Interview: Creating climate transparency in the finance industry

Switching to a plant-based diet, cycling instead of driving, recycling your plastic waste – these are all things you can do to reduce your climate impact, but there is one thing that is much more simple, and that’s taking a look at your finances. Environment Journal talks to Josh Gregory, the co-founder of Sugi, an app that is hoping to bring transparency to the investment world. 

Between them, 35 of the world’s major banks have provided £2 trillion to fossil fuel companies since the Paris Climate Agreement was adopted in 2015. This means that your Lifetime ISAs or your workplace pension may be fuelling the destruction of the planet, and until recently this information was not readily available to the public.

‘This is where Sugi comes in,’ said co-founder Josh Gregory.

‘Sugi is an app that helps retail investors in the UK to understand the carbon impacts of their investments. It’s a seamless process, people download the app, open it up, log into their broker and they are provided with an environmental overlay.’

The app displays impact data for over 15,000 listed equities – 95% of the listed equities market – over 3,500 exchange-traded funds (ETFs) and certain actively managed funds.

Users link their investment portfolios, which can include ISAs and SIPPs, to Sugi via Moneyhub’s Open Finance API, enabling them to access personalised impact data.

‘The key thing about Sugi is that previously this information has not been readily available to the public, it has been kept for the big asset managers and the professional investors.

‘We want to take those barriers down,’ said Josh.

But just providing consumers with the information is not the end of the road –  banks, companies and corporations are rife with greenwashing.

Pledges to reach net-zero are rarely backed with concrete action, and this web of language makes it very difficult for consumers to truly assess the climate impact.

‘We look at the self-reported emissions as well as modelling for companies that don’t have as good reporting.

‘We also don’t take into account any carbon offsets and that’s for a variety of reasons, but essentially there is so much variety in the quality of offsets and measures that they aren’t necessarily comparable, we can’t just say yes these people have offset that, it’s very complex.

‘There is also a lot of greenwashing in terms of the ESG ratings.

‘A company may have a good ESG rating because they’re planning to build flood defences or protect their facilities from climate change, it doesn’t necessarily mean they are a low pollution company but just that they are orientating themselves to a warmer world.

‘It’s a complex process, but we have developed a detailed algorithm so users can access this information with ease.

‘We want to empower consumers and retail investors by enabling them to make financial decisions based on the climate impact. We believe that just like the big investors and asset managers, everyone should have this information available to them. I believe we need to create fairness and transparency in the financial system.’

The app is due to launch later this month, to get priority access, click here. 

Photo Credit – Pixabay