Businesses must increasingly capitalize on technology, not only to achieve exponential growth, but also to achieve their sustainability goals.
A CRITICAL problem faces the world. How can we combat climate change and transition to a net-zero emissions energy system while simultaneously meeting growing energy demand?
Embracing and investing in the digital economy, which will enable technological advancements to accelerate and achieve Sustainable Development Goals and Goals, is a crucial strategy to address this challenge.
From data-driven technologies and artificial intelligence to the Internet of Things and machine learning, they can all be catalysts for us to undertake this huge, necessary change.
In particular, new economy companies play an important role as cutting-edge technology innovators offering solutions to mitigate carbon emissions. These fast-growing organizations are harnessing the potential of new technologies and can change the entire value chain of businesses across industries.
This is evident from the global rise in the number of rapidly transforming climate unicorns and startups providing technology in industry, climate, renewable energy, electric vehicles, agriculture and more. the competitive landscape while fighting climate change.
During a panel discussion at a recent HSBC Malaysia event focused on developing the startup ecosystem in the country, representatives from HSBC, Penjana Kapital, payment solutions provider GHL Systems Berhad and venture capital Gobi Partners agreed on the importance of supporting new economic ventures.
Panelists discussed the need for businesses to capitalize on technology, not only to achieve exponential growth, but also to achieve their sustainability goals. Some of the ideas discussed at the event were detailed in this article.
Capitalizing on new economy companies can be a key solution to meeting the climate challenge
According to the International Energy Agency (IEA), in 2050, almost half of global carbon emissions reductions will come from technologies that are currently only at the demonstration or prototype stage. Major innovation efforts must be made now to bring these new technologies to market on time.
New economy companies will increasingly play a leading role in the transition, propelled by their ability to create revolutionary solutions that can drive lasting change.
Partnering with new economy companies will enable companies to catalyze shared action to integrate digital solutions for decarbonization and redefine the energy landscape, while building lasting trust with customers and investors.
After all, investors and venture capitalists are increasingly recognizing the importance of sustainability in business and deploying environmental, social and governance (ESG) criteria as part of their selection process.
Market regulators also require companies to disclose their ESG information because this information serves as a window into a company’s sustainability practices.
Customers have begun to examine the sustainability practices of their favorite brands to make responsible, eco-friendly choices. We can expect consumer regulators to start insisting that the carbon footprint of products be disclosed on labels to help consumers make informed purchasing decisions. Those of us involved in supply chains with a US or European consumer as the end buyer will feel this change most quickly.
Meanwhile, global multinationals are integrating sustainability analysis into their supply chain requirements, especially as they gradually measure and track Scope 3 emissions in their bid to decarbonize.
Capital activation is crucial to facilitate the development of new economy businesses
In Malaysia, greater investments in the new economy will be key to supporting the development of the startup ecosystem; being one of the long-term goals of the country, as evidenced by the various initiatives, policies, roadmaps, funding, grants and capacity building programs that the country’s government has rolled out so far for startups.
This includes the Madani Framework, the new Industrial Master Plan 2030, the Malaysia Startup Ecosystem Roadmap 2021-2030 as well as the National Energy Transition Roadmap – all of which incorporate crucial policies to support development and sustainable growth of startups in the country.
Providing access to capital will be fundamental to facilitating the advancement of businesses in the new economy. Public-private partnerships play an important role in supporting these companies through financing, pooled and diversified resources, offering expertise and providing links to networks. This will be imperative to drive the wider development and deployment of innovative technologies.
At HSBC, we are strengthening our support for the startup ecosystem – this includes the development of the new economy.
We are in an excellent position to serve the growing number of unlisted technology unicorns and listed digital companies in Asia through HSBC Innovation Banking, which uniquely combines innovation expertise and tailored financial and lending services, with HSBC’s global platform. This combination allows us to support innovative companies, through all their life stages: from early stage, through growth, to late-stage public and private companies.
HSBC also plans to provide $1 billion in funding to early-stage climate technology companies around the world, helping to develop new solutions such as electric vehicle charging, battery storage, power and technology. sustainable agriculture and carbon removal technologies.
By leveraging the bank’s global reach, in-house climate technology expertise and our innovation banking proposition, HSBC can offer unrivaled support to these pioneering businesses.
HSBC’s support of Malaysia’s innovation economy and its sustainable growth remains a priority for our business here.
Our recently launched HSBC New Economy Fund worth RM500 million will enable high-growth new economy businesses across Malaysia to access financing solutions to enable them to innovate and to develop oneself. The fund will primarily support lending to technology-focused businesses and emerging startups at the Series B stage and beyond that are exploiting opportunities within Malaysia’s growing digital economy.
As we look to the future, it is clear that the digital economy will have an ever-increasing influence in propelling our country’s economic growth and prosperity.
New economy companies particularly have the potential to facilitate technological advancements that are essential to accelerating and achieving sustainable development goals and objectives. Businesses now have a major opportunity to capitalize on technology and the new economy to align with their sustainability ambitions.
Karel Doshi is Head of Commercial Banking at HSBC Malaysia.
The opinions expressed here are those of the author.
Click on here for more details on the HSBC New Economy Fund.