ESG certification movement faces headwinds

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Hello readers,

Have you ever noticed the letter B enclosed in a circle and labeled on your grocery packaging?

The B Corp logo has in recent years become synonymous with being sustainable and good for the environment. But now the certification is under scrutiny. Critics of B Corp are calling for more transparency in how companies are measured.

We hope you enjoy this month’s issue.

THE BIG STORY

Image credit: Timmy Loen

Room for venture capital in Vietnam: Impact fund Earth VC
For the founders of Earth Venture Capital, Vietnam is at the frontier in the battle against climate change. But the commitment to invest in the country’s climate tech sector pales in comparison to other countries.

“When people wanted to invest in a big problem many years ago, they invested in fintech. Climate change is today’s fintech – it’s the big problem facing us today,” said Tien Nguyen, founder of the climate tech VC.

Tien’s company is now looking to invest in large-scale solutions that can be deployed in Vietnam and other economies vulnerable to climate change. So far, the VC has been involved in the early funding rounds of Clearbot, a Hong Kong-based marine services startup, and Alterpacks, a Singapore-based new material tech startup.

DEEP READS

The struggle for the soul of the B Corp movement
Among a myriad of environmental, social, and governance (ESG) benchmarks, frameworks, and certifications created in the past two decades, B Corp (“B” stands for “benefit”) has been seen as a trustworthy measure of a company’s social and environmental impact.

The ESG certification was created in 2006 by nonprofit B Lab, whose mission is to make for-profit businesses “a force for good.”

Today, there are about 6,400 B Corp certified businesses from consumer products to fintech firms across 161 industries around the world. The B Corp label is seen on products from Ben & Jerry’s, Patagonia, Body Shop, Aesop, and more.

To gain the B Corp certification, firms have to meet a certain level of social and environmental performance, public transparency, and legal accountability.

But just as the ESG standards and so-called stakeholder capitalism have begun to see pushback, the B Corp certification has also come under scrutiny. Some critics are wary of the organization’s growing focus on issuing certifications to multinational corporations.

When Nespresso announced that it had received B Corp certification last April, it was met with backlash. Many smaller companies that were early adopters of the standards were concerned that big corporations would do the bare minimum to “greenwash” themselves to be rubber stamped by B Corp.

In June, some 30 certified companies signed an open letter to B Lab, the nonprofit organization that issues the certification, to protest the coffee company’s certification. The letter pointed to the company’s history of child labor and wage theft on farms, along with reports on the abuse of its factory workers.

“Unless B Corp starts to focus on the deep design of business — how companies are owned, who’s represented on their board, where their profits go — it risks falling far short of its own marketing claims,” said Erinch Sahan, former CEO of the World Fair Trade Organization.

TRENDING NEWS

You can also check out Tech in Asia’s coverage of Asia’s greentech scene here.

1️⃣ EU carbon hits 100 euros taking cost of polluting to record high
EU carbon price hit an all-time high of €101 a ton, marking it the first time to surpass the triple-digit mark.

Why it matters:
The rising carbon price will likely incentivize companies to start considering less polluting alternatives or investments in climate technologies such as carbon capture and storage.

Image credit: Unsplash

2️⃣ Fossil-fuel subsidies hit record US$1 trillion in 2022, IEA says
Last year, governments spent a record US$1 trillion subsidizing fossil fuels, including oil, natural gas, electricity and coal, according to the International Energy Agency.

Why it matters:
Policymakers around the world are trying to grapple with the immediate threat of soaring energy prices while pushing for a transition to low-carbon sources.

3️⃣ China’s BYD Has Philippines, Vietnam, Indonesia vying for electric-car plant
The Philippines, Vietnam, and Indonesia are competing to host an electric-vehicle assembly plant for Chinese automaker BYD, the world’s second-largest maker of EVs.

Why it matters:
The Southeast Asian nations are vying to attract investments in EVs as global carmakers shift away from the combustion engine – a transition that China has been dominating.

Image credit: Unsplash

4️⃣ Economists urge China to think ‘beyond GDP’ to head off climate risks
A group of prominent economists, including two former chief economists of the World Bank, has urged China to adopt a new development model based on wellbeing rather than economic growth in order to fulfil its 2060 net-zero emissions goals.

Why it matters:
China is facing mounting pressure to cut back on carbon emissions and set more ambitious climate goals.

STARTUP WATCH

1️⃣ Amazon backs India-based meat startup FreshToHome in $104m funding round
FreshToHome, an online grocer that operates mainly in India and the United Arab Emirates, has raised a US$104 million series D round, which was led by Amazon’s Smbhav Venture Fund and joined by Investcorp and others.

2️⃣ Loam Bio raises $75m, launches tools to improve soil carbon capture
Australia-based biotech startup Loam Bio, which aims to transform carbon dioxide removal, has raised a US$73 million series B round led by US-based Lowercarbon Capital and Australia-based climate specialist Wollemi Capital, with participation from Horizons Ventures, Acre Venture Partners and others.

3️⃣ Risilience, a climate analytics and risk assessment platform for enterprises, raises $26m
Risilience, a software-as-a-service-based analytics platform that helps companies assess their climate risk and plan their transition toward net-zero carbon emissions, has raised US$26 million in a series B funding round.

4️⃣ Taiwan’s WeMo raises $15m from AppWorks to accelerate SEA expansion
WeMo Corp, an urban mobility tech frim, has completed a series A+ round led by AppWorks, with participation from Taiwan National Development Fund, bringing the total amount raised this round to US$15 million.

With the new capital injection, WeMo plans to expand its service to Southeast Asia, with an emphasis on Indonesia and Thailand.

5️⃣ SG energy intelligence provider closes $1.3m pre-series A
Singapore-based energy tech startup Ampotech has raised US$1.3 million in a pre-series A round to further its international expansion.

The funding round was led by climate tech investor Earth VC. KSL Maritime Ventures, the VC arm of The Kuok Maritime Group, participated in the round together with existing Ampotech investors, Silicon Solution Ventures and SEEDS Capital. The startup develops smart devices that provide insights into energy consumption and activity patterns within a customer’s premises.

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