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Should I choose the organic tomatoes imported from Spain or the Danish ones grown in greenhouses? And what about my coke: Should it be Pepsi or Coca-Cola?
Questions of that nature have tormented responsible consumers not to mention consumer organizations, for decades.
“When I’m in the supermarket looking for a cereal for my two-year-old daughter, I find myself in a forest of labels. One product is packed in reusable packaging, another is produced locally, a third is fair trade and a fourth is vegan,” says Annu Nieminen:
“Right now it is so difficult for us as consumers to understand which products are in line with our values. I believe we can do better in this day and age, where with the help of our friends, the computers, we have access to analyze so much data.”
Open database with 10,000 companies’ impact
Annu Nieminen is an engineer from Helsinki University of Technology. In her youth, she was also a promising classical musician but ended up working as a management consultant.
But more important for this article is that she is a tech entrepreneur and has founded the Finnish startup, Upright, of which she herself is the CEO.
With the help of her friends, the computers, she and her 40+ team have analyzed more than 150,000 products and services traded on the global market to form an unforeseen simulation of the private sector.
This simulation is the basis for the world’s largest open database on company impact which Upright launched recently week. At present, the database contains open-access information on the total impact of more than 10,000 companies. And more companies are on their way.
“Our goal is that we eventually cover all companies in the world with more than ten employees,” says Annu Nieminen.
The amount of marketing is growing
The database is built to create a clear and precise understanding of how companies influence the world, explains Annu Nieminen.
“We link knowledge generated through science to the way companies act in the real world. So the database is a new source of information that creates insight into how companies concretely affect the world that surrounds them. It tells us whether we practice what we preach,” she says.
And there is a need for that, believes Annu Nieminen.
“There is huge enthusiasm around impact. The volume of words, reports and advertising statements is increasing. And more and more investment products are marketed as sustainable. But I am concerned that the understanding of the companies’ real impact is not growing at the same pace,” she says.
The database is created to help correct this.
“My dream is that everyone has access to real information about companies positive and negative impact when we have to make decisions about what to buy, where we want to work and what we want to invest in,” says Annu Nieminen.
Upright’s four technological building blocks
In order to build its database, Upright has had to obtain different types of data from a multitude of different sources.
Here, Annu Nieminen explains the four most important building blocks.
1: A simulation of the global private sector
We have built a simulation of the entire global private sector, which means a network of all the products and services that can be traded on the global market. There are currently 150,000 nodes in the network.
One of these products could be a soda which is sweetened with stevia and sold in a reusable aluminum can.
We have mapped this product’s supply chain – both upstream and downstream.
First, we mapped out what is needed to make the product: stevia, aluminum, colourings, and so on.
Next, we have mapped what happens to the product after manufacturing. That is, whether it continues through a fast food restaurant, a retailer and so on.
2: Impact profiles on 150,000 products
We have built an impact profile for each and every one of the 150,000 products in our simulation.
In order to do that, we have taught a computer, a neural network, to understand the relationships between words and concepts and classify them.
With machine power, we thereby read hundreds of millions of scientific publications and learned about the health implications, environmental implications, social impact and so on of the individual products and services. We then link these individual products and services to each other to map value chains between them.
3: We profile all the companies
Based on what products and services a company produces and how much these individual products contribute to the company’s total revenue, we draw a full impact profile of each individual company in our database.
4: We collect the companies’ own information
We collect all the information provided by the companies themselves and cross-check it with the data included in our own database.
Maersk breaks even
In the database, the companies’ impact is crystal clear.
Each company is measured on four main parameters – society, knowledge, health and environment – which have a total of 19 sub-parameters such as jobs and taxes, generation and dissemination of knowledge, physical and mental health as well as CO2 emissions and biodiversity.
Together, the 19 parameters form a company profile that shows how the company affects the world, respectively positively and negatively.
And finally, the results are summed up in a score that shows whether the company as a whole enriches or burdens the planet and its inhabitants.
A quick look at a few of the large Danish companies shows that, according to Upright, Novo Nordisk has a positive impact of 48 percent. Carlsberg, on the other hand, has a negative impact ratio of as much as 126 percent in the planetary accounts.
A. P. Møller Maersk makes both a positive and a negative contribution to the planet. But overall they balance each other out. And the company therefore ends up at 0.
Measuring the core business
An important point for Annu Nieminen is that the database paints an overall picture of the companies’ impact.
Because of course it should be taken into account if, for example, a company builds a school for children for the employees of a supplier factory. But this cannot stand alone.
It has to be compared with the company’s core business, she points out and gives an example.
“Let’s say we have two companies, both of which are model citizens in ESG. They have ambitious CO2 reduction programs and extensive reporting and emit the same amount of carbon dioxide. But one company sells soft drinks to children and young people, while the other battles diabetes,” says Annu Nieminen and continues:
“In this naive example, we have a company that creates a problem, while the other company works to solve it. Calculating their emissions is not enough but we must understand the positive impact they create by using those resources.”
Another example could be a tobacco company introducing an effective health program for its 300 employees.
“But they still inflict lung disease on 300 million people every year. The company’s own reporting or ESG ratings will not reflect that, so we need comparable third party data like Upright’s to understand the actual impact of the company’s core business. We have to first look at the companies’ core business and then at their ESG activities,” says Annu Nieminen.
Millions of scientific articles
But can you trust the data in Upright’s database?
“Yes and no,” says Annu Nieminen and comes with an excited outburst.
“Now you are inside the core. I love it,” she says.
Data of this magnitude needed cannot be collected manually.
“Even if I’d had hundreds of little elves to help me, it wouldn’t have been possible. But this is where our friends, the computers, come into the picture,” says Annu Nieminen.
Data is collected and processed, validated and verified with the help of artificial intelligence and machine learning.
The foundation for the assessment of the companies’ impact is several hundred million scientific articles that have been read through by an artificial intelligence.
This data is combined with computer-collected data about the specific companies and their products.
In other words, the database is not based on information provided by the companies themselves. And that is important, believes Annu Nieminen.
“ESG reporting has a big downside, because large companies have far more muscles in relation to reporting than, for example, small, green startups. And it didn’t make sense to me that we should discriminate against the companies that might have the biggest impact just because they don’t have big reporting muscles,” she says.
If the companies have additional information, it will also be taken into account in the assessment, says Annu Nieminen. But companies are included in the database, regardless of whether they submit information or not.
“It’s also a way to provoke them to put more forward and step up their own reporting,” says Annu Nieminen.
Science’s handicap is reflected in the database
When Annu Nieminen still does not want to call Upright’s database infallible, it is because there is an embedded source of error in the science on which it is based.
“We have a lot of knowledge about, for example, CO2 emissions or the impact of sugar on people, and much of this is not at all as complex as you might get the impression of when you listen to the politicians,” says Annu Nieminen.
Nevertheless, there are things science does not yet know.
“For example, diseases among people in the so-called rich countries have been studied much more than diseases among people in poor countries,” says Annu Nieminen.
The database cannot correct this deficiency.
“The honest way to look at it is that to the extent science has a handicap, it will be reflected in our model. But I still believe that this is the best body of knowledge about the companies’ impact that is available – and much better than the companies’ own marketing,” says Annu Nieminen.
The planet is the end customer
Underneath the freely available information on the 10,000 companies more in-depth data on thousands and thousands of more companies. And this is where Upright currently makes its money.
Companies such as Securitas and Nokia as well as professional investors like EQT and Permira use the model to report on their value creation.
But it is actually the free part of the database that occupies Annu Nieminen the most.
“I’m a horrible entrepreneur. Because I always ask myself how much knowledge we can make public without cannibalizing on our business and destroying the company,” she says.
Because fundamentally, the whole motivation for creating Upright is to move the world to a better place.
“I know this sounds cheesy, so it’s up to you whether it should be included in the article. But our planet and humanity are the real reason why I built this model,” says Annu Nieminen:
“The planet is our end customer. It is the planet that should reap the benefits.”
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