Nashville software startup raises seven figure pre-seed round
Summary
Externally, angel investors, private equity groups and venture capital firms use a businesss ESG score as a sort of bellwether when evaluating potential investments.24-year old Vanderbilt graduate students Adam Jace and Max Mona believe that ESG ratings and reportings should be accessible.Business ethics should neither cost a fortune nor be transactional, Mona says. The pair says they will use the fresh funds to expand their business development efforts, double the size of their three-person team and continue maturing their technology.Traditional ESG consulting consists of thousands of email messages, back-and-forth attachments, a one-off transaction structure, and of course, a hefty price tag, Mona explains.Currently, ESG consultants have a foothold in the industry. Some practices seek to adopt operations that are less harmful to the environment, such as reducing the emissions of greenhouse gasses, while others aim to further social causes like increasing diversity or improving workplace conditions.Regardless of the approach, interest and emphasis in the once niche topic has grown dramatically.In 2019, about $17.1 trillion about one-third of all assets under professional management in the United State were being managed using some type of ESG strategy, according to US SIF Foundation, a sustainable investing trade group. That was a 42-percent increase from 2017.The socially conscious investors of yesterday tended to be more focused on causes than performancei.e., they were willing to give up returns to do good things with their money, CCIM Chief Economist and ESG expert KC Conway says. These days, a lot more people are in it not just to advance causes they believe in, but in the hopes of achieving returns that are equal to or greater than those of traditional investments.A notable 42-percent of respondents in the Schroders 2020 Global Investor Study say they are attracted to sustainable funds and companies because of the likelihood they will provide higher returns.According to Mona, several venture-backed companies PulsESG, ESGgo, and Novisto plan to release ESG reporting software over the coming months.