Inspiration

Evaluation of a company these days is not just about evaluating its financial metrics, rather way more comprehensive. Factors like the company’s operations, management quality, and overall impact on society play a major role. Investing in companies by being cognizant of such sustenance factors is known as ESG-based (Environmental, Social, and Governance) investing. The world has come to a state where we need to be mindful of our long-term impact in even the most frivolous of our actions. And yet, not many investors are aware of the ESG-factors and how their investment decisions affect the world on a large scale. We through our platform, The Green Genie, wish to de-mystify what ESG investing is and lead both small and large-scale investors into making more mindful decisions.

The problem

  1. In today's era, where sustainability should be deeply ingrained in every one of us, we realized that calculating one's personal ESG score comes with huge friction, especially for investors based on their investment portfolio. Most ESG calculators demand a 1-on-1 consultancy which for one, costs a lot, and two is not very accessible to small-scale investors.
  2. While Wealth Managers and IFAs (Individual Financial Advisors) focus on "how to amplify wealth", we don't see any portfolio that talks about- how much of that investment is made towards ESG-compliant firms.
  3. ESG score calculated today is a Schrodinger's Cat. How a consultancy firm calculates it, is simply not known and can change depending on the source. This subjectiveness of something so ubiquitous creates huge ambiguity in the credibility of the score.

Our solution

Educate: A scrolly-telling to educate our users about ESG, its significance for the plant, the role played in investment, and potential risk involved if one is not compliant with a case study of Equifax.

ESG Profiling: We evaluate the investor’s ESG profile based on their stock portfolio, lifestyle, and psychometric inclinations. This automated and free evaluation (comes with an error margin) can be a great Kickstarter for those who are very new to the idea of ESG-driven investment.

Connect: We provide an IFA to create their profile on our platform where investors can find them directly. This bypasses the need for a potential investor to go via a financial service which is not a very affordable solution, especially on a small scale. Our USP kicks in where we evaluate the ESG score of the IFA based on their investment portfolio and highlight the best match when recommending them to the investor. This fosters and encourages more sustainable investment from the IFAs end as well.

Resources: We give investors access to a curated list of resources like blog posts and podcasts to stay up-to-date with the current events revolving around ESG investing.

How we solve the problem

  1. Providing an automated free ESG calculator based on a no-friction questionnaire helps anybody to just sign-up and calculate their individual ESG Score.
  2. Calculating the ESG score of the IFA and WM based on their investment portfolio before recommending them to the investors encourages them to think in terms of "sustainable wealth".
  3. A universal algorithm for ESG score calculation for all investors (definitely has several loopholes and challenges which we progressively hope to resolve).

Implementational overview

  • Frontend stack - Built on NextJS and deployment on Vercel
  • Backend - Python (scraping through company's ESG score) and NodeJS (service layer processing), MongoDB for user database, and Deployed on Heroku
  • Finnhub API to get the real-time price of stocks.

Challenges

  • Understanding how the ESG score is calculated and how to mitigate the subjectiveness of the score based on the consultancy service.
  • The algorithm to train to match IFAs with investors while keeping multifacet variables and ESG score in mind. The training model is a big challenge.

What's next for The Green Genie!

  • A recommender system to match investors to their IFAs
  • A business model where investors can find their own IFAs and WMs with no other middle-man involved.
  • A more sophisticated automated ESG score calculator with only a small error margin.
  • Real-time ESG score anatomy on companies along with their stock prices.

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