It’s here! It’s there! It’s every-f—ing-where… ESG!
(Soon-to-be-obvious note: We very much enjoyed AppleTV’s heartwarming series – Ted Lasso.)
If you’re confused about what ESG means in today’s investing environment you’re not alone. Greenwashing is everywhere – particularly in Proptech. And to be very candid, it’s dilutive from a ‘social good’ perspective. Interior design software – ESG. Rent to own platform – ESG. Virtual home tours – ESG. Site safety solution - ESG. Ugh! The acronym is becoming a parody of itself.
“It’s kind of like back in the 80s when ‘bad’ meant ‘good’”
– Ted Lasso
Labels and box-checking; templates and rating systems and standards; NEW (better?) templates and rating systems and standards; and lots of frameworks (consultants love frameworks) - this is ESG today. Unfortunately, it’s often more of a marketing tool than a true value driver. But it doesn’t have to be. If we can stop with the all-or-nothing, “the world is ending” hyperbole and grift and get to work on improving processes, we can make a tangible difference. The best part is, we already have the necessary ingredients: robust tools/technologies to measure and analyze, economic incentives to encourage investment and increased regulatory/social oversight to motivate action. At GroundBreak we are backing entrepreneurs that have recognized and embraced these three elements. And you need all three to effect change.
“You [calling for the end of the world] is like Woody Allen playing the clarinet. I don’t want to hear it”
– Ted Lasso
At the heart of what we’re trying to foster and support within our investment thesis is sustainability. And not sustainability as a classification (e.g. “green” or not “green”), but as a business concept; a measure of whether something can operate reliably and predictably into the foreseeable future while minimizing any detrimental impacts, social and/or environmental. In most cases in the Proptech world, this is tied into what goes into or onto a physical structure/site, what’s required to operate that structure/site and the ultimate output of that structure/site. To understand these things, you need to collect (Qflow), measure (Green Badger), track and analyze (Enertiv) data. The more inputs you collect, the better the data, the better equipped you are to understand and analyze. To us, these are the basic building blocks of sustainability. Processes, not labels or checked boxes.
Putting these processes in place is no easy task, but stewards within the built environment can start now. Many are. Connell McGill, the CEO of Enertiv, recently put together a great piece “The Proven Blueprint: From ESG 1.0 to 3.0”. It’s worth a read as it’s a no bullsh*t guide for institutional real estate owners looking to start a journey of continuous improvement toward sustainability.
"Taking on a challenge is a lot like riding a horse, isn't it? If you're comfortable while you're doing it, you're probably doing it wrong."
- Ted Lasso
We are focused on sustainability - reliably and predictably sourcing exciting new companies that are tackling the social and environmental challenges of our time with real business solutions, and not merely “virtue signaling.” If that’s you, let us know.
“I believe in hope. I believe in Believe.”
– Ted Lasso
From your friends at GroundBreak Ventures