Investing platform raises $11M to offer climate investing from a different angle to ESG ratings

Net Purpose, a platform for sustainable investors, has raised $11 million in a Series A round led by ETF Partners, funding that will be used to expand its product and team, says the company.

The company is benefitting from a shift to investing in sustainable products. According to the UN Principles for Responsible Investment, $120 trillion is committed to invest sustainably, with allocations growing at 22% year on year.

New investors M-Tech Capital and Exceptional Ventures joined the round, and existing investors Jim O’Neill, former chair of Goldman Sachs Asset Management; Kevin Gould, co-founder IHS Markit; the Louis Family; Illuminate Financial and Revent increased their commitments.

Currently, investors rely on reported and estimated data and ESG ratings. These tend to measure financial risk, not social and environmental return. Net Purpose claims its platform looks more at social and environmental performance based on factual reporting.

Indeed, there are claims that MSCI, the largest ESG rating company, doesn’t even try to measure the impact of a corporation.

Sam Duncan, Net Purpose founder and CEO said: “Net Purpose’ core differentiator is that we provide investment-grade facts on the social and environmental performance of companies and investment portfolios and no black box ratings or scores. Facts measure social and environmental performance, not financial risk. Net Purpose also has more and higher quality data than any other provider.”

Net Purpose competitors are ESG Ratings providers like MSCI and Sustainalytics.