Aghnia Dima, ESG Specialist at East Ventures, with Jessica Novia, Chief of Impact from CarbonEthics, and Atika Benedikta, Investment Director at ANGIN, on the importance of good governance
East Ventures


4 April 2024


“Finding the G in ESG”: What is good governance according to investors

Integrating Environmental, Social, and Governance (ESG) principles into business practices is crucial. However, the “G” or Governance aspect, often overlooked, is equally vital. To understand why good governance is essential,  startups and companies must first prioritize it. Aghnia Dima, an ESG Specialist at East Ventures, shared her insights as an investor with Jessica Novia, Chief of Impact from CarbonEthics, in a discussion moderated by Atika Benedikta, Investment Director at ANGIN, at the Ninja Demo Day, part of Ninja Accelerator Program 2023.

As a venture capital firm in Southeast Asia, East Ventures upholds ESG principles internally, as expected by its investors or Limited Partners (LPs), and expects the same of the companies it invests in. Under this cycle of accountability, East Ventures operates with a Sustainable Investment Framework, utilizing an assessment toolkit to monitor portfolio companies and evaluate potential investments.

“To support good governance in our portfolio companies, we do not only help each company identify the list of ESG standards they must comply with but also provide guidance and assistance. Our Investment team always works hand-in-hand with founders to help them achieve the desired ESG targets alongside business performance,” said Dima.

Recognizing the evolving needs of startups at different stages of growth, governance practices need to adapt accordingly. As the company grows, according to Dima, so does its responsibility to protect its employees, shareholders, and stakeholders through proper business practices.

From the startup perspective, Jessica notes that knowing investors’ expectations is helpful. Contrary to the idea that governance requirements hinder commercial operations, Jessica sees them as complementary.

“When considering commercial needs versus good governance, many people think it’s either-or, but in my view, they are actually intertwined. If the governance is good, it could improve productivity and escalate opportunities for profit. It would help the sustainability of the business in the long run. It’s really about finding the equilibrium between good governance and commercial needs,” said Jessica.

East Ventures also believes that governance is not an abstract concept but a fundamental building block of a successful business. Adopting governance practices early on, including anti-bribery policies and whistleblowing mechanisms, will benefit startups by protecting stakeholders and mitigating risks as the company grows.

Ultimately, prioritizing governance within ESG is not merely a regulatory obligation but a strategic imperative for sustainable growth and stakeholder protection. 

For startups looking to enhance their governance practices within the framework of ESG, it is essential to:

  • Identify relevant ESG standards and guidelines applicable to your industry and region.
  • Establish clear governance policies and mechanisms early on, including anti-corruption measures and channels for reporting misconduct.
  • Engage with investors and stakeholders to communicate your commitment to good governance and seek their support in implementing best practices.
  • Continuously assess and adapt your governance practices as your business grows and evolves.

By aligning commercial needs with good governance, startups can unlock long-term value and establish themselves as responsible corporate citizens and reap the benefits of enhanced reputation, increased investor confidence, and greater resilience in the business.