matter, a Copenhagen-based FinTech startup that is building crowdsource-inspired tools to literally invest in a better, sustainable future. In conversation with Vivaldi Founder and CEO Erich Joachimsthaler, Emil stresses society’s dire need of a sustainable future without fossil fuels, weapons or tobacco, and emphasizes the importance of investing in a world you wish to retire in. Further, Matter has built an AI-powered screening tool that looks at a range of sustainability criteria across various reliable data sources. Tune in to learn about how Matter utilizes real-time data to promise transparency and the startup’s unique value proposition that allows clients to witness the tangible impact of their retirement savings.

See below for highlights from their conversation: 

Q: Please introduce us to Matter.

A: Matter is a FinTech company based out of Copenhagen, and we do two things:

1. We work in collaboration with big financial institutions, typically pension funds, to offer sustainable pension savings to individuals. We do that by helping them create sustainable investment funds and by offering a digital engaging experience that’s catered to delivering promises and customer experiences around sustainability. So we are a B2C-based business model.
2. We are also suppliers of software to the financial services industry. We do that by helping screen portfolios on a range of sustainability criteria and report on a range of impact metrics, from the carbon intensity of your investments to the share of your portfolio that could be invested in harmful or beneficial companies.

Both of these business models run on the same core engine that is based on a lot of analysis, powered by quite a few AI features that help us navigate the complex landscape of data on sustainability.

We specialize in sourcing data from a range of NGOs, research agencies and academics around the world that publish data on, for example, companies that act in problematic way in terms of deforestation or companies that are weapons producers, etc. So where we really differ is that we’ve found a way to collect all this data and synthesize it into a framework for sustainable investments that we can use to screen investment portfolios.

Q: As 1 of 500 FinTech startups, how have you been able to cut through and tell your story?

A: I think I would point to two things. The first relates to our approach to developing a compelling customer experience. So we’ve worked a lot with gaining insights into how people relate to finance, how people think about planning for the future, think about sustainability, and we’ve tried to build a custom experience around that. And that’s new. The financial industry, even though it is very tech driven right now, doesn’t innovate that fast when it comes to new value propositions. For once, we can promise you something normative about your money. We can actually give you a concrete promise, which is the experience of not being required to be financially literate or be a high net worth individual, but just making one decision and suddenly having this empowerment that is normally reserved for rich individuals and seeing yourself as a stockholder, an investor, someone who’s impacting the world with your money. Delivering on that also requires an underlying ICE platform that can provide complete transparency into what’s in the portfolio, but also run an early warning system, which is: What is the world actually saying about an investment?

Secondly, I think we’ve received attention due to the logic of how we’ve built the underlying analysis and the software we are selling to financial service providers. We’ve tried to combine some competencies – I have a background in management consulting, my co-founder Niels’ experience working in the United Nations, and our other members are engineers. Bringing all our expertise together helped design a system that is dedicated to delivering analysis for companies that want to create sustainable investment profiles and deliver promises.

Q: On one hand, you are also sending pensions to Millennials. How has that experience been?

A: I think there’s been a tendency to also criticized the generation of Millennials for being irresponsible. Before we started even building the first concepts for Matter, we interviewed more than 200 people, which I think is also a bit odd for FinTech. Typically, you start off with a hypothesis, do a few interviews, and then you just get going. But before we started building the logic of delivering a promise around sustainability, we spoke to so many people. What we realized was that Millennials actually really want to feel responsible financially. They have quite a lot of strategies in place, but the financial industry isn’t set up to deliver very well on it. I think if you stop talking about the money you have in a world of climate change anxiety, but start discussing the power you have in affecting the course today, Millennials will see the huge responsibility they have. I was very surprised and touched that people actually care so much. There’s so much good and so many good intentions, so it’s just a matter of finding a way to deliver on it.

Q: Are you suggesting a mindset shift? It is not just about the platform business, the startup or FinTech, it is about a new definition for the firm, right?

A: Yes, I agree, it’s a chance to also rewire some of the structures. If you look at the role of NGOs today, they are just a watchdog. What if we could pay them for their valuable data and analyses? The question is then, who is to pay them? Typically, you would never think of a bank. Why would a bank pay World Wildlife Foundation for something? But if you can start aligning interests as the world normatively organizes itself towards a more sustainable goal, I think there are a plethora of interesting new business models that open up in front of us and ours is just one of them.

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