How venture capital is creating an inclusive and sustainable future for Southeast Asia

East Ventures, a pioneering and leading sector-agnostic venture capital firm in Indonesia, recently launched its inaugural report named East Ventures – Sustainability Report 2022. This report outlines the robust progress and range of initiatives among the firm and its ecosystem, as well as the sustainable investment framework towards sustainability. This report is now also available in Bahasa Indonesia version, which is dedicated to further serve its purpose as the guideline for all stakeholders.

Avina Sugiarto, Venture Partner at East Ventures underlines the importance of ESG incorporation and the firm’s commitment in being at the forefront of the changing consumer trends and behavior towards ESG. The commitment is based on many changes in consumerism, specifically how consumers are increasingly concerned about ethical business practices, a shift in preference towards environmentally friendly and socially responsible products and services, and workers choosing companies that are impactful.

Therefore, stronger ESG narratives and implementation directly increase a firm’s overall productivity from their talent, as well as provide higher transparency and reputation protection with good governance and proper risk management.

With regards to sustainability, there is a common misconception that it only revolves around the environment and the earth. Utari Octavianty as the Co-Founder and Chief Sustainability Officer of Indonesian-based fishery startup, Aruna has attested to this misconception. She believes that sustainability is all about people, planet, and profit; and these 3P share an equal sense of importance and responsibility. Based on this notion, Aruna decided to create a division that focuses on sustainability and how as a co-founder she wants to be in charge of overall progress towards improvement.

With all the progress towards sustainability, digitalization is serving as a strong underpinning factor. Especially how technology can be applied to take tech-based solutions and business models to last mile populations in low resource settings. These solutions contribute far less to greenhouse gas emissions and thus are sustainable by definition. This can be observed in other examples of East Ventures’ sustainability principles in action like Ruangguru in edtech, Homage in healthtech, and Nalagenetics and Nusantics in biotech.

East Ventures has the opportunity to address the urban-rural connectivity divide through notable fintech investments such as KoinWorks, Stockbit, and Warung Pintar. This is relevant from an ESG perspective because accessibility will accelerate the move from awareness to adoption.

Another challenge commonly faced by startups and corporations alike is how the firm can balance the profit and impact. Devahuti Choudhury, SDG Impact Specialist of UNDP explained that it requires a collaborative approach adopted by governments, private capital investors and startups. Despite the joint effort from all parties, it is also important to have a clear roadmap which is dedicated to identifying areas with huge potential.

In the East Ventures – Sustainability Report 2022, East Ventures provided the sustainable investment framework in providing the guideline for sustainable practices, as well as the impacts brought by the firm and its ecosystem. There are 16 Sustainable Development Goals (SDG) contributed by the firm and its ecosystem, with further ESG integration within the organization, starting from the leadership, the team, and across their investment lifecycle.

“The lack of standardization of measurement and metrics are slowing our progress towards ESG, and we hope this report can serve as one of the voluntary guidelines to boost the progress much faster,” said Avina.

East Ventures – Sustainability Report 2022 both in Indonesian and English versions can be downloaded here.

This article is quoting the discussion on East Ventures’ recent webinar.