23 September 2022

"We need the ESG backlash," Datamaran CEO says

New York City, US. The recent pushback on ESG in the US is needed for the sustainability community to prove its worth, according to Datamaran CEO and co-founder Marjella Lecourt-Alma.

Speaking at an event organised by the ESG risk management software company as part of Climate Week, Lecourt-Alma said: "We need the ESG backlash, it will help us get better. I feel strongly about our responsibility as service providers to build products that are fit for purpose. We want to be challenged and we want to be challenging and so I think, for that reason, ESG backlash is helpful."

In the audience, Richard Howitt, reacted to the comment, arguing that from a business standpoint it was the right approach to have but added: "The motivation of the people that are criticizing the data providers and the credit rating agencies is not because you're getting it all wrong. The criticism is not motivated by the quality of what you are doing, it is motivated by not liking it in the first place. And isn't it right that we also challenge that and recognize that battle?"

Lecourt-Alma replied that "the backlash folks" are thinking about this issue in a very binary way and are politicizing ESG and therefore "even with the best arguments, you are not going to convince them".

"I wouldn't fight that fight and I don't think there's any point fighting this fight. It is an illustration of how much this topic has reached certain levels of normalization," she said.

The backlash is led by the sceptics she said. "There's a lot of early adopters, now we see the pragmatists following and the regulators are getting the late majority [to join in]. And the sceptics, I don't know what's going to happen to them."

The event concluded an eventful couple of weeks for the company who, in the month of September, launched a new website, announced a partnership with JP Morgan and completed a £11.7m Series B funding round led by Fortive with participation from American Electric Power.

J.P. Morgan will use Datamaran's digital platform, ESG Discovery, to get insights into investment opportunities using a double materiality approach to ESG integration.

As for the funding, Datamaran had previously relied on capital raised with high net worth individuals in the UK (£8m).

Lecourt-Alma said this approached was favoured when the companies was first launched because it felt it wasn't "the right company for venture money" at the time.

"We've taken our time to develop products that are enterprise ready," she explained.

But in Q1 2022 a range of new companies and ESG offerings popped up in the market which prompted Datamaran to step up. Out of 25 interested parties, the companies received seven offers before settling on Fortive and American Electric Power.

"For us, the next phase of growth is really about the US, doing more here and growing the team here," she said.