We recently had the opportunity to speak with Charmaine Lee, sustainability lead at NRP Zero. As an Article 9 fund manager, NRP Zero invests in mid-late industrial cleantech ventures across the Nordics with focus on the energy and maritime sectors. In this interview, Charmaine shares her insights on driving sustainability within the fund and discusses the challenges of managing EU Taxonomy and Principal Adverse Impact (PAI) reporting in the portfolio.

Transitioning from advisory to investment management

Charmaine’s entry into the sustainable finance space started at Macfarlanes LLP, a London-based law firm, where she worked with regulations including the EU Sustainable Finance Disclosure Regulation (SFDR) and Taxonomy when they first came into force. She helped large European and British asset managers integrate SFDR requirements into their fund management and investment processes from a regulatory and commercial perspective. At NRP Zero, Charmaine has a hands-on approach with the fund’s Article 9 mandate, whilst playing a key role in deal flow, due diligence and portfolio value creation processes.

"Working directly with ESG integration, due diligence, and portfolio management brings new and varied challenges," she notes.

As NRP Zero invests in companies in an earlier capital phase who are often constrained in resources and time, it was important to find a partner to help streamline portfolio reporting and ensure fund compliance. “We needed to ensure compliance without placing too much burden on our portfolio companies,” Charmaine says.  

Adopting software for efficient reporting

NRP Zero partnered up with Celsia to manage portfolio data collection in relation to EU Taxonomy and PAI reporting. Cost-effectiveness and user-friendliness were key drivers in this decision. Charmaine shares, "Celsia offers a great tool for aggregating data from companies and displaying the Taxonomy eligibility and alignment of our portfolio. For us, it was a no-brainer to optimize the process through Celsia’s tool."

Overcoming challenges in reporting

A key challenge NRP Zero sees in the implementation of the EU Taxonomy and PAI reporting is the timeline it takes to reach Taxonomy alignment given the current regulatory framework, which applies uniformly to companies of varying size, scale and maturity. This means it is often more challenging and time-consuming for smaller to medium sized companies to be Taxonomy-eligible in the short run. “It’s unrealistic to expect all companies to align at the same pace. We need to support them through their growth while emphasizing the importance of creating value through strong ESG positions,” she explains.

The role of an Article 9 fund

As an Article 9 fund, NRP Zero places sustainability at the core of its mission, with every investment aimed at enabling the energy transition. Charmaine remains focused on monitoring trends and challenges in the Article 9 space. “Many fund managers worry about delivering on the expectations of being an Article 9 fund. For us, it’s about aligning with our core strategy of deploying capital to enable the energy transition, which made for a natural fit,” she says.  

Moving beyond buzzwords

NRP Zero is determined to move beyond sustainability as just a buzzword, recognizing the risk that the ESG landscape can become more about goodwill and marketing than meaningful action. By embedding ESG into the portfolio and investment life cycle, NRP Zero builds better run, financially viable companies in the long run.  

The journey from understanding sustainability regulations to effectively executing them highlights the need for pragmatism, the right tools, and continuous education. NRP Zero's approach serves as a blueprint for other funds striving to balance compliance with genuine value creation in sustainable investing.

Celsia is proud to be NRP Zero’s partner in their EU Taxonomy and PAI reporting!