Good Egg awarded March 2023
About Sugi
Sugi is a platform to help non-professional investors understand, and manage, the climate impact of their investments. Sugi’s app is publicly available and free-to-use; Sugi also works with investment managers to provide climate analytics to their clients.
Summary of findings
The Good Egg criteria is divided into industry/ customer impact, environmental and social.
Sugi was ranked by Ethical Screening and the Good Egg panellists as having a “medium positive impact” overall.
|
|
Low positive impact |
Medium positive impact |
High positive impact |
Negative impact |
Neutral |
N/A |
|
Industry/ customer |
|
/ |
|
|
|
|
|
Environmental |
|
/ |
|
|
|
|
|
Social |
/ |
|
|
|
||
|
Internal (staff/ policies/ offices) |
/ |
|
|
|
|
|
|
Overall |
|
/ |
|
|
|
|
Read the full report here
Industry/ Customer impact findings
- Sugi’s public iOS app is free-to-use and will remain so. The app enables everyday investors to access objective, reliable information from leading environmental data providers about their portfolios.
- Users sign up, link their portfolios using Open Finance technology and receive their personalised impact data, as well as similar investments and benchmarks to compare with. This aims to give them as much context as possible about their investment choices and in doing so, make it easier for them to make greener financial choices. Users are also able to construct a dummy portfolio to research investment products.
- Sugi also works with investment businesses to provide metrics via their existing platforms.
- Sugi states that it will not sell customers data and that it takes the privacy of users seriously. Data is encrypted while in transit and at rest, and cloud servers are secured by industry-standard AWS RDS encryption.
- The app contains an easy link to contact the help team.
- Sugi states that transparency in investing is a core mission of the company. Rather than focusing on Environment, Social and Governance (ESG) metrics which are often aimed at professional investors, it states information is designed to be understandable for everyday investors.
- As an independent third party, Sugi states it is catalysing greater transparency in the asset management industry.
- The Sugi blog and social media posts also provide topical information about green investing for non-experts.
Concerns:
- The app is initially only available for iPhones (no desktop or Android versions are available).
- The Sugi website refers to “green investing” throughout, whilst the app provides information on carbon impact only. We note that investors may consider there are other relevant areas within “green”, (more environmentally sound), investing alongside carbon.
Environmental findings
- Sugi provides free-of-charge carbon impact and temperature alignment information to the investing public. Nature-based metrics are under development and will remain free-of-charge when released. Users can also choose to offset their investment impact using high-quality nature-based carbon credits which meet the highest environmental standards.
Concerns:
- See above r.e. the term “green investing”.
Social findings
- No specific measures to address social issues have been identified as yet.
Concerns:
- The company states it is not yet focusing on measures to address social problems.
Internal (Staff/policies/offices) findings:
- The company is a fully remote company and states that it encourages team members to work around their other, including family, commitments.
- As of 2023, the company has under 10 employees, 40 per cent of which are women (including consultants).
- The company states it is currently reviewing 100 per cent renewable energy tariffs.
Concerns:
- No policies, such as a human rights policy or living wage policy, are currently in place. However, the company has under 10 employees and encourages a healthy work/life balance.
Comments from panellists
- “Sugi is looking great and clearly has a ‘good’ purpose and intentions. I would be happy to see them with a Good Egg mark. However, I would expect them to align their communications with the science and communicate that offsets are not an alternative to emission reductions and while they can be helpful in transition, they are not the solution. They should also be transparent about the risk that carbon cannot be permanently stored in forestry due to harvesting, fire, or disease. (Though restoring forest is a good thing to do regardless, of course).”
Response from Sugi: “Sugi actually started off just offering green information on investments, and we incorporated carbon credits as an additional service responding to user queries. Our ‘house view’ on credits is to optimise the carbon profile of a portfolio, whether through investing in low-carbon, in transition companies, or companies helping with climate solutions. Then one can use credits to balance the remaining emissions. There’s an activist point too: some investors may want to stay and engage with companies to try and make them greener (whether through a proxy voting service or more directly), in which case again high-integrity carbon credits can be a way of also making a climate difference in the here and now.”
- “I tried the app and most of my fund investments have no data showing. It’s unclear as to how they make money and I would expect them to declare this. Trucost is a good source of data so that’s re-assuring. One issue is that sector averages can be misleading. Qualification of the results would be helpful, i.e. it doesn’t tell you how well the fund manager is bringing about change and what the average sector is for that stock. This sort of detail matters. Overall, the product seems potentially useful if they can address the above.
Response from Sugi: “There are a number of additions that are part of our roadmap and we’ll take the panelist’s remarks into account.”
- In general I would say that improving transparency on environmental issues and fund performance is a good thing. I can’t comment on whether the methodology used by Sugi to calculate emissions is solid as I don’t have sufficient detail, and I’m not sure whether the app aggregates up to pension fund level (e.g. a mastertrust fund may be made up of various constituent funds) so I don’t know the audience it may be suitable for. On offsetting, in general we need to be careful that it is not used as a replacement for meaningful carbon reductions this decade. And note that it uses Verra which has been heavily criticised by a Guardian story recently.”
Response from Sugi: “It is our standard position in communications about offsets to stress that offsets are very much a ‘last-mile option’, see for example our blogs on the subject: https://sugi.earth/blog/. My background is in finance for forest conservation and regeneration, so I’m very much aware of the science and pitfalls around certain varieties of project. The current Verra project on the app is one that I’m personally familiar with (and in fact wrote a report on a few years ago), received an AA rating from Sylvera and highlighted in their annual state of the market as one of the best in the space. Other projects we offer B2C and B2B go through a strict vetting process, and also have to receive a high mark from independent certification agencies such as Sylvera.”
Comment from Sugi Founder Josh Gregory:
“We’re thrilled to be awarded the Good Egg, joining a select group of ethically run companies that are passionate about greener finances.Sugi’s mission has always been to increase transparency for everyday investors, to break down barriers and bypass the gatekeepers. Once you discover your real impact, your money can change the world.”
More about Sugi from Good With Money:
New app tracks carbon impact of investments