#StartupsEverywhere Profile: George Lee, Founder & CEO, Hydrus.ai
This profile is part of #StartupsEverywhere, an ongoing series highlighting startup leaders in ecosystems across the country. This interview has been edited for length, content, and clarity.
Revolutionizing the use of Environmental, Social, and Governance Data through innovative AI systems
Throughout his time working with environmental, social, and governance data in the finance industry, George Lee knew there had to be a better way to manage and analyze the data than manual entry spreadsheets. Now he’s the Founder & CEO of Hydrus.ai—a startup working to tackle that challenge. We spoke with George to learn more about the Hydrus platform, his experience working with internationally-based employees and clients, and what policymakers should keep front of mind while thinking about developing technologies.
Tell us about your background. What led you to create Hydrus.ai?
I previously worked at a large consulting firm and did a lot of the manual work of collecting, storing, reporting, and analyzing their environmental, social, and governance (ESG) data. But I didn't enjoy that day-to-day work and I figured there had to be a more efficient way to manage enterprises’ sustainability and ESG data. So I decided to turn my focus to building a platform to automate and streamline as much of that work as possible.
What does the Hydrus.ai platform do?
We are a software company that helps companies operationalize their ESG data. We mainly work with both small and large publicly-traded companies in North America, Europe, and Australia. Our platform helps a company track energy use, water waste, or greenhouse gas emissions and streamline the process of understanding where these outputs are coming from, as well as how they might make their business operations more efficient. While we tend to focus a lot of our work on the “environmental” aspect of ESG, companies can also use our platform to store and analyze other critical data, such as diversity data or corporate social satisfaction. Our goal is to provide our clients with accurate, high-integrity data and the ability to determine the provenance of that data.
How is your workforce distributed? How has that been impacted by the war in Ukraine?
We're primarily a remote team, with teams distributed throughout the U.S., Ukraine, and India. The war has obviously been hard for our Ukrainian team. For example, about a month ago, one of our designers was taking a call in the dark because the Russians had attacked the Ukrainian power infrastructure leading to rolling blackouts. Part of our Ukrainian team has gone to Poland in order to stay safe, but some of our people want to remain in Western Ukraine. It’s gut-wrenching to be on a call with a valued person on our team and know they just want to have power and be safe, yet they're still putting their energy into contributing to our work. I think people should understand that one of the ripple effects of this conflict is the direct impact it has on this great talent pool based in Ukraine that many U.S. companies and individuals are connected to. We know we can still support them and we’re committed to doing all we can to do just that.
How have you navigated the data privacy and local storage requirements that vary among the different jurisdictions in which you operate?
I know a lot of the legacy platforms and competitors in this space built before the regulatory changes are struggling because they literally need to rework their entire infrastructure in some cases, but that fortunately hasn’t been our experience. Our exposure to privacy laws like the EU General Data Protection Regulation (GDPR) is also limited because we don’t sell or share data, or do any sort of marketing, for example.
We built our company after the global patchwork of data localization and privacy requirements began to cement. As a result, we decided to build our product in an adaptable way that could be bespoke and tailored to the needs, location, and regulatory environment of each client. That hasn’t been easy, but it is necessary because nearly all of our agreements—especially those in Europe, for example—have a whole section on GDPR, data processing, data storage, third-party handling, etc. A big part of this adaptability is that we’re built on Amazon Web Services. And if you look at the compliance of a lot of these cloud systems, they have most of the certifications for the infrastructure that a lot of these companies or countries require. It really takes care of a lot of the challenges around compliance for us as we focus on the continued development of our platform.
Policymakers around the world have become more active in developing legislation around the use and development of emerging technologies, such as artificial intelligence (AI). What should policymakers keep in mind when thinking about this issue?
One of the areas we use AI for our product is around predictive analytics. We’ve implemented these large language models because it makes our product more powerful than other products on the market in this space. Leveraging AI helps us create more value for our customers and gives us a bit of competitive advantage. We know we can do a lot with AI and machine learning and it is an important part of our business. When it comes to regulation, I’m not sure we are big enough to be able to grapple with some of the challenges presented there around, for example, certainty in what's happening to the data when we're feeding it into a model or first sending it off to a third party, such as an OpenAI. Of course, we’ll do our best to follow along with the regulations as they come out, but regulators should consider the experiences and resources of startups like us, who are often leveraging models built by others as they formulate those policies.
Is there anything else that you want policymakers to know?
Globally, the norms around ESG reporting vary widely. Just in the way we were discussing earlier around privacy and data storage, different jurisdictions have varying and evolving reporting standards around ESG data. In the U.S., we’re paying close attention to the Securities and Exchange Commission’s proposed climate guidelines that we expect to be finalized in the coming years. Europe, similarly, has recently adopted its own disclosure and reporting directives. In Japan, meanwhile, ESG reporting is mandatory for corporations. It's also becoming required in South Korea and Australia where they have their own securities regulations on what data has to be reported. Even the baseline understanding of the value of ESG data and reporting regulations is different in every single territory. We also see some parts of the world who don't hold ESG in the same limelight, so to speak, or are just focused on the “E”—environmental—of ESG. While it’s encouraging that lots of places are thinking about this, global standards around reporting might be beneficial to advance initiatives around ESG and increase trust.
What are your goals for Hydrus.ai moving forward?
In the short term, we're looking to fundraise and improve our sales and marketing. In the long term, we're hoping to build a few strategic partnerships with different industry leading consulting firms. We think this will help us get the word out about the benefits of our platform and help companies further operationalize their data. We’re also building a podcast to share the best practices around how companies comply with some of these policies that governments are formulating regarding corporate ESG. ESG and sustainability work is still very nascent. People are still trying to figure out, “What do we track? What does ESG success look like?” Broadly speaking, we hope people spend some more time learning about these concepts because there's a huge knowledge gap that needs to be filled. And we need a mix of both policymakers and the private sector working together to fill those gaps as this industry matures and becomes more prominent.
All of the information in this profile was accurate at the date and time of publication.
Engine works to ensure that policymakers look for insight from the startup ecosystem when they are considering programs and legislation that affect entrepreneurs. Together, our voice is louder and more effective. Many of our lawmakers do not have first-hand experience with the country's thriving startup ecosystem, so it’s our job to amplify that perspective. To nominate a person, company, or organization to be featured in our #StartupsEverywhere series, email advocacy@engine.is.
