An interview with Axel Elmqvist, Sustainability Lead at Verdane

As Verdane’s Sustainability Lead, Axel Elmqvist is responsible for fully integrating and strengthening sustainability as a core value creator across the Verdane universe – in the investment process, the company portfolio and in Verdane’s own organisation. In connection to this week’s Leaders For Climate Action campaign, we sat down to talk to him about how he came to be at Verdane, what a typical day on the job looks like and the role he sees private equity playing in creating sustainable growth. 

 

 

Hi Axel!

Could you tell us a little bit about yourself and how you came to work at Verdane?

I joined Verdane from Material Economics, a Stockholm-based sustainability strategy consulting firm started by several ex-McKinsey consultants, where I worked as a project manager. Before that, I worked as a senior consultant at Oliver Wyman, another strategy consultancy, and prior to that in venture capital and startups in Berlin with a focus on fintech. I hold a Master’s in Electrical and Electronic Engineering from Imperial College London. Growing up I spent 13 years in China and Singapore, after which I lived in Greece before moving to London for my university studies.

I’ve always had an interest in technology and the investment industry, and had been following Verdane for a while when the Sustainability Lead job was announced. The intersection of tech-enabled investments and sustainability was a match made in heaven, so I went for the job!

What originally got you interested in sustainability?

My university studies as an electrical engineer, where I realised that with enough clean energy there’s pretty much boundless potential to what we can achieve as a society. I wrote my master’s thesis on wind power, but then spent three years not really pursuing sustainability professionally. In the end, I decided to work with climate and energy to give myself a greater sense of purpose. I made the choice between working as an investor, at a start-up, or as a consultant and elected to go down the consultancy path – it may sound like a cliché but it’s a great “school” where you get to work in a range of exciting industries, build up a strategic toolkit and help answer difficult questions. My favourite question to grapple with is how the sustainability transition will impact global value chains like transport, energy or agriculture, extrapolating what business and investment implications that will have, and breaking those insights down into actionable steps.

Tell us about a typical day on the job.

It’s all still new and subject to change, but on a typical day I might do sustainability due diligence on upcoming investments, work on defining and structuring our in-house sustainability offering to the portfolio, or soundboard answers to strategic sustainability questions with a portfolio company CXO.

What role do you see private equity playing in creating sustainable growth?

Private equity has a big role to play! As owners with relatively long ownership cycles – and a need to think long-term, since it’s important that companies are well-positioned for future growth at exit – private equity companies have a task of future-proofing their portfolio companies in terms of sustainability. Private equity capital is patient, so as owners we are able to make important investments to create long-term competitive advantage. The growth-oriented focus of private equity ownership also means we can accelerate the development of sustainability transition-critical companies faster. That’s massive!

 

What’s the most exciting thing you’re working on right now?

A strategic project to strengthen our investment process, which will improve how we evaluate and quantify the sustainability impact of potential Verdane companies prior to investing – things like improved health outcomes for employees, reduced or avoided emissions, and the like.

Where do you see Verdane’s biggest potential for improvement in terms of sustainability impact? And what are we doing about that?

I’d say benchmarking and sharing learnings in an effective and scalable way. There’s significant sharing going on already, but fully harnessing the sustainability data in our portfolio companies to create a structured, holistic approach to scale sustainability learnings across the entire portfolio. That is something the Elevate Analytics team and I are working on.

And what would you say are Verdane’s sustainability strengths?

Sustainability is deeply ingrained in the culture of the organisation, so if a good idea and execution plan related to sustainability is presented, there’s buy-in. That’s great for moving things forward at a quick pace.

What are the most common obstacles you see companies face regarding sustainability?

Not knowing where to start, or how to define sustainability work in a way that is appropriate to the organisation or business model and relevant to one’s own stakeholders.

Where are the CEOs who are most advanced in their thinking focusing their efforts right now?

On integrating sustainability into their core value proposition – thinking long-term to make the right investments today, and partnering up with other players in their own value chain to contribute positively. Sustainability beginners mostly see it as a cost, whereas advanced players have found ways to make sustainability generate commercial opportunities for the business – like in BEWI – or create a market position that generates stickier customers, like momox.

What advice do you most often find yourself giving management teams?

Make a current situation analysis, establish where you can generate the most impact, and use that to define where you want to end up. Then make an actionable plan to get there – remember to use sustainability to generate business upside to the greatest extent possible.