When Making an Impact Becomes Your Business : ESGgo and What it Means to Invest in Tomorrow

Leah Zuckerman VC Value CreationLeah Zuckerman

March 9, 2022 • 7 min read

Blog Series | Part 7 | Value Creation Founders Series

First things first – ESGgo is out of Stealth 

Yesterday, a new Glilot portfolio company came out of stealth mode. ESGgo, founded by Orly Glick of Vintage Partners and Ido Green, a former Meta executive, provides software solutions for swift navigation of ESG integration. Announcing $7 million in seed funding, led by Glilot Capital, the company delivers a new enterprise data platform which enables the next-generation of ESG data collection, reporting, and analysis. 

What is ESG?

Maybe you’ve heard of it, maybe you haven’t. Maybe you’ve heard it but don’t quite understand what it means. The rise of ESG refers to: Environmental, Social and Governance factors in organizations across the globe. While ESG has had a long history in companies, the majority of them appear to have focused on tech, scale and profit first, sustainability second. The standards for ESG are not new, but the way the world is looking at them is. Companies and organizations are starting to integrate sustainability and sustainable practices into their mission statements, value propositions and approach to supply chain management. As Larry Fink, CEO at Blackrock stated in his 2022 Letter to CEO’s, “The next 1,000 unicorns won’t be search engines or social media companies, they’ll be sustainable, scalable innovators – startups that help the world decarbonize and make the energy transition affordable for all consumers.” The world is turning over a new leaf in terms of priorities and reshaping the way we think about capitalism.  

From niche to a necessity: How does ESG affects investments

Between the COVID-19 pandemic and the increasing conversation about the United Nations Sustainable Development Goals (UNSDGs) at the World Economic Forum, sustainable investing moved from what was once a niche to a necessity, with an ever-growing number of managed funds that explicitly invest based on ESG criteria. And further, dictating stock prices as a way to not only do well from a performance perspective but also to mitigate risk in the long term. Financial performance is no longer the sole lens through which investors look. In order to understand a company’s wider strategy, ESG criteria must be taken into account. 

So where does ESG and the rating that comes along with it come into play? Data, data and more data. The big question or the big challenge for corporations right now is how to take the hundreds of data points that determine ESG, standardize it, collect it and report it to investors. What makes up your ESG data? Everything from carbon emissions, electronic waste to access to health care for employee and labor management to board diversity, equal pay between men and women and overall business ethics. 

Why we invested in ESGgo

“I am a firm believer of investing in companies that are not just building great businesses but are also serving good while doing so.” Says Kobi Samboursky, Co-Founder and Managing Partner at Glilot Capital. “This value is clear not only to me and to other investors, but also to management teams, customers, and employees. However, measuring companies on their ESG footprint is very complex as it involves an endless array of data points and it varies dramatically between companies. ESGgo brings novelty to the market by providing a comprehensive view into a company’s ESG state in a simple manner. With such a unique solution, I believe ESGgo will become the center building block in tomorrow’s “doing better” economy.” 

To put things straight, tomorrow’s consumers are becoming more inquisitive on where they place their money, and what businesses are doing with it. Investing in a company like ESGgo means investing in tomorrow’s economy. Putting our bet on a more conscious, sustainable future means taking part of the right side of history. 

Speaking of sides, Orly Glick, CEO and Co-Founder at ESGgo, left her position as a Partner at Vintage Investment Partners after six years, and crossed over to the “dark side” to start her own company. Coming from a background in consulting at Mckinsey and Asset Management and advisory at Merrill Lynch, Orly also previously worked as an engineer at a company that was acquired by HP. So what prompted her transition? Orly shares the multitude of conversations she was having with corporates around employee satisfaction and retention in light of the pandemic, as well as the rise in LP’s interest in ESG and how they can prioritize VC funds and companies that work towards improving it. “If I could help change the world a little bit, and also create a really great B2B enterprise software company, it is a win-win.” says Orly.

Organizations face pain points when it comes to collecting and reporting data. 

With ESG becoming a focal point for companies, there are many pain points that arise along the way. Orly explains what companies are up against:

  1. Understanding what is material to their business and what is not. “What is important for your business is linked to your potential business impact, i.e. what ESG points are connected to you? 
  2. Understanding how to measure that impact
  3. Most importantly, data collection, which is also the the most difficult part:
    How do we collect it? Where do we collect it from and how do we put it all in one place?
    The piece that ties it all together is understanding how to improve your ESG posture.” explains Orly.

Enter ESGgo. ESGgo aims to support companies to measure and analyze their ESG efforts, serving as a single repository for ESG data points from across an organization, unifying the disparate systems and manual workflows through automated data capture, monitoring, gap analysis and benchmarking. Orly shared where and how ESGgo steps in to aid companies on this reporting process. “We’re helping organizations understand their material ESG data points and then what they need to do in order to report them. We help them with data collection across all departments and bring the data into one place to finally give insight as to where they are on their ESG journey. This applies to relevant data points, goals and benchmarks, both internally and against competition, all in one platform that is accessible across the organization.”

Harnessing the power of collaboration

ESG is touched by the finance, HR, sustainability and legal departments and requires a lot of cross team collaboration that isn’t always so cohesive. Think spreadsheets and different methods of reporting to name a couple. A key component to an effective reporting process is, well, effective cross team collaboration that can help smooth out the data flow across the organization. So an important piece to note about ESGgo’s platform is the collaboration tool that aids in the data collection process. Customizable dashboards allow decision-makers to chart progress on sustainability and social issues material to their market or sector while measuring their performance at a granular level against past data, peers, and industry benchmarks. As product features and adoption grow, ESGgo users will gain access to AI-driven insights and tailored recommendations for enhancing their ESG rankings.

Let’s dig a little deeper into a use case. ESGgo’s current sweet spot is aiding companies right before or after an IPO as they are trying to understand what to do with ESG. Investors are asking for reports but the path isn’t really clear. Often organizations not only have data scattered across departments but also across the world. Whether it is a first time report and the question is – what do we need to do and how do we do it, or a seasoned reporter, Orly shares that ESGgo’s platform can aid across the spectrum since the platform is rooted in data collection and workflow management. As the company launches out of stealth, ESGgo is on the way to becoming the operating system for ESG, including recommendations and solutions to further ease and improve the data collection and reporting process. 

Bright future ahead.

To bring it back to Larry Fink’s letter, sustainable investments have reached $4 trillion, and he shares that we are operating in a world he articulates as “stakeholder capitalism”. Just as investors are shifting where they put their money, consumers are also shifting where and how they spend their money. At the end of his letter, Fink states that every company and every industry will be transformed by the transition to a net zero world. He ends with a question: will you lead, or will you be led?

With the investment in ESGgo and Orly and her fantastic team, we see where the world is heading and believe in the role that ESG is and will continue to play in how money flows, companies are built, consumers consume and how we will continue to actively look after the environment for future generations.

This is personally exciting as ESGgo emcompasses what I love about the world of high-tech, which is using technology for good and fusing impact into the “why” (and the “how”) behind a company. Big thanks to Orly for her insights, we are so excited to be a part of your journey!

Leah Zuckerman VC Value Creation

Written by

Leah Zuckerman

Analyst, Value Creation

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