Investing for the future
Tundra’s philosophy
For Tundra, a sustainable company is a competitive organisation with responsible and honest owners and strong management. Our ambition is to invest in companies whose operations have a long-term positive impact on the society in which the business is conducted. Companies whose products or services are relevant to future generations, and which are produced in a way that is sustainable regarding the environment and workers’ rights.
Our vision
Our vision is to create financial returns and planetary relief through long-term sustainable investments. We are convinced that investing in sustainable business models by operating within the planetary boundaries, is a prerequisite for generating financial value for our customers. We call it investing for the future. To work towards our vision, we consider the 17 Sustainable Development Goals (SDGs) within the framework of Agenda 2030 as one of our guiding tools. A long-term sustainable investment strategy must be based on a global holistic approach, and not just on selected geographical regions.
Tundra Sustainable Frontier Fund invests in emerging and frontier markets, with a focus on low-income and lower-middle income countries. A significant part of the population in these countries lack fundamental rights such as accessible and qualitative health care, adequate supply of food, decent working conditions and the opportunity to get an education. The lack of basic economic security that characterise these countries provides an opportunity for local companies to play a greater role in the improvement of society.
Engagement
We engage with our portfolio companies through close communication regarding different aspects relating to the environment, social responsibility and corporate governance. Collaborations are important to us in order to get maximum output from the dialogues. In addition to signing initiatives that are relevant to us as an organisation, we also collaborate with academia (researchers and universities), NGOs in all countries described as Tundra’s core markets, Stock Exchanges (e.g. Ho Chi Minh Stock Exchange, Pakistan Stock Exchange, Colombo Stock Exchange), journalists and government representatives.
As an active owner, Tundra Fonder strives to achieve impact on gender equality in its portfolio companies. By considering the full contribution to human capital the company can find opportunities to attract the best possible workforce in the long term to drive the business forward. Our portfolio companies must have decent employment conditions, good working environment safety, training opportunities, and there should be policies in place to counteract discrimination. We consider these areas important drivers of long-term sustainability.
We work in depth to develop measurable sustainability goals with a primary focus on material risks for the portfolio company, its sector and geography. A particularly important area in the coming years is to support companies to expand their sustainability reporting given the higher requirements as introduced by the European Union. To achieve this, we are using an external data collection platform, Worldfavor – a web-based system where portfolio companies can see what data are requested and gradually expand their reporting over time. The fund company will continuously follow up the portfolio companies’ reporting and support them in their reporting process.
In addition to our internal research capability, we work with Sustainalytics/Morningstar, as an external advisor and research partner for screening ESG related issues.
Screening
Positive screening means we actively look for companies that contribute positively to society and the environment, and that demonstrate strong performance in environmental, social, and business ethics. Using our internal Tundra ESG Spectrum rating system, we analyse each company, its owners, and its management. We take a holistic view, allowing certain weaknesses if they are balanced by strengths and if the company is committed to addressing them. Negative screening means we avoid investing in companies that violate international conventions on human rights, the environment, labour rights, or anti-corruption. If such a violation is identified, the company must commit to and start an action plan within twelve months - otherwise, we will not invest.
Positive screening
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Quantitative screening (AML, KYC, Negative publicity) of owners and senior executives
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Analysis of company history and handling of minority owners
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Compliance with local legislation
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The company’s competitiveness in relation to sector and region
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The long-term social benefit of the products or services
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Management of environmental risks associated with the business
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The companies’ pursuit of improvement in terms of environmental impact and the development of environmentally friendly technology.
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The company’s positive impact on the society in which they operate
Negative screening
The Fund follows internationally recognised standards, including the UN Global Compact’s Ten Principles, the OECD Guidelines for Multinational Enterprises, and the Principles for Responsible Investment (PRI).
We exclude companies where more than 5% of revenue (in some cases 0%) comes from the following activities:
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Cluster bombs, anti-personnel mines, chemical/biological weapons, nuclear weapons – 0%
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Other weapons or munitions – 5%
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Alcohol – 5%
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Tobacco – 0% production / 5% distribution
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Commercial gambling operations – 5%
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Pornography – 0% production / 5% distribution
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Fossil fuels (oil, gas, coal) – 5% extraction
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Uranium – 5% extraction
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Genetically modified organisms (GMO) – 5%
