East Ventures, a enterprise capital (VC) agency working in Indonesia and Southeast Asia, just lately unveiled its East Ventures Sustainability Report 2024. The report showcases the agency’s ongoing dedication to integrating Environmental, Social, and Governance (ESG) frameworks all through its operations and ecosystem. It highlights the agency’s strides in producing optimistic societal impacts whereas guaranteeing accountable enterprise practices.
East Ventures has crafted insurance policies that underpin its funding choices, emphasising sustainable investments. It integrates ESG and influence administration rules, serving as a tenet in fostering accountable investing practices and enhancing company governance inside its portfolio firms.
In an e-mail interview with e27, East Ventures Companion Melisa Irene explains the agency’s method to ESG and the way it’s selling it to its portfolio firms.
East Ventures’ funding technique fosters optimistic impacts and mitigates ESG dangers. By its ‘Doing Good’ method, the agency evaluates its investments’ potential optimistic environmental and societal outcomes utilizing a Idea of Change framework. Concurrently, the ‘Avoiding Hurt’ facet focuses on danger mitigation, incorporating ESG requirements into the choice course of and guaranteeing ongoing compliance with rules and greatest practices.
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To grasp the method, take a look at an edited excerpt of the dialog.
What specific challenges do you face in selling ESG in your work? How do you deal with them?
ESG dangers and alternatives cowl broad matters, together with greenhouse fuel emissions, range and inclusion, and enterprise ethics. Every matter adheres to varied requirements and frameworks that define the very best stage of ESG efficiency for firms. Aligning to all these requirements and frameworks requires in depth effort and sources; therefore, prioritisation is important.
Our method is tailor-made to the distinctive traits of our enterprise and portfolio firms. We utilise a materiality-driven technique, which implies that by participating collaboratively with our portfolio firms, we outline the precedence of ESG matters most related to respective firms’ verticals. This permits us to deal with probably the most vital ESG dangers and alternatives moderately than addressing all of them indifferently.
Furthermore, we additionally take into account the maturity stage of our portfolio firms when implementing ESG. We don’t demand that our portfolio meet the complete standards of ESG instantly whereas disregarding the businesses’ monetary sustainability. The underside line is that the corporate must adjust to all related ESG rules. Past compliance, we collaboratively develop an ESG and influence motion plan with our portfolio firms, laying out fast and long-term enhancements. Consequently, ESG turns into not only a compliance train however a value-adding initiative that fosters firm development.
What steps do you’re taking to advertise sustainability in your portfolio firms?
Our funding crew and ESG Specialists actively work with our portfolio firms to map out their ESG integration and maximise alternatives for sustainable development and influence creation.
For instance, we work with our portfolio firm within the agriculture sector to determine their detailed ESG dangers and alternatives for enchancment. The mission’s outputs embody suggestions on aligning with sustainability greatest practices to attenuate biodiversity danger and enhancements in Environmental and social administration practices.
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Following the mission, we labored with the corporate to develop a method to enhance inner processes and tackle respective ESG dangers higher.
Allow us to get again to the fundamentals: How is implementing sustainability good for companies?
Sustainability is a long-term purpose that may be achieved by ESG implementation. ESG components have gotten extra essential in influencing international enterprise and funding selections. This development stems from the realisation that sustainability and accountability are very important for mitigating dangers and fostering alternatives, resulting in enduring worth creation.
As a enterprise capital agency, our position in shaping the longer term entails supporting modern corporations that drive optimistic change. By incorporating ESG standards in our funding methods, we goal to generate worth for our buyers, portfolio firms, and the broader society.
We proactively search for funding prospects in firms aligned with our ESG commitments. Our funding emphasises enterprises tackling native challenges, enhancing effectivity and effectiveness, and making a major optimistic influence. Our sustainable funding method is designed to construct a portfolio with significant influence, contributing to long-term worth.
What facets do you want to enhance on in your sustainability journey?
We’ve got been launching our annual Sustainability Report for the final three years. It helps us higher perceive our efforts and serves as an evaluation of our operation and initiatives for long-term sustainability/ESG objectives.
We’ve got gained some insightful insights/findings that assist us strategise our operation higher, and so they have been applied in our operation just lately. We consider that if we do properly, we wish to do good, too. So, we wish to create extra initiatives and collaborate extra with the related stakeholders to additional create impacts and promote sustainability.
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What’s your massive agenda concerning sustainability this yr?
We’re devoted to repeatedly enhancing our sustainability initiatives and upholding our rules and pledges. From an funding perspective, we’ll proceed making investments that align with our ESG commitments.
Furthermore, we stay dedicated to creating and supporting this house’s initiatives; as an example, we now have once more launched the Local weather Impression Improvements Problem with Temasek Basis to empower climate-tech options in Indonesia and Southeast Asia.
We additionally launched a free web-based emission calculator for firms in Southeast Asia referred to as ECOVISEA.
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Picture Credit score: East Ventures
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