There is more need now than ever for sustainability in business. With many companies seeing the benefits of adopting more ESG practices, it is important that these initiatives are integrated properly. A lack of standards and digital tools have historically made it difficult and inaccessible for some companies to achieve these goals. A new platform Ecolytics helps businesses measure, report, and integrate their environmental impacts.
In this episode of The Understory Podcast, we speak with Hazel Horvath, CEO and Founder of Ecolytics. Hazel shares how she discovered an ESG educational gap for companies after spending many years working in the environmental sector. She talks about current challenges that companies face when trying to become more sustainable, and how the Ecolytics method for measuring and sharing impact makes it easier for businesses to achieve certifications and other impact recognition. Tune in to learn more about net zero strategies, B Corps, and ESG tools.
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Episode Transcript:
JJ (Host of The Understory Podcast): Hi, welcome to another episode of The Understory Podcast. Understory is a global community of entrepreneurs and startups that are focused on sustainability and climate technology innovations. Today we are really excited to have Hazel Horvath join us. Hazel is the CEO and Founder of Ecolytics. Welcome to The Understory Podcast, we're very excited to have you here. Tell us a little bit more about your background before we dive into Ecolytics.
Hazel Horvath (CEO and Founder of Ecolytics): Thank you so much for having me. I'm very excited to be here. I can tell you a little bit about my background. I have broad experience within the environmental field. I started out in nonprofits and got my degree from Duke in environmental policy. The environmental field has taken me around the globe, to Beijing and Geneva where I worked on green financing and impact investments.
I've had a broad range of experiences within the environmental field. Working at Greenpeace for a bit allowed me to explore a lot of different aspects of the tradeoffs within the environmental space. It has also allowed me to learn more about what that means for corporate responsibility. That's what led into founding Ecolytics- I saw that educational gap for companies. The field of ESG and sustainability is confusing and difficult to tackle all at once, especially with small capacities on teams. Teams do want to do the right thing, but don’t have the education and capacity to do the right things on sustainability, so that's what Ecolytics aims to tackle.
JJ: Great! Before we talk a little bit more about Ecolytics and its product, given your experience Hazel, how have you seen the change in climate policies since you started? You have an international perspective and probably have seen different ways of moving climate policies forward.
Hazel: That's a very timely question with the Senate just passing an important bill for climate. When I started in the field during the past administration, there were significant rollbacks of environmental regulations. Recently, there was also a Supreme Court ruling that follows us into this next administration of limiting the EPA's power. So, in the US specifically, it's been an interesting contrast between these past two administrations over the past couple years.
Internationally, it's been interesting to see the development of different global standards and efforts to come up with a standardization of what impact means on both the national and global scale. Having that literacy of what a carbon disclosure or sustainability standard means, having it be rigorous and understood by the general public and companies, and achieving those sorts of standards and certifications. While that's become a policy standard in places like Europe, the US is still a little behind with those certifications being written into our laws.
JJ: That's a really helpful perspective, giving us that view between where the US is and Europe where, as you said, it's a little bit ahead in terms of policymaking and regulations and so forth. Tell us a little bit more about Ecolytics. Why did you start the company? What is the mission?
Hazel: Yeah, definitely! Like I touched on a little bit at the beginning, there's a bunch of different driving reasons of why I started the company. The first being that to fill the capacity gap when it comes to sustainability. There's really this barrier, if companies want to access sustainability services, they must hire a consultant that can cost over six figures. It's only a static measurement of their company and doesn't track their progress along the way because they have these fixed contracts. There's already that high-cost barrier to enter.
The second issue is that sustainability is confusing. There are hundreds of ESG metrics. Which ones should you be tracking for your company? How do you make sense of all of them? How do you start tracking them and then do you have a system to track them? All these things are questions that are left unanswered for most businesses.
That last piece is the transparency and trust piece. Once you make all this progress and are doing the right thing for your company in terms of climate and sustainability, how do you communicate those results so you're not greenwashing or hiding different categories? As well as communicating well with your stakeholders.
Ecolytics can offer solutions to those three pieces. We’re able to break down the barriers of sustainability by being a software as a service platform. Automatically that’s a much lower barrier to entry for costs for companies, and companies can integrate it into their own teams. This allows companies to take ownership over their sustainability and impact, rather it being from an outside source. With our software, we can help companies break down those confusing barriers. We help companies measure and benchmark their impact. Our platform can then help them improve by providing these automated and unique recommendations to the company based on the data inputted. We can get them to those results even quicker.
The last piece, which helps companies become more transparent, is through action pages so they can just link to their website or their product, depending on who the company wants to share this information with. Those pages allow them to give a transparent record of progress on what they're doing, goals they've achieved, and milestones they've reached. They can be more transparent with their customers, which is the ultimate anecdote for greenwashing.
JJ: Tell us a little bit more about the benchmarks you talked about; a lot of these companies in order to get their sustainability program up and running have to hire consultants and other service providers. Whereas here, you're able to use data and software to essentially make that process more efficient. For our audience, if you don't mind, tell us a bit more about the benchmarking. I think that's it’s important to help organizations understand where they are today, and where they need to go.
Hazel: Yes, we start with benchmarking the most quantifiable aspect of your business - your carbon footprint. From your bills, we can calculate most of your footprint, and what you're spending money on. We can then take, say your energy bill, since you're spending money on that amount of electricity your space is using, we take that and calculate your footprint from that amount. This is applied to everything you're spending money on.
A lot of public companies are thinking about the different scopes of emissions right now, so I don't want to get too into the weeds. The EPA defines three scopes of direct and indirect emissions and we're able to do all of Scope 1 and 2 and most of Scope 3 through those bills. However, there are a couple other data sources that companies need to provide - like shipping or employee travel. We can then calculate the full footprint.
By taking all these sources, we can calculate footprint, but impact doesn't just mean climate footprint. In that, we're also able to investigate things like waste and water usage and then also look more broadly at impact. Different indicators, through just a simple employee survey, you can start tracking things like your company’s wage disparities or diversity metrics. You can start getting into the more social and governance piece of environmental, social, and governance, or ESG.
JJ: That's really helpful! Tell us more about how clients use these reports and what you usually see. Whether it's best practice or challenges customers have when they take the insights. How do they implement better ways of doing things?
Hazel: That is what the second step of our platform does, we give clients recommendations in four distinct categories. We can help them with energy efficiency. Retrofits, for example, and different actions to take to reduce their energy use. Energy efficiency being one category. Circular economy being the second, to help reduce their waste. Things like purchasing more sustainable office supplies or implementing a better recycling program are things we recommend.
We also help companies achieve certifications. Through certifications, they can set goals so we can help them track their progress along the way as milestones within their sustainability journeys. The last piece is helping companies offset or purchase carbon removals. They can make this progress along the way and become net zero which is a huge milestone.
JJ: There's a lot of talk about achieving net zero. Hazel, from your perspective and from what you see from customers, what are some of the predominant ways that customers are thinking about achieving net zero today?
Hazel: Our philosophy is to reduce and then offset those emissions that you just can't reduce any further. Many companies, depending on size and sector, will have different approaches to this. Whether this means offsetting their complete footprint now, and then taking on efficiency measures, or first working to do those efficiency measures, and offsetting the remainder. Some variations of those activities are what customers are doing to become net zero and have that badge.
JJ: Got it. Tell us a little bit more about the customer profile. Are these smaller businesses, are these enterprises? What sort of customers do you think are most ready to take on the challenge and necessity of ESG and sustainability today? Who are most eager to do that?
Hazel: We find that customers who are most often coming to us already have some sort of sustainability pledge or certification in their mind, often a B-Corp certification. Some context for the listeners: a B-Corp certification has become an emerging gold standard for defining impact and what metrics need to be tracked to become more impactful. It's an assessment that companies can take based on over 200 metrics, that range throughout the different ESG factors - both planet and people.
This standard is difficult to achieve for companies. Like I mentioned, there's over 200 metrics that you must be tracking to get the certification. Companies that want to be B Corp certified have this goal of doing sustainability well. But there's this gap of knowledge in terms of how do I start measuring and what are the steps I need to take to then get a high score on the assessment? It's difficult to reach the certification. We're able to come in and help companies with that tracking. We help them reach those improvements and give them a guide and milestones of how they can get a better score and achieve this.
JJ: That's a really good explanation of what your clients are looking for.
Switching gears - Hazel, as a founder and CEO of a company working in sustainability and helping companies be sustainable, what are the major challenges that you see from your customers?
Hazel: I think that challenges in the sustainability field involve capacity and the confusing nature of the field as it stands right now. There are many companies out there are really trying to make a difference and holding themselves to a higher standard because they've seen how that's not just a public good, but also the business incentive in becoming sustainable. With that in mind, since we're at this pivotal moment, a lot of companies are realizing and seeing how it can help their business. Getting to those actual improvements and reaching those certifications are where the real challenge is.
JJ: Thank you for that perspective. Last question: how do companies find Ecolytics if they want to see a demo or understand a bit more about your offerings.
Hazel: Absolutely! You can find us on all social platforms @ecolytics.io and then our website is also www.ecolytics.io. You can request a demo directly from this site, and we’re open for new beta testers too if companies are interested in that. Feel free to contact me as well.
JJ: Excellent Hazel. Thank you so much for joining us today on this episode of The Understory Podcast. We look forward to more exciting announcements from Ecolytics. Thank you for all your work in the sustainability space.
Hazel: Thank you so much for having me this was great.
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