East Ventures’ strategy to strengthen ESG in its ecosystem

The environmental and sustainability issues are becoming more urgent than ever today. No one is immune from these issues, and all stakeholders must take necessary actions to minimize the impact now. With this issue in mind, we at East Ventures strengthen our ESG strategy based on the belief that technology can positively contribute to and impact the environment.

Venture capital firms play an essential role in the sustainability journey of their portfolio companies, especially in guiding them to increase the environmental, social, and governance (ESG) impact on their businesses.

This message was resonated by Avina Sugiarto, Partner at East Ventures, at the Fortune Indonesia Summit 2023 panel discussion,  “Change the World for the Better Planet.”

“At East Ventures, ESG strategy and impacts have been in our DNA since our initiation in 2009. From the investment, we see how technology can positively impact society and economic development in Indonesia,” said Avina.

The 12-year journey of implementing ESG strategy has been about balancing two approaches: risk management and alignment with the UN’s Sustainable Development Goals (SDGs).

Avina elaborated, “We ensure that running businesses minimize negative impacts, including labor regulations, health, worker safety, etc.  All are aligned with the SDGs, and measurable in our Sustainability Report presented to the public.”

Multiple initiatives can be done from the venture capital (VC) side to ensure that ESG strategy and education are well-run in the portfolio. Hence, capacity building and ESG knowledge in the investment, value creation, and legal teams are vital as they are on the ‘front line’ between VCs and startups.

On our sustainability journey, East Ventures currently focuses on sectors including financial inclusion, education and better healthcare, as well as livable sustainable environment. One of our portfolio companies, GoTo Group, aims to “empower progress” by offering infrastructure and technology solutions that help everyone access and thrive in the digital economy.

“We did a measurement of GoTo, which also became the very basis of our Sustainability Report. This is important for both parties as the firm can measure its impact and provide access to the public, and it becomes an indicator for startup portfolio development,” said Avina.

Founders are also pivotal to the company’s sustainability, especially their ESG strategy and views.

“Our investment philosophy always focuses on two important factors: the “2P”. First, the People, which are the founders. They must have three key characteristics: integrity, high self-awareness, and paradoxical traits. The second is, Potential Market. We see if the startup provides a solution for a large market. Finally, we also consider ESG for early-stage startups, especially governance. It becomes fundamental,” explained Avina.

East Ventures has also collaborated with Temasek Foundation in launching the Climate Impact Innovations Challenge (CIIC), Indonesia’s largest climate innovations tech platform, in search of quality climate innovators and to achieve the Net-Zero emissions.

The program aims to solve the four main tracks of ecological challenges: Renewable Energy, Food & Agriculture, Mobility, and Blue Ocean.

To know more about the Climate Impact Innovations Challenge, visit our website. Join the competition and submit your innovations before 26 May 2023 to get the chance to secure a total of IDR 10 Billion prize pool and other perks and benefits.

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This article is a summary of two articles. Read the original articles at Fortune Indonesia and IDN Times.