SUSTAINABLE INVESTMENT

Responsible investments have always played a central role at Tundra Fonder. The term ESG (Environment, Social aspects and Corporate Governance) is generally used when we summarise our efforts within sustainability. All three pillars E, S and G are equally important in our work; we incorporate aspects of environment, social issues and corporate behaviour in our investment process.

  • An environmental policy is not only important to ensure a long term sustainable development, but also reduces the risk of future clean-up costs and production stoppages. It is essential that companies have a clear strategy for environmental issues in their respective sector and country.
  • Social issues are considered a core feature in Tundra’s ESG work. Corporate attitudes and beliefs on how to handle employees and relationships with other stakeholders have a significant impact on the business, both short- and long term. Disrespecting human rights is not only in breach of international conventions, but also creates operational and reputational risks for the company. A wage that violates local laws, for example, means a risk that we as investors could underestimate the long term cost levels of a company.
  •  Assessments of a company’s corporate governance and business ethics is central to our investment analysis. Internal regulations and policy instruments for combating corruption are important for many reasons. Improperly completed procurement processes involve a risk of revision and revenue loss at a later stage. There is a risk, therefore, that investors are not fully aware of the competitiveness of the underlying business. Internal corruption drains the company’s operations of resources that could be used for investment or distribution to shareholders. Companies with a good corporate governance also tend to pay more attention to both environmental and social issues.

TUNDRA SUSTAINABLE FRONTIER FUND

In August 2015, Tundra launched the first global frontier fund with a sustainability approach. Among the seed investors are three Swedish public institutions. This is the first global fund to combine investments in frontier markets with a sustainability approach. Like all of Tundra’s funds, the fund does not invest in companies that violate international conventions on human rights, environment, labour rights or corruption (UN Global Compact) and do not initiate an action plan within twelve months after these breaches have been communicated by Tundra.

The fund invests globally in frontier markets but excludes companies

  • active within the alcohol, commercial gambling, pornography, tobacco, GMO and weapons industries
  • involved in extraction or production where fossil fuels constitute the main part.

We believe that investments can bring a positive change to sustainable issues through dialogue and setting requirements for the companies being invested in. Tundra engages in active dialogue with companies the Tundra Sustainable Frontier Fund is invested in. Please contact us if you would like to know more about the fund.

Tundra’s sustainable research

Tundra is one of few asset managers worldwide to have a dedicated team engaged in ESG-research and dialogue with frontier market companies. The team consists of a Head of ESG and ESG-researcher based in Stockholm, a senior ESG-analyst based at Tundra’s research office in Karachi, and an ESG-analyst based at Tundra’s office in Ho Chi Minh City. The ESG-research team works closely with the Chief Investment Officer. With two offices in Asia, Karachi and Ho Chi Minh City, we have a unique opportunity to follow corporate behaviour locally.

In addition to our internal research capability, we work with Sustainalytics, as an external advisor and research partner for screening ESG related issues.

Tundra has signed the global UN-supported initiative Principles for Responsible Investments (PRI).

Tundra is also supporting the Carbon Disclosure Project (CDP), an international collaboration aiming at increasing companies’ awareness on climate change through a more transparent reporting on emissions of greenhouse gases.

Tundra has also been a member of SWESIF since 2011.