Venture capital firm Gobi Partners recently released its 2022 Sustainability Report, reiterating the firm’s commitment to promoting Environmental, Social, and Governance (ESG) practices. The report also shows the firm’s alignment with the corporate sustainability principles of the United Nations Global Compact, underscoring its dedication to building a sustainable future.
Founded in 2002, Gobi has notably expanded its presence to cover over a dozen emerging markets across Asia, including the Philippines. The firm’s extensive market intelligence provides entrepreneurs with innovation insights, strategic guidance, and investment best practices for emerging and underserved markets.
Throughout the previous year, Gobi has directed its commitments and initiatives towards three essential impact areas: Diversity, Equity, and Inclusion (DEI), TaqwaTech (which empowers Muslims in tech), and the Circular Economy. By forging partnerships and engaging with startups that align their missions with the United Nations’ Sustainable Development Goals, Gobi aims to generate a positive and long-lasting impact on global challenges.
According to Gobi Partners Co-Founder and Chairperson Thomas G. Tsao, recent challenges in the business world highlighted the need for the firm’s ESG-driven approach. “The challenges which affected Silicon Valley Bank and Credit Suisse highlight the need for greater scrutiny, risk management, and emphasis on sustainable investing practices in the global financial system,” noted Tsao. “A focus on sustainability and responsible investing will not only benefit society and the environment but also lead to better long-term financial returns for investors. As one of Asia’s most interconnected venture capital firms, we have the responsibility to step up and drive this sustainability journey.”
Unveiling best practices, policies, and new investment approaches
Gobi’s 2022 Sustainability Report tracks how the firm upholds ESG in everything it does from setting its internal policies to the way it invests.
The firm notably conducted training programs, implemented industry-leading protocols, and fortified its policies to proactively tackle biases, harassment, inequality, data privacy and security risks, as well as legal and regulatory challenges.
Much of Gobi’s sustainability push is led by Carlo Chen-Delantar, Gobi’s ESG and Circular Economy lead, who has raised awareness and built capacity in the Pan-Asian VC community. Chen-Delantar’s work involves engaging stakeholders, driving changes, and creating a roadmap for the Circular Economy.
“Responsible investing, which aligns investments with sustainability goals and drives holistic value creation, is the future of tech investments,” said Chen-Delantar. “Integrating ESG from a startup’s inception fosters responsible growth, resilience, and positive societal and environmental impacts.”
The firm conducts thorough screening and analysis of potential investments, active monitoring of ESG risks in portfolio companies, and collaboration with its own ESG Task Force and Committee to address any identified risks. The Head of ESG provides approval before disbursing funds to investees, and measures are incorporated into the investee’s action plan if ESG risks are discovered during due diligence. Finally, the firm has implemented a grievance mechanism handled by the ESG Committee to address external complaints and ensure resolution.
Feedback from Gobi’s Employee Engagement Survey also shaped new additions into the firm’s employee handbook. These new additions include increasing paternity leave to 10 days, additional health benefits, an Anti-Harassment Policy, and more.
“It’s crucial to address pitfalls within the tech ecosystem, including governance issues and compliance challenges such as sexual harassment, environmental concerns, and labor laws. Proactively addressing these ensures responsible and ethical value creation, fostering a culture of accountability, trust, and sustainability,” added Chen-Delantar.
The firm’s progress in ESG-related matters also shows itself in a number of other ways. For example, over 50% of startups invested in Gobi’s portfolio now have a dedicated individual responsible for overseeing day-to-day ESG policies, risk assessment, and compliance, marking a significant 13.2% increase compared to the previous year.
Gobi’s dedication to ESG even extends to working with external partners to progress in its intended impact areas. As of writing, Gobi has already invested in 62 companies across 22 industries, focusing on Circular Economy principles like circular models, waste reduction, product reuse, and natural resource regeneration.
One of the major tenets of Gobi’s dedication to encouraging a Circular Economy is Scale360°. Scale360° is a Philippine program that aims to foster collaborative circular innovation by bridging the public and private sectors, working towards a sustainable consumer economy characterized by efficient recycling and reuse of resources and products. Gobi, as a community partner of Scale 360° Philippines, contributes valuable insights and real-world examples from its portfolio companies, showcasing how innovation can effectively expedite the transition towards a circular economy.
Scale360° has made it easier to recycle materials. The program collected as much as 549 kg of waste in one month, instituted 120 e-waste drop-off points throughout the Philippines, included 73 groups and individuals in its circular fashion value chain, and so much more.
Chen-Delantar notes there are also competitive advantages in pursuing sustainability. “Embracing ESG in the Philippines’ tech investment landscape is essential for competitiveness, attracting stakeholders who prioritize ethical practices and positioning the country as a leader in responsible tech innovation,” he added.
By embracing a holistic approach to ESG, Gobi strengthens its resolve to create a secure and inclusive environment that prioritizes the safety and confidence of employees and stakeholders alike.
The path forward
Despite the strides it has made, however, Gobi knows there is still much more work to be done, acknowledging there are still several areas for improvement.
The report includes a section dedicated to identifying the firm’s 10 future goals for 2023/24. These goals focus on streamlining ESG compliance for startups in the firm’s portfolio, including new ESG monitoring initiatives and developing programs to better address bias and harassment.
According to the report, tracking how Gobi’s 22 portfolio companies have positively impacted their industries was crucial for determining the firm’s future sustainability-related goals.
Among the startups in Gobi’s portfolio is Manila-based CloudEats. Pioneering the digital transformation of the Southeast Asian food service industry, CloudEats spearheads sustainability efforts by harnessing the power of its extensive network of cloud kitchens. By prioritizing efficiency throughout their operations, CloudEats not only maximizes profitability but also minimizes food waste and its ecological footprint. With an end-to-end approach, the company achieves compounding efficiencies, while dedicating at least 20% of their menu to plant-based options. Furthermore, CloudEats is committed to transitioning to 100% recyclable packaging in the near future, furthering their dedication to sustainable practices.
Other startups in the firm’s portfolio reported significant sustainability gains by helping cut down transport emissions, leveraging robotics to clean up the environment, and offering a safe and inclusive space for customers and employees alike, among others.
With a litany of ESG-focused startups in its portfolio across not only ASEAN but also in the rest of Asia, Gobi’s push for sustainability will certainly have an impact on the world.
The firm’s complete 2022 Sustainability Report can be found here.