London-based fintech company Util announced today the release of an AI-based analytics solution designed to measure companies’ impact on the 17 United Nations Sustainable Development Goals (SDGs).
According to Util, the new solution aims to fill a gap in the market for data that can keep investors informed of the true impact of their investments, as demand for sustainable funds grows, while the effectiveness of ESG-themed products remains inconsistent. The company noted, for example, that only 6.7% of European funds labelled as ‘sustainable’ explicitly screen out or reduce exposure to fossil fuels.
Util CEO Patrick Wood Uribe said:
“The disparity between growing demand and inadequate supply is a recipe for greenwashing at best, a bubble at worst. It has led to investments being mis-sold as sustainable, when in reality, they’re inconsistent with investors’ values.”
Util’s new solution uses natural language processing to measure many of the different ways in which companies affect the 17 United Nations Sustainable Development Goals (SDGs). The platform covers 50,000 listed companies spanning a broad range of company sizes, geographies and industries. The company stated that in order to ensure objectivity, conclusions are drawn not from analysts, but from 120 million peer-reviewed academic journals.
Wood Uribe added:
“There’s a growing backlash to ESG ratings on the basis of quality and availability. Traditional data tends to rely on subjective assessments and so can be a poor basis for investment decisions. Understanding the real-world impacts of multiple businesses is a difficult and time-consuming process for investors seeking to react to a changing market quickly.
“Util is a qualitatively different offer, designed to capture complexity at scale. We’re on a mission to increase information transparency across the industry, and look forward to helping investors make investment decisions that truly align with their values.”