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Ep 6: Maria Murphy on the Role of ESG in Venture Capital
15 Plays5 months ago
In this episode of Sustainability Square 1, Maria Murphy of Bloom Funding joins GLYNT.AI’s Martha Amram to discuss how small and medium-sized businesses can integrate sustainability and social impact into their growth strategies. Maria highlights the rising role of ESG in venture capital, how sustainability drives operational wins like employee retention, and why companies that prioritize sustainability early gain a lasting competitive edge. Learn how Bloom Funding helps companies access funding, measure impact, and build value-driven business models.
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Transcript
Introduction to Maria Murphy and Bloom Funding
00:00:00
Speaker
what what
00:00:07
Speaker
Hi, I'm speaking today with Maria Murphy of Bloom Funding. um Great to have you on Sustainability Square One. Thanks, Martha, pumped to be here. Good. Well, let's just talk first. What about
Defining Comprehensive Sustainability
00:00:19
Speaker
Bloom Funding? What is it, you know, and what we speak to sustainability managers everywhere, what do they need to know about Bloom? Well, Bloom is a small ah boutique firm based in Atlanta, Canada, and we do a few different things. We help organizations access funding for their innovative research and development, also social innovation through our fundraising for nonprofits. And we also help specifically small and medium-sized businesses to improve their environmental and social impact. So for us at Bloom, sustainability is very comprehensive. Obviously, your carbon accounting, your environmental footprint is really important, ah but we emphasize that you also need to be thinking about your social impact when you're talking about sustainability. So everything from, sure, your emissions, your digital footprint, but also what are you doing about employee wellbeing? What are the community partnerships you're forming? How are your operations facilitating that
00:01:13
Speaker
broader, more principled, value-driven alignment.
The Value of ESG in the Face of Political Challenges
00:01:16
Speaker
So those are the types of services and projects we like to work on. I got to ask you that question that's not going to be on every U.S. person's mind, which is, you know, ESG has gotten this political knockback, but what we see in the markets is investors really want this data. right They find that the environmental data is highly informative of risk exposures and the ask is highly informative of good governance And then there's S reflects on that. So in this environment where maybe that term ESG now is, is not to be used, but the missions and the value of the data might
Sustainability's Role in Startup Growth and Investment
00:01:51
Speaker
still be there. How do you see companies addressing this? Oh, sure. I mean, well, it's interesting. Sometimes we hear specifically from startups, like, Oh, sustainability is a nice to have. It's not a need to have. But then we hear from leaders who see the writing on the wall and the CEOs who are really driven and ambitious and see how sustainability initiatives can help them scale and grow and get investment ready. They're the folks who are preparing to go through you know VC due diligence processes and be able to speak to those issues around good governance, around risk mitigation, future proofing, being able to read market trends, all because they are interested in demonstrating how being conscious and aware of sustainability
00:02:31
Speaker
is actually going to help them drive you know their overall business goals. One stat um I was reading recently, is and this continues to go up, is that over 30% of VC firms are now incorporating some type of ESG analysis into their due diligence process.
Aligning Business Values with Impact and Communication
00:02:46
Speaker
So it's clear that investors see the value of what sustainability means early on, especially yeah being sustainable from the start and building that into your operations makes it so much easier to sustain and scale those operations as you build and grow, rather than trying to figure it out two, three, four years in. The way you're describing it reminds me of security and privacy audits, known as SOC 1. And if you don't get those going early, it's so painful. said But it is good governance. It is good management. It shows a company that is ready to play. So in your day-to-day job, what do you see as wins? like How does that work for you? Well, I would say a few different things. One is that we often encounter business leaders who, I would say, feel stuck. They want to align their businesses with their values. They want to do good. They maybe are feeling the pressure to do good in some capacity from either clients and customers or maybe internally from their own team.
00:03:43
Speaker
but feel overwhelmed with where to get started. And what we do is we specialize in meeting small, medium sized businesses where they're at, trying to get them going. Just what do you start to measure? How do you start to track? What are the ways you're going to be able to communicate that impact and those goals to your target audience, to potential investors.
Sustainability as a Competitive Edge for Talent Acquisition
00:04:03
Speaker
So, you know, we do a couple of different things to help businesses with that. We do really comprehensive one-to-one consulting where we're taking businesses through process and assessment process that we've developed with our partners at the Decency Foundation. And we also do a sustainability bootcamp to get people going. And the wins that we're hoping to really drive and make possible for the people who are working with us is that they're leaving with evidence. They're leaving with data. They are leaving with templates and and tracking tools to help them communicate that the work that they're doing.
00:04:36
Speaker
because you can't understand what you're not measuring and you can't communicate your impact if you haven't taken those measurements and built it into a strategy. and So a win for us is when you know people see the real world application of how sustainability initiatives are actually going to inform their broader operational goals.
00:04:53
Speaker
whether that's, you know, issues around retention, which, you know, the social impact piece is so important or differentiating themselves among competitors. We've seen more and more like the stats are so wild. There's that like Deloitte's annual or global report on Gen Z and millennials. It's something, it's up to 70%, possibly over 70%, I think of millennials and and Gen Z folks are deciding to work for organizations that you know they're increasingly valuing they're but working for an organization that's going to align with their value. So businesses that are being upfront about what their sustainability goals are, are in a major competitive advantage to access that top tier talent.
AI's Environmental Impact and Sustainability Challenges
00:05:31
Speaker
yeah you know I just had that conversation with somebody from India this morning. And as they were talking to me, they were talking about how important it is to certain Indian firms because of the electricity um grid issues, but also the water issues, the states, and we're so familiar with that with the US. And then i as they were talking, I remembered this leader from one of the the top five Indian firms talking about how they were working on decarbonizing steel. And it was a night and weekends project. And the guy was so empowered. by it you know
00:06:02
Speaker
And it was taking, it took him like five months. I mean, it wasn't not a trivial investment of his time. Right. That kind of engagement that just spills over and over and over. Oh, for sure. Turning to impact. So like, if you think of publications like Impact Alpha, which I love, but it always makes you feel good, you know, so a good cheerleader. But I see the market moving to strong business cases. And I saw this last week because the hyperscalers AWS, Microsoft and Google has said, we are going to start marketing LLMs. You know, they're going to cut jobs and we don't care. We're going to say it. And everybody's going like, really? I was going to say that, but that just kind of shows you where the mentality is that we are into the business case land.
00:06:43
Speaker
you get near like Let's take your medium-sized customers for a second. What are the business metrics that they want to put forward to show that differentiation or to enable more value creation? Yeah, I mean, just ah well just a small point about you know all the and the investment and in LLMs and you know just the wild digital footprint that is also accompanying a lot of these tools. And it's interesting to see firms that have been leveraging AI to figure out how to reduce that digital impact, the digital environmental footprint, I mean, you know, in terms of like, I don't know how how their products are are scraping data and how they're determining where they're going for the information to lessen that. It's a very unpopular thing to say about AI is to talk about, you know, and for a digital or remote firm to be thinking, yeah, you should you really need to be also accounting for the environmental footprint of your AI use. I think that there's a major lag
00:07:37
Speaker
for businesses to feel the pressure to implement and start using and to optimize with AI. And yet there's no conversation on what training mechanisms or what type of AI can be used to more efficiently and smartly take advantage of those tools. I think it would be silly to say, don't use AI, but at the same time, you know I am noticing that there's there's going to be a huge environmental impact. There already is from, you know you see these larger conglomerates buying up SMRs and are trying to figure out ah ways of of accounting for the energy use of these tools. ah So I'm going to be really interested to see how that all gets negotiated.
Focus on Climate Justice and Purpose-Driven Partnerships
00:08:15
Speaker
And I think the pressure will be will be quick. But just to go to your your other point, again, about the the business value of where social and environmental impact need to be considered, I like to say that sustainability is actually a secret weapon for SMEs.
00:08:32
Speaker
Because so many operational problems, you know you're thinking about right retention or employee engagement or you know thinking about how to reduce costs in your packaging or hiccups and nervous inconsistencies in your supply chain. Sustainability initiatives actually take care of a whole range of those types of issues.
00:08:52
Speaker
And so, you know, I absolutely think people want to buy from people. I think that's still a very powerful concept in that these larger and firms that are investing in AI mechanisms and tools and giving up on and their hiring and and retention are going to see that lack in in the market reaction. You know, there's there's always pendulum swing swings as as new tools are developed, but I think ultimately you know, under capitalism and exponential profit, you know, you're going to still need people to buy products and use software and access services. And if those people aren't employed, there is going to be no one. I mean, that's sort of a catastrophic, dystopic look. But I have to say from my my academic background, i'm I'm often thinking about those more structural and systemic implications. And I think that, you know, that, yeah, that there will be a cost to that in a to put it as long as I could have possibly responded You know, I agree with you. If 70% of GDP is run by consumers and and then you put consumers out of work, you're just not feeding the system. that right I'm going to send you a link after this ah podcast. We wrote a paper and and released it last week and we compared our machine learning, which is very task oriented to the energy and water use of LLMs. And we came out with a glint because we're so focused in the way we built our machine learning. It's very purpose-built. It's not a generalist thing. We're less than 5% of the energy and water use for comparable tasks. and Wow, that's very exciting. Congratulations. it It's cool, yeah. And it really shines a light on the efficiencies of our machine learning. It shines a light on the value of how we think about things and measure sustainability. And what I learned about it is, boy, if I am an SME and I need to do my data center emissions,
00:10:38
Speaker
I need Glenn to be honest, because it really, if we had to dig in two layers deep, the cloud providers were not providing us very useful information. That was a report quality, to be honest. At the same time to pick up on your thread, I don't have any levers to pull here to make my stuff less energy water intense. And so we built an ecosystem map to say who needs to pull what lever. And what you see is exactly what's going on in the market that the data center providers, at the hyperscalers, the large folks need to go out and secure renewable energy, figure out the water problem on our behalf. And maybe the data centers will compete along those attributes going forward.
00:11:18
Speaker
and we'll pay more for the Oregon data center than the Kentucky data center. The Kentucky one will have more carbon in its energy. That's probably how this market works out because most of us just need these guys to do their job really well because we're just little fish.
00:11:34
Speaker
Last question for you. What do you see as the biggest wins in the next year for you personally, as you work you know in your own career? Because as sustainability leaders, I think a lot of people kind of navigate this new landscape. So for you, as you look ahead, what do you see as the the win? Yeah, I mean, you know, I come to my work in sustainability more from a climate justice lens. My background was primarily in gender and sexuality studies. And that was the area of research and teaching that I was doing before I became, before I started working as a consultant on sustainability projects. And so for me, I have always, I would say.
00:12:10
Speaker
derive my own wins from finding folks who are similarly purpose-driven. The SME space is a good space to do that because, well, first of all, it's like global, a huge global majority of of businesses in the world, but also folks who have smaller teams are typically more aware, not necessarily typically more invested, but more aware of the social and environmental impact of their small team, of their small business, um because it's just often a more intimate community. Folks might just be Yeah, more ah more aware and more informed about how the work is impacting their internal team and the community in which it's a part. So for me, a ah win or or future wins as as we're negotiating changes in the US and no doubt changes in Canada that will be uncertain are headed our way as well.
00:12:59
Speaker
um So I would say ah a win is is finding folks who are similarly purpose-driven and are going to like still be committed to this work, regardless of whether or not they're being legislated to do so. Yeah. And it's going to be a straight through line, just persevere. definite yeah Well, thank you for joining us and I appreciate your time. Thanks, Martha. It was great to meet you.