By Helmuth Fuchs
Moneycab: Mr. Jiang, after studies in Germany and sustainability management professional work in China and Switzerland you founded Susfinteq and are now focusing on the Chinese market, applying artificial intelligence to automatically generate ESG (Environmental, Social and Governance) assessment scores of Chinese public companies. How far is the product developed, where could you already test it?
Jiang Shan: We are focusing on the Chinese market, serving both – private investors and institutional investors – in terms of Green Finance market. Listening to clients’ demand is our way, and now our product is in the phase of prototype for internal testing, so it is not yet for external test. It is a pure Chinese version currently and we have also a wechat (Tencent platform) application to attract young generations in the field of sustainability investment. Our vision is that “everyone can make sustainability investments”.
„Our vision is that everyone can make sustainability investments.” Jiang Shan, CEO and Founder Susfinteq
Susfinteq’s self-developed quantification framework uses natural language processing techniques and machine learning tools. How do you plan to protect the intellectual property of your solution and what do you think makes it unique in the market?
The only solution to protect our intellectual property is to keep up innovation and adapt to the market, my initial idea has totally been changed after interactions with clients. To educate young generations is super important in China, and most professional clients at the financial market are not easy to convince that ESG or sustainability is material. This has mainly to do with their experience in the past 30 years in China, which focuses less on ecological situations and social dimensions.
The uniqueness of Susfinteq is that we believe young generations have a new mindset and act on sustainability; so our technologies, business practices and promotional language are serving the Chinese transformation into sustainable development in a long term together with young generations. Technologies such as AI (artificial intelligence) or blockchain are means to our goal, so we shall also keep listening to the governmental reforms, social concerns and value system of different generations.
„We believe young generations have a new mindset and act on sustainability“
How did you finance the development of your solution so far and how do you want to finance the next steps?
I spent my own money to develop businesses and my parents also support me financially, which is very important. Luckily I have business partners, who joined me and provided financial resources as well as talents. Next step we will gain financial support from both Venture Capitalists and governmental funds for innovation.
Susfinteq mainly covers Chinese public companies at current stage. What will it take to use the same technology for other markets and which plans do you have to extend the coverage?
I don’t think that our Susfinteq’s current method could fit other markets. Because ESG and sustainability are highly related with culture, social and political systems as well as its own language, different markets must demand their own solutions. For example, “Human Rights” in Chinese context will contain very different elements compared with American context, so ESG assessment on “Human Rights” for Chinese public companies shall be well situated within Chinese scope. Technologies are not the only success factors. EBAY and ALIBABA have the same technologies for E-commerce, but EBAY didn’t adapt well to the Chinese market compared with ALIBABA’s solutions in China.
„ESG and sustainability are highly related with culture, social and political systems as well as its own language.“
What are the main issues you are working on for the next few months and which milestones do you want to achieve in the near future?
In a few months, I am focusing on developing the promotion and education platform to enhance the awareness for young generations. The milestone is to attract 1 million young users to be interested in our wechat platform, learning about the topics “Green Finance”, “Sustainability” and “ESG investment”.
One of the cornerstone of ESG is transparency and comparability. How transparent and open are Chinese companies when it comes to sharing ESG information?
It is very intransparent for Chinese companies’ ESG information at this stage, and it may take a while (about 5 years) to catch up the same level as European public companies in terms of ESG disclosure. Comparability is very difficult given that no structural data is available. Stock exchanges or regulators will work on it by launching policies. Susfinteq will apply the best existing technologies to tackle the challenges, figure out the material ESG issues and transfer the information into valuable decision signals.
You participated in the F10 Fintech accelerator program in 2018. What were your expectations, which measurable results did you achieve through the program?
„F10 is definitely a leading Fintech startup incubator and accelerator, which sticks to offering high quality training and guidance for startups.“
I expected to make our prototype ready for the market according to F10’s program from “prototype” to “product”. In terms of measurable results, we have made the website, demo video, communication on proof of concept with both Chinese and Swiss clients. Susfinteq has gained excellent mentors like Marc Lussy, who has a rich experience in Switzerland and China. F10 is definitely a leading Fintech startup incubator and accelerator, which sticks to offering high quality training and guidance for startups.
You have gained deep insights into the European and Chinese business culture. What could foster a closer relationship what are the hindering factors that have to be overcome?
Business culture is embedded in the basic culture of its own civilization, from historical logic. To foster a closer relationship between Europe and China requires young generations to keep an open mind and a humble attitude that “we are not the best of the world at all, rather we are all beginners to study from each other”.
„To foster a closer relationship between Europe and China requires young generations to keep an open mind and a humble attitude.“
I think that we shall reduce the misleading information from medias on each other, promote young generations’ interactions by exchange and language programs as well as open work permits for young graduates from top universities in Europe and China. All in all, to foster a closer relationship will only be possible by making the young generations from Europe and China to set up deeper and wider communication and cooperation, tackling the common challenges such as sustainable development, Climate Change and poverty reduction.
China is making enormous investments in electric cars and buses. On the other hand it is one of the biggest producers of CO2. How realistic do you think will it be that China will become a positive driving force for the Paris agreement after reaffirming its commitment to the agreement?
I have great confidence that China can contribute a lot for a low carbon economy, because we have no other way to survive, given that 1.3 billion Chinese continue to improve the life quality. We need to make serious sustainability investments, reduce pollution, promote recycling and cut the carbon emission. It is the biggest challenge for China, and it is also the largest market opportunity for entrepreneurs to create value for society in terms of realizing the sustainable development in China and in the world. I am one of these entrepreneurs, believing that we can deliver a better world for our next generations.
„I have great confidence that China can contribute a lot for a low carbon economy.“
At the end of the interview you are granted two wishes. What are these?
My first wish is that everyone will make sustainability investments and create a better world. My second wish is that I can find a lovely soulmate as my lifelong wife in 2019.
About the Company:
SUSFINTEQ is an AI-driven Fintech startup specializing in Chinese Green Finance & Sustainable / ESG Investment. SUSFINTEQ applies Natural Language Processing & Machine Learning to automatically assess ESG management, performance and risks of Chinese public companies in Chinese context. SUSFINTEQ’s current target clients are asset managers, banks, insurers. Clients also include private investors (especially younger generations), who will engage with sustainable investment through our services platform. SUSFINTEQ aims to become the leading infrastructure platform for sustainable investment in China.
This interview was made possible thanks to F10, the leading Swiss Fintech Incubator and Accelerator.