Society in general, and capital markets in particular, has become acutely aware of the interconnection between corporate environmental, social, and governance (ESG) performance and the need to address systemic risks, such as climate change, biodiversity loss, income inequality and more. Companies have a key role to play in addressing these risks. There is increasing recognition of the strategic value of sustainability which is being elevated to the C-suite and the Board level with growing pressure from investors.
Once merely communicated by corporations, with little accountability, oversight or standards to track accuracy or impact, ESG data is now subject to vetted, standardized reporting.
Indeed, in 2019, 90% of S&P 500 Index Companies published sustainability reports — a number that skyrocketed since the 20% measured in 2011.
Moving the social impact needle
“For the economy and for society to thrive, public and private corporations alike need to be acting in more responsible, sustainable ways,” says Charles Assaf. “It is time the needle around ESG impact is moved forward in a tangible way.”
Enter Novisto: a purpose-driven SaaS organization on a mission to be the world’s leading software solution for integrated corporate sustainability management. Co-founded in 2019 by Charles Assaf, Edouard Clement and Marian Borca, Novisto stemmed from the innovation lab at Diagram Ventures, one of Canada’s pre-eminent venture launchpads for technology startups in the financial, insurance and healthcare sectors.
Novisto streamlines data collection, improves data quality, benchmarks performance and helps companies communicate more effectively with internal and external stakeholders. The result: a robust ERP-like system for ESG data and reporting powered by automation and AI-driven insights.
Marian Borca (left), Charles Assaf (middle) and Edouard Clement (right), founders of Novisto.
An end-to-end, enterprise-grade solution, Novisto supports companies at every stage of their sustainability journey, helping them create value through smarter management and reporting of key business areas such as cybersecurity, GHG emissions, employee diversity, ethics and human rights.
“There are hundreds of ESG metrics that are extremely key to companies,” said Assaf. “But the process of extracting, tracking and reporting on those metrics has historically been deeply fragmented.” Novisto uses high-performing automation to ease the collection and disclosure of ESG data depending on the audience that requires it: shareholders, government regulators, and end-customers alike are empowered to understand, measure and use ESG data to benchmark against competitors in a concrete way.
An “urgent” need
The necessity for active ESG management is rising – rapidly. The International Organization of Securities Commissions (IOSCO) recently stated that it “sees an urgent need to improve the consistency, comparability, and reliability of sustainability reporting.” Numerous countries in the European Union now require concrete ESG disclosure by corporations – and the same standards are finding their way into the North American market. A recent report by KPMG confirms that in 2020 “…at least 70 percent of N100 companies reported on sustainability in all industries.”
Though regulatory ESG disclosure requirements have not yet become subject to law in Canada and the U.S., many companies are eager to lead their industries into a more accountable, responsible future. Novisto counts numerous major customers like CAE, Intact, JetBlue, the TMX Group, Dollarama, Power Corporation, Great West Life and others.
Driven by purpose
Novisto’s latest Series A round of $8M USD, with participation by Formentera Capital, will be used to triple their engineering team, build the go-to-market strategy for the U.S. and Europe, and further their commercialization at scale.
The decision to partner up with Formentera Capital was an easy one. “We have enormous respect for Cherif [Habib] and the entire team at Formentera,” said Assaf. “In them, we saw a little bit of ourselves: authenticity, strong leadership and a commitment to building purpose-driven businesses.”
Indeed, the sense of purpose is palpable at Novisto.
While companies continue to launch charitable initiatives, engage with causes and pursue social impact externally, there remains much to be done in the realm of concrete, measurable and accountable practices that bring about true change.
“The burden of building a sustainable future for society cannot solely rest on non-profit organizations and governments,” said Assaf. “With greater focus on ESG performance, resilience is built within companies. What it achieves benefits not only employees, clients and customers, but society, and our future, as a whole.”
Formentera Capital is an early-stage venture capital firm investing in tech-enabled companies that are good for the world.
