MANILA, Philippines — Twenty years ago, the Earth Summit in Rio de Janeiro convened the largest ever number of Heads of State to discuss the need to break away from the old business-as-usual economic model into that of a more sustainable one. The term “sustainable development” was hence born, with the aim to balance out the effects of a strengthening global economy against the ecological necessity to conserve the planet’s most precious resources.

Two decades later, it is quite obvious that humanity has yet to act at the scale and urgency needed. According to the website of the “Rio+20” United Nations Conference on Sustainable Development, happening this June 20 to 22, “The world now has seven billion people, and is estimated to reach nine billion by 2050. One out of every five people (1.4 billion) currently lives on $1.25 a day or less. A billion and a half people in the world do not have access to electricity; two and a half billion do not have a toilet; and almost a billion go hungry every day.”

These dismal statistics are compounded with the fact that greenhouse gas emissions continue to rise at alarming levels. And with seven out of the 10 countries most vulnerable to the adverse impacts of climate change located in Asia, the region has more people at risk than in any other part of the world. Indeed, this is clearly not the time for complacency.

 

Rising To The Challenge

According to the Rio+20 website, solutions for many of today’s sustainable development problems are known, and that the conference aims to make these solutions a reality. One such strategy involves broadening the use of renewable energy sources to lower carbon emissions, a topic that was much discussed in the recently-held 7th Asia Clean Energy Forum (ACEF) at the Asian Development Bank (ADB) in Ortigas CBD.

As a response to the challenge, the World Resources Institute (WRI)—a global environmental think tank involved in policy research and analysis addressed to global resource and environmental issues—seeks to accelerate the growth of environmental enterprise in emerging markets through its program, New Ventures.

The New Ventures network consists of six local enterprise “acceleration centers” located in some of the world’s most vibrant emerging economies—Brazil, China, Colombia, India, Indonesia and Mexico. The countries are home to 46 percent of the world’s population, over 12 percent of its GDP, and house 25 percent of the protected biodiversity areas on the planet.

“Our goal is basically to help environmental entrepreneurs raise their funding for mainstream capital,” shares Sanjoy Sanyal, Country Director (India) of New Ventures. “In Asia, we work primarily in China, Indonesia and India, but we’re trying to expand our work a little bit more regional. We have a fairly strong network of investors, many of whom are interested in regional; so one of the things we are keen to explore is whether we can find Philippine entrepreneurs who will match these investors; we can use our expertise in investment facilitation for Filipino entrepreneurs,” he informs.

 

Impact Investments

One of the key trends that will drive the growth of a program like New Ventures is the genuine interest across the world in the area of “impact investing” or investments made into companies, organizations, and funds with the intention to generate measurable social and environmental impact.

According to Sanyal, “New Ventures works primarily with social enterprises or companies with financial sustainable goals, as well as goals towards creating a social environment benefit. We work only with them and we help raise investment capital from mainstream private investors.”

In the last five years, New Ventures has been able to facilitate around $80 million worth of “impact investment deals” in China, and $40 million in India. The number of impact investments in the Philippines, however, is very small. “I’ve looked at 200 deals that have been done by the top 30 to 40 impact investors in the world, and I actually can’t remember one deal that was done in the Philippines,” shares Sanyal.

From a challenge perspective, Sanyal shares that the global environment remains significantly tested. “Obviously, impact investment is still a new thing to do. It’s definitely not core to the business operations of any organization that exists today, so good things do often get sacrificed for certain benefits,” he says, “but one of the specific areas New Ventures is interested in is enterprises in clean energy access, which means providing electricity in un-electrified areas…and there is a reasonable scope of expanding that business in the Philippines.”

Sanyal further asserts that there are broadly three ways to increase the number of impact investment deals in the Philippines. “One is to encourage some of the non-profit organizations to start thinking of transforming or spinning off into a social enterprise. Second, universities and academic institutions must provide incubator facilities for the youth who are interested in entering this space. The third thing I’ve seen work is to encourage Filipinos who have worked abroad to come back and set up social enterprises in the country. At least one of the three should come together to increase the number of deals on impact investments,” he advises.

Published June 17, 2012 in the Business Agenda section of Manila Bulletin.

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