SEBA Alumnus Brings Sustainability to the Forefront of Investment Decisions

Hendrik Bartel is setting out to revolutionize the way firms analyze the companies they invest in. “Right now, the whole sustainability reporting industry is a dinosaur,” he says.

Instead of focusing on financial data as the only motivator behind investment decisions, Bartel and his team have designed a software platform that focuses on the organization’s sustainability behaviors.

“What we at do TruValue Labs is examine no financial data,” Bartel explains. “This means we’re measuring things like leadership, product integrity and innovation, workplace behaviors and issues, environmental impact, social impact, and economic sustainability.”

“We want to change the way people think about sustainability and make this a value tool for investors and corporations.”

The value of the platform’s approach is quickly becoming clear: TruValue’s research has yielded a positive anecdotal correlation between the sustainability trends of a company and the accompanying stock price. In other words, companies that are committed to sustainable business practices make for profitable investments.

DATA AS CURRENCY

While the investment benefits are evident, it is important to note that TruValue Labs, itself, is not a hedge fund or a group of stock pickers. What is available through TruValue is data—a more comprehensive picture of a company—rather than recommendations on particular stocks. 

At its core, what TruValue Labs is trying to do is give a more complete picture of a company to investors. In a world awash with readily available financial data, Bartel and TruValue Labs are bringing a wide-angle look at what is going on inside organizations.

“Everyone can look at the financials of a company, and most of them can make sense of it, but as we’ve seen during the financial crises during the late 2000s, if you’re just looking at the financials of the company, you can find yourself being misled,” Bartel explains. “Having access to more holistic data and looking at the pillars of good, well-run companies is very important. Making that readily available to investors and making sustainability data more approachable is one of our goals.”

AN IDEA BORN AT SAINT MARY’S

In 2000, Hendrik Bartel moved from Germany to the Bay Area and immersed himself in technology. Working for blue bloods like Amazon and Cisco, as well as smaller start-ups like Flip, Bartel eventually decided to join SEBA’s Trans-Global MBA Program to formalize the experience he had gained from the prior decade.

While enrolled, he met Professor James Hawley, and what started out as a conversation, eventually turned into TruValue Labs.

“I think this company is a direct result of coming to Saint Mary’s. I would have in-depth conversations with Jim Hawley, and those were really the beginnings of Truvalue Labs,” Bartel says.

Professor Hawley, a prominent national voice in the realm of corporate governance, still works with his former student. Three years after talking about Bartel about his start-up idea, Hawley has stayed on with TruValue as the Chief ESG (Environmental, Social and Corporate Governance) Strategist.

Along with Hawley and SEBA Associate Dean of Graduate Business Yung-Jae Lee—who sits on the advisory board at TruValue—Bartel has also reached out to current SEBA undergraduates. He has made TruValue’s data available to the Responsible Investment Club at Saint Mary’s, and has taken on members Simon Tryzna and Max Teranen as interns.

A NEW, INNOVATIVE PATH

Bartel sees TruValue being supported by two critical pillars of successful start-ups: utilizing disruptive technology or techniques in an existing space and supplying a real need in the marketplace.

Bartel views the existing model of sustainability reporting as problematic for several reasons. To begin with, the reporting model in place is hugely labor intensive, with analysts needing months to compile, make sense of, and publish data. This says nothing of the fact that during the time required to compile a report, the corporate landscape is continually changing. The final published document is dated the very moment it becomes available.

“What we’ve done,” explains Bartel, “is build algorithms that do real-time data analytics with regards to a company’s sustainability. We’re capable of taking in vast amounts of information and sifting through them as they come in. Our technology—through things like semantic analysis, natural language analysis, machine learning and artificial intelligence (this technology stack is also called “cognitive computing”)—sorts through publicly available information, identifies the valuable elements of it, and raises it out of the text.”

TRENDING TOOLS

TruValue Labs currently offers data analytics generated by this technology through tru360.co. The product is aimed at brokerage firms, portfolio managers and other professional investors.

“We’re not so much about sustainability ratings, but more about sustainability trends,” he says. “Trends are lot more indicative of how a company is doing. With those trends, you can do comparisons with different companies, and you can isolate things like how their leadership is being perceived or how their environmental issues look compared to a competitor’s. You can take companies and compare them head to head, or you can take a company and measure it against the industry or against benchmarks against the SP 500. It’s a dynamic experience.”

“We’re trying to grow the product into something that is known and accepted both in the engineering and investing world,” he says.

FORCASTING A FUTURE

“Right now we’re extremely focused on selling tru360,” says Bartel. The company is in the midst of bringing large customers online, as well as growing their own staff. Bartel, a native German, says a European office in Berlin is also on the horizon.

“The next step is into retail and consumer investors,” he explains. “What we’re seeing is that for a lot of younger investors, millennial investors who have just joined the workforce, sustainability is hugely important. People are beginning to value their money in a different way. Truvalue.me is heavily centered on bringing relevant news to these types of investors and letting them make their own decisions with it.”

“I think that doing good things for the sake of doing them doesn’t really cut it,” Bartel says. “You should try to do good things that impact other people, and that’s really what we’re aiming for. We’re trying scale the impact of our good deeds; we want to show that good deeds can be scalable.”

According to TruValue Labs, scaling good deeds isn’t only achievable—it’s also profitable.