Connecting the bottom line to climate action

Waterloo tech startup helps businesses with sustainability reporting

Amr ElAlfyIn July 2021, BlackRock chief executive Larry Fink issued a stark warning. Climate action is “nothing but window dressing” unless we “put politics aside and create a standard taxonomy for sustainability reporting ... Investors need a single standard by which to judge companies.”

The speech delivered at the G20 Summit in Venice was a revelation. Here was a head of a global investment firm with around $9 trillion in assets talking specific solutions in terms his peers couldn’t ignore.

Amr ElAlfy (PhD ’20) saw this coming – in fact he’d already bet his career on it.

As the first PhD alumnus of Waterloo’s School of Environment, Enterprise and Development (SEED), ElAlfy had already launched a startup – Synergy Sustainability and Development Group. It came to market with an industry-standardized reporting tool to measure exactly how effective organizations have been in fulfilling their social and environmental responsibilities. 

It’s naive to assume companies can detach their financial performance from any sustainability reporting. Companies are here to make money. Decades of data have shown that being more sustainable is better for the bottom line.

“It’s naive to assume companies can detach their financial performance from any sustainability reporting. Companies are here to make money,” ElAlfy says. “Decades of data have shown that being more sustainable is better for the bottom line. We started Synergy Group to help business owners and investors see that return clearly.”

Originally from Egypt, now living in Waterloo, ElAlfy spent close to a decade working as a manager and analyst for Nestle, 3M and other global concerns operating in the Middle East North Africa region (MENA).

His PhD dissertation, “Redefining Strategic Corporate Social Responsibility (CSR) in the Sustainable Development Goals (SDGs) World,” was the inspiration for his startup which would use the 17 United Nations Sustainable Development Goals (SDGs) to assign a value to sustainability.

Adopted by all United Nations Member States in 2015, the SDGs range from Zero Hunger (Goal #2) to Gender Equality (Goal #5) and Climate Action (Goal #13). Offering the corporate world 17 universally agreed upon, measurable goals was the exact taxonomy Fink and the rest of the financial world were looking for.

The real magic trick was gathering and analyzing the data needed to sort through a company’s sustainability efforts and determine baseline values.

AI technology combs through tweets

“AI technology can, for example, comb through more than a million tweets related to the SDGs. This helps us find the signal through the noise and accurately pick out sustainability achievements and opportunities corporations may have missed,” ElAlfy says.

He partnered with Olaf Weber, his thesis advisor and SEED’s sustainable finance guru, and AI expert Shady Shehata (PhD ’09) to get Synergy Group off the ground.

“There were real-world problems we couldn’t solve earlier, due to the lack of technology. With recent advancements in AI and deep learning, we revisited these problems,” Shehata says. “I have the privilege of applying AI and big data analytics to real-world problems in many applications from SDG reporting to fraud detection, health care and education.”

One of Synergy’s first clients was the City of Ottawa where record-setting flooding was putting unprecedented stress on the city’s wastewater infrastructure. One storm alone in 2019 cost the city $5.6 million.

According to city staffer Simon Greenland-Smith, Ottawa’s long-term climate strategy called for infrastructure upgrades or “bigger pipes.” But he needed something, anything, to lighten the city’s flood-related financial burden in the short term.

Shehata agreed to take a look at the problem. It was a different kind of challenge for Synergy, but perhaps their data and AI expertise could help find a solution.

Together, with Greenland-Smith, they determined the highest value-for-money project was for residents to move their downspouts from a paved to non-paved surface, allowing water to absorb in the ground and not rush into overloaded sewer systems.

Simple, right?

“Moving downspouts costs maybe $20 or $30 worth of stuff from the hardware store,” Greenland-Smith says. “It would take a human being many years to canvass the whole city and have a look for instances of misplaced downspouts, and inform homeowners about the easy fix.”

Waterloo student helps design real-world solution

As it turns out they just needed one human with the right skills – Weber’s son Lukas, a Waterloo engineering student. Lukas knew that Google Streetview has images of every address in Ottawa so, using machine learning, they trained an algorithm to capture an image of close to 220,000 homes.

Lukas, Weber and Shehata trained an algorithm to determine which homes had downspout issues with 90 per cent accuracy and created a geo-located database (close to 15 per cent of the homes had downspout issues) showing exactly where the problem areas were.

From there, Greenland-Smith deployed a budget-saving awareness campaign targeted to only those homes. “It was a highlight for me to jump into a meeting with the folks from Synergy and discover how machine learning can solve environmental problems,” he says.

The Ottawa job opened a new door for Synergy. Beyond reporting, they saw a market for real-time technological solutions for the most urgent problems.

“Around the time of the Great Depression there was an urgency to standardize financial reporting tools to prevent future chaos and collapse of financial markets,” ElAlfy says. “We’ve done that. But with the stakes so high and time running out we must move with greater urgency, using every tool we have. That’s Synergy’s core business.”