Adeliada Mehmetaj, CSO & Co-Founder | Briseida Gjoza, CEO & Co-Founder

“Funds are losing money by not integrating ESG properly. ConsciESG offers a platform with the first ESG scores proven to correlate with stock returns, empowering hedge funds and asset managers to achieve higher returns while delivering a positive impact on the environment and society.”

1.   Which is the problem that you are trying to mediate?

ESG integration and returns are seen as a trade-off of each other, as ESG funds have been underperforming for several consecutive years in a row.  Consequently, both in the US and the EU, limited partners have been withdrawing from ESG funds. Only in a single quarter, from Q4 2023 to Q1 2024, we saw over $15 billion being pulled out of ESG funds. Regardless, ESG assets surpassed their $30 trillion target in 2030 and are on an increasing trajectory to reach $40 trillion by 2030. Existing ESG scores and tools, have failed to help funds maintain their alpha-generating strategies, due to the industry and other inherent restrictions in their methodologies. 

ConsciESG, brings the first ESG scores, positively correlated with future stock returns, capable to help funds integrate ESG factors with confidence into their existing investment models, without altering their alpha-generating abilities. Additionally, the ConsciESG platform, helps asset managers transparently communicate their exact progress to targets with their limited partners and other stakeholders, preceding the regulatory restrictions being imposed around ESG transparency at the portfolio level. 

The ConsciESG scoring methodology is designed to ensure that ESG funds create higher economic value by investing in companies that are making the most progress toward their 2030 sustainability targets. Our platform serves as a tool for managing and reporting a fund's impact improvement over time, enhancing transparency and accountability in the process.

Through our methodology, asset managers are encouraged to invest in companies that are advancing on key areas such as decarbonization (SDG 7), water and waste management (SDG 6, 14, and 15), diversity, equity, and inclusion (SDG 5), and decent work practices within the organization and across their supply chains (SDG 8). Additionally, our impact extends to SDG 16, by fostering accountability and transparency in ESG asset management, and to SDG 17, by equipping the industry with tools for effective collaboration toward global goals.

2.   How did the idea to create the company come to mind? How did your team come to be?

As a team, Briseida and Adeliada, know each other since high school. They met Shpat, ConsciESG’s CTO, while studying at the American University in Bulgaria together. After over a decade of acquiring complementary expertise globally, across business management, policymaking, academia, and software development, Briseida and Adeliada, re-united in their home country, Albania, to start ConsciESG. ConsciESG first started as an idea to tackle the Albanian and regional (Western Balkan) brain drain problem. There are well-known examples of globally thriving professionals that have immigrated from Albania, with the most recent one being the former CTO of Open AI, Mira Murati. Briseida and Adeliada, the two co-founders of ConsciESG, were themselves a product of the Albanian brain drain, with both having lived and worked in developed economies for over a decade. 

Understanding that lack of sustainable business practices in the workplace in Albania and the Western Balkan region has been one of the key reasons why Albanian talent has chosen to professionally grow abroad, the founders started with the vision to bring a new perspective for businesses, to help them retain talent. Both founders soon realized that this was not just a problem of the region, but of the World at large. There was a lack of standardization for what impact meant and what composed a better impact company, and the industry most severely affected was being the asset management industry, which only between 2020-2022 lost several trillion due to poor integration of ESG practices and lower returns. Understanding the gap in the market for ESG tools for asset managers, created an opportunity for ConsciESG to reinvent a new approach for asset managers looking to integrate ESG into portfolio decisionmaking. Asking all the fundamental questions, while addressing the two key shortcomings of the existing ESG solutions for fund managers, i.e. inability to deliver true impact and slacking returns, helped the founders build a new scoring model, that could be integrated with ease by fund managers & preserve their alpha-generating abilities. Shpat was invited to join the startup as a CTO, due to his ability to see the whole picture, share the same vision with the founders and help them translate the product, in alignment with the vision, into a well-rounded scalable platform, that meets the top standards of global asset managers.  

Always thinking global, but never forgetting their roots, in the Western Balkans region, comprised of 6 European Emerging markets expected to join the EU by 2030, ConsciESG intends to bring higher exposure to attract more foreign direct investment of higher quality. In addition, being the first ESG solution born in the region itself, ConsciESG plans to cover all regional stock exchange with the ESG data and analytics, preceeding upcoming investors’ requests. This will help the listings of regional companies to become more lucrative and viable for EU fund managers and investors whose ESG criteria, also driven by the increased EC regulations, are more stringent. If successful, the exposure that ConsciESG will bring on the WB6 companies, will result into higher stock valuations and heightened value creation. 

3.   Why did you choose to participate in the Paris Techstars accelerator program? What are you looking forward to the most?

As founders, we knew from the start that we wanted to be part of Techstars. We believed in Techstars' unique model, combining a global reach with a hands-on regional network, to help startups like ours achieve a vision greater than ourselves. The Paris Sustainability Program was our top choice, thanks to Paris’ commitment to sustainability and France’s ambition to become the “Startup Nation.” This program not only aligned with our dedication to ESG at ConsciESG's core but also presented a strategic opportunity to explore Paris for its potential to become our EU headquarters.

4.   What are you the most proud of in your initial journey with your company?

We are proud to have set an ambitious vision from the start: to create a new, profitable model for the asset management industry that drives positive impact on the environment and society, while staying true to its core mission of multiplying clients’ investments.

We have had many proud as well as some low moments. Our proudest moments usually followed the low and hard ones, after we remained firm to our beliefs. They have been the product of our relentless persistence. Throughout this journey, we’ve pushed forward with enthusiasm, even when the world didn’t share our vision. One particularly proud moment was when, after a series of “no, we don’t see alpha potential in ESG,” we received our first “yes.” A hedge fund manager in NYC decided to try our model and later confirmed, “Yes, your model helps predict stock returns.”

While we know this journey will be dynamic, the enthusiasm and perseverance embodied by our core team, CEO, CSO, and CTO, fuel our confidence that ConsciESG will make it to set a new standard for ESG integration by the asset management industry at scale.

5.   How do you plan to measure the positive impact of your company in the next 5 years?

Our goal is to help 1,000 funds align trillions of dollars with companies committed to transitioning to net-zero, implementing circular water and waste management, and fostering fairer, more decent working conditions. Our solution, an impact improvement measurement system, is designed to capture and transparently demonstrate impact at the most granular ESG levels.

Imagine the outcomes: with our platform, funds using our scores could support companies that collectively reduce Scope 1 GHG emissions by millions of metric tons each year, maintain portfolios with zero child labor violations in the supply chain, or transition gigatons of non-renewable energy to renewable alternatives, all while creating billions in economic value.

Good luck team!

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