As people become more aware of the problems we face as a society, such as climate change, impact investing has become more and more popular across the globe. This refers to investments made into companies that have the intention of contributing to social good – whether that’s reducing carbon emissions or building houses for those in need.
Someone who is well aware of this is Rebeca Minguela, founder and CEO of Clarity AI, an end to end technology solution that optimises the societal impact of investment portfolios. Here Rebeca outlines the company’s purpose and how it plans to achieve it.
Rebeca Minguela, founder and CEO of Clarity AI
2020 has been the most volatile and unpredictable year in recent history. The global pandemic has overshadowed everything. Its impact on countries, markets, companies and people will be felt for many years to come. But beyond Covid-19, we have seen powerful protest movements rise up for racial justice. We have also seen the US elect a president who envisages a very different role for his country in the fight against climate change. These are seismic events that fundamentally change our approach to life and the way we do business.
But how can we best interpret and act on these changes? How are companies adapting to the “new normal”? Will Covid-19 and the Black Lives Matter movement actually change investment strategies in the long term? Indeed, do the growing number of investors actively seeking to increase their stakes in socially and environmentally conscious businesses have the tools they need to confidently do so?
These are the questions and challenges that inspire us at Clarity AI. I believe it’s never been more important for investors to gain accurate insights on the true impact of the companies in which they place their trust and their money. Expectations have changed and there are now significant reputational and commercial consequences for any investor who chooses to neglect what we call “impact”: the measurement of a company’s environmental and social role beyond just those metrics traditionally considered under ESG (which is based around the concept of avoiding risk). We believe it’s crucial that investors consider both ESG risk and impact when making decisions, which is why we built a platform that delivers more comprehensive and sophisticated analysis.
Historically, investors seeking to evaluate a company’s societal impact were faced with fragmented and unreliable data, inconsistent and subjective definitions, and a lack of tools and resources to measure at scale. It was too hard and resource-intensive to get accurate, transparent and comparable insights across companies and sectors, so many simply gave up or settled for less. That’s what Clarity AI was built to change. We use the power of technology and AI to create the world’s most reliable platform on social and environmental impact.
This is an area I’ve focused on for well over a decade, since discovering the world of impact investment at Harvard Business School. I recognized that this idea had the power to change the world. The theory is simple: focus the world’s most powerful investors towards the companies that make the most positive difference. The challenge has always been how you provide data-driven investors with the actionable insights to bring it to life.
As an entrepreneur, I am naturally an optimist! I believe that companies should focus on tackling big, difficult challenges. That’s the approach we take at Clarity AI and we have grown an incredible amount in a short space of time. In the last six months, we’ve seen a significant increase in demand – including signing clients with eight times the assets under management as in the preceding period. Today our network of clients represents USD trillion of assets under management.
We are scaling up our business and expanding our network to maximise growing demand. Last month, we raised US$15 million in our latest funding round – led by Deutsche Börse and co-investor Mundi Ventures – to bring our total funding up to US$30 million. We are signing new strategic partnerships with the biggest players in the investment and financial services sector to further expand our reach and influence. And we are working alongside global organizations like the World Economic Forum which seek to make sense of how we measure profit and purpose.
Ultimately our purpose is simple: to bring impact to markets and contribute to a more socially efficient allocation of capital. That’s why I’m extremely proud that our platform is enabling more investors than ever before to identify and support the companies helping to solve society’s biggest challenges. This is our way of changing the world.