In 2022, The Fintech Times posed the question: ‘what sets a ‘fintech for good’ company apart from the rest?’. This year, we wanted to hear directly from global fintechs that align themselves with the ‘fintech for good’ ethos. Why do these companies perceive themselves as agents of positive change in the industry?
Tess Buckley is an AI ethics senior analyst at Ethics Grade, a company aiming to make finance more ethical, transparent, and accessible. Here, Buckley outlines its mission to make emerging technologies explainable and ethical and why Ethics Grade sees itself as a ‘fintech for good’.
Tell us about your company and what it does
At EthicsGrade, our primary objective is to address the pressing need for environmental, social and governance (ESG) information in the investment industry. ESG has emerged as a crucial factor for asset managers, but existing ESG providers often overwhelm companies with numerous reporting requirements, leading to duplication and questionable relevance. This results in a lack of engagement, low-quality data, and the pervasive issue of greenwashing.
To combat these challenges, we have developed a unique platform at EthicsGrade. Our platform employs predictive modelling to determine ESG scores for companies. We initially focused on a specific aspect of ESG, namely corporate digital responsibility (CDR), using our own survey to build the world’s only dataset on digital ethics and refine our predictive engine.
In our endeavour to alleviate the reporting burden on companies and eradicate greenwashing by encouraging transparency, we have expanded our platform to benefit corporates. Companies can now simply copy and paste any ESG question from any investor into our prediction engine and receive an instant response, enabling quick and efficient communication of ESG information and ultimately supporting ESG reporting and ending greenwashing.
Why do you think your company is a ‘fintech for good’?
Our company, EthicsGrade, considers itself a ‘fintech for good’ as we are committed to alleviating the challenges of reporting about and gathering data on ESG issues.
To combat the problem of greenwashing, EthicsGrade focuses on assisting corporates in efficiently and accurately responding to the numerous ESG surveys they receive. Our goal is not to impose our own values as the standard, but rather to facilitate companies in adhering to the existing diverse range of ESG standards. We understand that reaching a consensus on a universal standard is unlikely and may not be necessary. Instead, we aim to alleviate the burden on corporates by making the disclosure process easier and more streamlined. By doing so, we promote increased engagement, higher-quality data, and more accurate ESG ratings.
At EthicsGrade, we embrace the idea that easier and more accessible disclosure enables a more informed and transparent ESG landscape, ultimately leading to positive change in the financial sector and beyond.
How do you measure your impact?
At EthicsGrade, we measure our impact based on the accuracy and efficiency of the predictions generated by our platform. We understand the overwhelming requests that companies receive from investors regarding their sustainability efforts. To address this challenge, we provide a prediction engine that offers accuracy ratings for each answer it generates.
Our goal is to save valuable time for companies by enabling them to easily respond to ESG inquiries. We measure our impact by the number of high-accuracy predictions we provide, knowing that we have assisted companies in delivering precise and reliable information to investors. Our platform allows for a streamlined process, as it requires little more than a copy and paste action to generate accurate responses.
By alleviating the burden on companies and facilitating the provision of accurate ESG information, we aim to enhance engagement and improve data availability in areas that investors consider critical. We believe that our impact is realised when companies can effectively navigate the complex landscape of ESG reporting, ultimately contributing to a more informed and transparent financial industry.
Through our measurement of high accuracy predictions and the positive outcomes they enable, we strive to make a tangible difference in the ESG space and help shape a future where companies and investors are better aligned with their values.wealth incrementally over time.
What more can be done to make finance more ethical, transparent, and accessible?
Finances can be made more ethical by enhanced disclosure standards. Companies are mandated to share data on ESG to help investors make informed and ethical decisions. These requests can often be overwhelming, for finance to be more ethical we must find a way to allow for company disclosures to be a streamlined process. That is why our solution is focused on decreasing the burden of ESG reporting requests for companies, while simultaneously providing quality data to investors.
Finances can be made more transparent through financial literacy and stakeholder engagement. Through education programs and public tools, we can raise awareness about the potential risks and benefits of financial services and ESG issues. That is why we make all our ESG grades and research public on our website, with visually accessible formats such as our scorecards. We also encourage engagement through blogs and news which cover important topics such as ‘What is ESG.’
Finances can be made more accessible by addressing bias and discrimination. The financial industry should actively work towards eliminating discrimination in lending, investment and hiring practices. This is especially important as we continue to develop technologies, once bias is engrained in machines it can be amplified at scale.