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Asia Venturing III: Startups may add value to traditional industries by ESG innovations

Jill Lai, DIGITIMES, Taipei 0

Environmental, social, and governance (ESG) are becoming parts of important criteria to evaluate a company's value. ESG is crucial for a company not only because it brings positive changes to society, but also because it provides another indicator for its investors to evaluate a company's ability to mitigate risks and identify opportunities.

The ESG topic and how it impacts the traditional companies in textiles and apparel, and bike manufacturing were discussed in the latest Asia Venturing webinar on September 14, which was co-hosted by Anchor Taiwan and DIGITIMES, and invited Gulshan Kumar, general manager at lululemon Taiwan, Rachel Lau, managing partner at RHL Ventures, and Marcel Yang, special assistant to CEO of Giant Bicycle, to have a conversion with Richard B Dasher, chief executive, and director at US-Asia Tech Management Center at Stanford University.

ESG impacts investors and companies

ESG concept is having a great impact on ventures companies' investment and strategy too. According to Lau, ESG is RHL Ventures' motto and vision to support the less fortunate people to get privileges and everyone else to innovate and to change the society. RHL Ventures are investing in companies that use technologies to help Indonesian farmers approach consumers in the city or even overseas counties by cutting down the middleman in the food supply chain. In this case, the technology helps shorten the gaps in terms of delivery time, increase consumer satisfaction and more importantly decrease carbon footprint and increase sustainability. Lau also stressed that doing ESG investment requires a lot of communication with LPs to align with the investment return period or digestion period since it may take a little longer time.

From the companies' point of view, ESG is an important element to drive future innovations. Yang said Giant focuses more on the "E," the environmental element. The concept of bike-sharing and circular economy, and some challenges like logistics problems that COVID has brought to the manufacturing supply chain have pushed the company to include ESG elements into its future development.

Example of developing sustainable business

Lululemon is the early adopter of sustainable raw materials for apparel. Kumar said sourcing more sustainable materials is one of the most significant ways that lululemon can make a positive impact globally. Microfiber is one of the examples. In August the company announced that it partnered with sustainable materials innovator, Genomatica to bring Bio-Nylon to its products. Recently, lululemon also partnered with LanzaTech to create the first fabric using recycled carbon emissions.

"So just a couple of examples, to highlight how we focus on what we are in terms of bringing sustainable innovations at the forefront which lead to a better carbon footprint on our products and raw materials," said Kumar. "Sustainable innovations will play a key role in the future of retail and apparel."

Kumar also strongly believes being sustainable, like reducing the carbon footprint for the environment has to be a collective effort with its supply chain partners. That tells why lululemon has recently announced many new collaborations, especially on sustainable raw materials.

(Editor's note: Asia Venturing is a series of monthly roundtables with roadmaps to the future focusing on the hype v.s. the reality of Asia's supply chain-boosted innovation ecosystem, jointly powered by Anchor Taiwan and DIGITIMES. We bring together leading industry luminaries, corporate strategists, experienced investors, and entrepreneurs to expand your network and redefine the possibilities of cross-border opportunities. The replay of the latest session can be seen on Anchor Taiwan or DIGITIMES)

Credit: Anchor Taiwan

(From left to right, top to bottom) Elisa Chiu, founder and CEO of Anchor Taiwan; Richard B. Dasher, chief executive and director at US-Asia Tech Management Center of Stanford University; Marcel Yang, Special Assistant to CEO of Giant Bicycle; Rachel Lau, managing partner at RHL Ventures; Gulshan Kumar, general manager at lululemon Taiwan; Eric Huang, VP of DIGITIMES; Ethan Su, VP of DIGITMIES
Credit: Anchor Taiwan

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