The Etcho app, an app for conscious investors developed by the London based start-up Etcho has come out this week and we at the Armchair Trader gave it a whirl.
As investors take more and more notice of the social and environmental impact that their investments are having, they also have to sift through more and more information about individual company’s carbon footprint, social and environmental responsibility. The app cuts through a lot of this fluff providing a quick and easily digestible score to help guide investment decisions.
“There is a whole generation of investors who want to align their money to their morals, and it is currently too difficult to find relatable sustainability information on current and potential investments. For too long, the finance industry has used impact and ESG data as a tick-box exercise and what the world needs now is a trusted, reliable and relatable impact data on investments, said co-founders Liall Medina and Charlie French.
Straightforward to use
Very straightforward to use, the Etcho app’s aesthetics are clean and simple and the process is fairly intuitive.
The user picks any company by name or ticker and is taken to a dedicated page that offers some basic information about the nature of the company’s business, a share price chart and, most importantly, its sustainability score. The company’s operations are analysed against the UN’s 17 sustainable investment goals which range from no poverty, good health and well-being to affordable and clean energy and preserving life on land and under water.
Investors have the option to fine-tune the scoring to pick those goals that most closely align with their individual values, “.. whether it is looking for the best climate-friendly stocks, health breakthrough, or just a stock that doesn’t negatively affect gender equality. “
Where does the sustainability data come from?
The basis of the analysis is information from three data providers who each use a mixture of methodologies including artificial intelligence, machine learning and analyst research. The data is then analysed in-house to create the Etcho score.
We used the app to score Ballard Power System (BLDP), a NASDAQ-listed company that makes fuel cells for trucks, buses and ships, and found that it scored well on climate action and responsible production but not so well on justice and strong institutions.
Given how wide the range of the UN’s sustainable development goals is, it is near impossible for any company to score 100%, so Ballard’s Etcho score of 55 is fairly respectable, making the company a good choice for investors looking for an environmentally friendly place to put their money.
The database of companies that is currently being analysed is heavy on US companies (very good NASDAQ coverage) and light on UK companies. But the co-founders say the first iteration of the app is just the start and that there are plans to eventually cover companies across the globe and to expand the app to allow wealth manager and IFA solutions.
The iOS version of the app is available for download from today and the Android version is coming online at the end of June.