What is SoftBank and Fifth Wall’s solution to measuring ESG?

A climate tech company has raised $50m from global investors, including SoftBank, BlackRock and proptech VC firm Fifth Wall.

Clarity AI helps companies manage, benchmark and report the social and environmental impact of their assets.

Using data from more than 30,000 companies and 135,000 funds – alongside national and local government data – the tool provides sustainability analysis on users’ investments, offering guidance on complying with regulations and rebalancing portfolios to meet green targets.

For example, Clarity has a dedicated tool for complying with the EU’s Sustainable Finance Disclosure Regulations, allowing investors to report on ‘principal adverse impacts’ of their funds as required by law.

With similar tools for other regulatory requirements and compliance, Clarity says it “reveals the true impact” of a company’s products and operations.

The latest funding round was led by SoftBank Vision Fund 2, valuing the company at $450m. Joining the lead investor were the Fifth Wall Climate Tech Fund and existing investors such as BlackRock.

Fifth Wall’s co-founder Brendan Wallace said the platform is a “highly strategic and valuable solution” for real estate as the industry looks to measure and mitigate its role in climate change.

Rebeca Minguela, founder and CEO of Clarity AI, said: “The social and environmental challenges the world faces and the corresponding economic opportunities unlocked have put impact assessment at the forefront of the minds of investors and organisations.

“Having the support of such an influential group of backers and partners who share our vision for a more equitable, sustainable world is one more proof point that Clarity AI is on the right side of a real trend that we believe will continue to grow.”

Assets under management in sustainable investment strategies reached $35.3tn at the start of 2020 across the US, Europe, Japan, Canada and Australasia – growing by 15% in two years.

Sustainable investment accounts for more than a third of all professionally managed assets in these regions, according to the Global Sustainable Investment Alliance.