Machine learning tracks companies’ performance against the UN SDGs

A data provider measures the social and environmental impact of companies and investment portfolios

Spotted: Among 77 funds with ‘green,’ ‘clean,’ ‘climate,’ or ‘sustainable’ in their name, only four scored positively on all of the United Nations Sustainable Development Goals (SDGs) with an environmental focus. This was one of the key findings of a 2021 study by sustainability data provider Util.

The company has developed machine-learning models that measure patterns at scale and without bias. These models are used to assess more than 50,000 companies against the 17 SDGs as well as more than 2,000 other sustainability themes. The assessed companies vary in size and come from different sectors and regions. And Util’s software can be used not only for assessing the companies themselves, but also the investment portfolios that provide them with capital.

Util’s analytics are targeted at investors, and the startup’s unique selling point is the trustworthiness of its data. Unlike other sustainability data platforms, Util doesn’t rely on company disclosures or opinions. Instead, the company’s assessments are based on the impact of different business activities according to the current scientific consensus. It does this by using natural language processing to scan 120 million peer-reviewed publications. What is more, every listed company in the world is assessed using the same criteria enabling reliable like-for-like comparisons.

“Global assets in sustainable investment strategies have exploded, yet the real-world impact of those investments remains contested thanks to poor-quality data,” explains Util CEO Patrick Wood Uribe. “With so much capital committed to positive social and environmental outcomes, and only eight years remaining to achieve the UN Sustainable Development Goals (SDGs), it is critical that we arm investors with more rigorous, detailed, and transparent data than corporate disclosures or analyst opinions to guide their asset allocation decisions,” he adds.

The startup recently announced the closing of a seed round led by investment firm Eldridge. The proceeds will be used to increase hiring efforts in the UK, expand the company’s presence in the US, and scale operations to meet the growing demand for coverage across new asset classes.

Other ESG investment innovations recently spotted by Springwise include an algorithm that tracks ESG incidents at public companies, new software tools that support ESG investors, and an equity crowdfunding platform for socially responsible investment.

Written By: Matthew Hempstead