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Changing Capitalism: Behind the Scenes of Impact Investing in Asia Pacific

by Julienne Raboca Asia Jul 13th 20235 mins
Changing Capitalism: Behind the Scenes of Impact Investing in Asia Pacific

This article explores the growing prominence of impact investing and its potential to generate measurable social impact alongside financial returns. Given the challenges faced in changing capitalism for the better, Earth.Org turned to venture builder Anastasios Papadopoulos about the role of investing sectors in overcoming these barriers.

Are investors in Asia embracing a new ambition beyond wealth accumulation? Anastasios Papadopoulos seems to think so. 

Originally from Greece, Papadopoulos launched his tech venture builder IMS Digital Ventures in Hong Kong seven years ago. Today, the company’s portfolio includes companies like OrgHive—which offers a blockchain verification solution for healthier, climate-positive products.

“Talk to most individuals in Asia’s wealthiest communities and you will realise that their life ambition is leaving a legacy,” Papadopoulos told Earth.Org. 

“Sustainability is becoming the driving force of innovative entrepreneurs. It’s also established as synonymous with our own health.”

Anastasios Papadopoulos at CLUB DAO on how founders and investors alike can find an edge in 2023 (Photo courtesy of IMS Digital Ventures)

Anastasios Papadopoulos at CLUB DAO on how founders and investors alike can find an edge in 2023. Image: IMS Digital Ventures.

The Rise of Impact Investing

Papadopoulos is an advocate of impact investing, which refers to investments made into organisations, funds and/or projects with the intention to generate measurable social impact alongside financial returns. 

Unlike other investment vehicles like environmental, social, and corporate governance (ESG) or responsible investing, which focuses on publicly listed companies, impact investing primarily backs impact-driven, non-listed organisations in the form of private equity, debt and/or guarantees.

In the world of impact investing, social sector organisations are a primary focus for investment. These organisations, which encompass a range of entities such as social enterprises, benefit corporations, charities, nonprofits, cooperatives, and community interest companies, have a core mission of addressing social and environmental issues from youth unemployment to deforestation. 

However, despite their efforts to scale their social impact, social sector organisations often face a significant hurdle: the challenge of securing appropriate finance. In fact, the lack of access to finance is widely recognised as the most significant obstacle inhibiting their growth. 

Given the crucial role social organisations play in global economies and their connection to the United Nations Sustainable Development Goals (SDGs), impact investing emerges as a powerful tool with the potential to bridge the financing gap and contribute to the achievement of the Goals (Source: International Finance Corporation, OECD). Also known as the Global Goals, the SDGs were adopted by the United Nations in 2015 as a universal call to action to end poverty, protect the planet, and ensure that by 2030 all people enjoy peace and prosperity.

With its focus on investing in solutions for pressing global problems underlying the SDGs, impact investing presents a promising avenue to effectively address the annual US$2.5 trillion investment gap necessary for SDG implementation. 

Impact Investing in Asia

In the face of the sustainability crisis, Papadopoulos thinks that Asian venture capital and the region’s entrepreneurs are embracing their roles as catalysts for change. 

“A burgeoning trend of forward-thinking start-ups recognises the inherent value of doing good while also achieving commercial success,” he said. 

Hope lies in the alignment of conditions for transformative change: improvement of access to comprehensive data, the rise of consumer demand for sustainability solutions, and technological advancement to meet ambitious visions.

“With its pool of diverse talent, Asia stands ready to devise innovative solutions to tackle critical issues,” said Papadopoulos.

Furthermore, across Southeast Asia, an ecosystem of ambitious entrepreneurs has spearheaded purpose-driven start-ups encompassing sectors from upcycling to urban farming. These initiatives inspire optimism about the pivotal role the region will play in shaping the planet’s future.

From tokenized carbon credits to parametric insurance, are blockchain and oracle technology becoming fundamental to climate action initiatives? Image:: Chainlink Labs.

From tokenised carbon credits to parametric insurance, are blockchain and oracle technology becoming fundamental to climate action initiatives? Image: Chainlink Labs/LinkedIn.

Making Blockchain Work for Sustainability

When used properly, technology has the potential to revolutionise industries and create positive change. Sectors from fashion to agriculture have experimented with blockchain to shed light on traditionally opaque sectors and transform industry practices for the better. 

Companies around the world have been experimenting with blockchain to promote fairness, sustainability, and consumer empowerment. By safeguarding trust in the exchange of information between businesses and consumers, blockchain can ensure the integrity of transactions.

Several companies have been experimenting with the concept of transforming transparency into a competitive advantage. Another Hong Kong-based blockchain environmental platform startup, Allinfra Climate, for example, is helping institutions achieve their sustainability goals. There are also coalitions like Climate Collective, where companies collaboratively build on blockchain at the intersection of Web3 and climate action. Both worked together at last year’s UN Conference of the Parties (COP27) to address carbon emissions.

In the retail sector, companies can unlock the power of data to help brands turn information into valuable insights. These can be leveraged in loyalty programmes, customer engagement strategies, and reward schemes. This approach encourages consumer behaviour change and incentivises brands to adopt sustainable practices. 

IMS Digital Ventures was one of early adopters embracing blockchain to revolutionise supply chains in an effort to create a more equitable and sustainable business landscape. If proven sustainable, this could inspire more companies to use such innovations to empower consumers—enabling them to independently verify the reliability of brands’ claims regarding sustainability or social impact. 

Allinfra's co-founder and Head of Origination, Bill Kentrup, delivers a keynote on the role of Web3 technology in climate-aligned finance.

Allinfra’s co-founder and Head of Origination, Bill Kentrup, delivers a keynote on the role of Web3 technology in climate-aligned finance. Image: Allinfra/LinkedIn.

Not Without Its Challenges

Implementing blockchain solutions for supply chain innovation does not come without its challenges. One critical factor for success is the adoptability of the technology. To ensure widespread acceptance, the final software or platform must prioritise operational efficiency and have an intuitive interface for end users. Companies might address this challenge by identifying tangible use cases and creating solutions that streamline workflows and meet the unique needs of businesses and their users.

Operational efficiency also requires commercial viability. It is important to understand the target audience, existing workflows, and how blockchain technology can serve specific business needs. OrgHive, for example, goes beyond information verification. It enables brands to engage directly with end consumers, turning insights into loyalty programs and campaigns. Creating incentives for behaviour change can influence consumer interactions and make sustainability more attractive to brands.

Finally, securing raw data on the blockchain is another challenge that transcends technical aspects. With multiple stakeholders across the supply chain, ensuring reliable provenance and consolidation is crucial to preserving the integrity of information. Maintaining data integrity and implementing measures to ensure trustworthiness is crucial for any player that enters this space. 

The path to supporting impactful tech start-ups gives us hope. Could it herald the end of flashy technologies with hollow visions? The more industries and consumers demand meaningful solutions that create positive change, the more investors will seek out start-ups that focus on sustainability and equitable trade.

“When it comes to profit and purpose, it doesn’t have to be one or the other,” said Papadopoulos. 

“I hope that my legacy is more than corporate success, but one of tangible, positive impact. We all have a choice to make: we can either look the other way or we can do something about it.” 

You might also like: Sustainable Capitalism: How Corporations Can Deliver Climate Change Solutions

Tagged: finance

About the Author

Julienne Raboca

Julienne Carlos Raboca is a writer and editor currently completing the Erasmus Mundus Master's in Journalism, Media and Globalisation (2022-2024) as a European Commission scholar. She is graduating with a specialisation in Business & Innovation from City, University of London and a joint degree from Aarhus University Denmark and the Danish School of Media and Journalism (DMJX). Originally from the Philippines, Julienne spent more than 10 years in Hong Kong working in publishing and marketing communications across industry sectors from media and PR to wellness. From 2018 to 2019, she became an Atlas Corps fellow where she trained in Washington D.C. and New York as one of the cohort's international leaders in the non-profit sector. Julienne's work has appeared in Vice Media, U.S. News & World Report and Lifestyle Asia among others. She has also previously co-authored a book on the illegal wildlife trade with social enterprise and media platform Project C: Change.

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