[InnoVEX FORUM 2022] Leveraging ESG and Digital Transformation for Business Innovation

 2022-09-22 By: InnoVEX Team

Digital transformation has opened up new opportunities for more business models and diverse customer journeys and experiences to accommodate such needs. As consumers and companies have a growing interest in ESG (Environmental, social, and corporate governance); digital transformation offers a new opportunity to integrate the ESG framework into the corporate digital transformation strategy.

Titled "Bridging ESG and digital transformation - Initiate the "beyond E" generation", the forum focused on how tech players can participate in the ESG trends and succeed in their ESG goals. The forum's speakers included:

  • Victor Chen, Co-Founder & CEO of Foodland Ventures
  • Elisa Chiu, Founder & CEO of Anchor Taiwan
  • Jeffrey Wu, Founder & CEO of WeMo Scooter

  • Better Business Can and Should be Better for the Environment

    Foodland Ventures is an agri-foodtech VC and accelerator that invests in and helps out early stage entrepreneurs in the agritech and foodtech sector. Victor Chen, Co-Founder and CEO of Foodland Ventures focused his keynote speech on digital transformation in the agritech and foodtech industries to achieve ESG goals. As the food supply chain remains one of the main producers of carbon emission, many issues need to be solved within the food industry.

    Currently, governments and customers are paying attention to the growing ESG trends which are often reflected in their purchases. For founders or startup teams, the biggest problem is often in proving to the market that the businesses they pursue can achieve a 2-pronged success in terms of profitability and sustainability. ESG in the food sector is not limited to the commonly held ideas of alternative nutrient sources as any innovation that improves the efficiency of the food industry can still contribute to the Environment segment of ESG. The main purpose remains to make unsustainable products sustainable through innovations. Innovative products in the food industry need to be uncompromising on quality while meeting expectations and be driven by ESG goals.

    Other efforts such as providing workers and employees with better compensation packages, utilizing technology to help upgrade traditional players, etc. will also help contribute to achieving ESG goals set by various organizations and governments. Regardless of the approach taken by the startups or companies, it is important to remember that at the end of the day; as long as the business remains a business, it must be profitable. Getting the customers to push the business forward and proving that there is business will potentially promote more developments of new products that can fulfill the customer demands.

    Taiwan's Role in the ESG Trends

    Anchor Taiwan is a platform for corporates, startups and investors to harness ecosystem building and venture capital for world-positive endeavors. Elisa Chiu, Founder & CEO of Anchor Taiwan focused her keynote speech on the roles Taiwan has or can undertake to achieve ESG goals. As many of these goals are driven by customers who demand more accountability in terms of the products they buy or spend money on. Usually Taiwan plays a more passive role in this change as pressure on international brands become a cue or trend for manufacturers and companies in Taiwan to follow rather than lead on.

    Taiwan remains one of the largest and most significant manufacturing hubs for global electronics, components, and other high-tech products & solutions; especially in semiconductors. This key role means Taiwanese companies can have a large impact on any changes on the ESG side as their efforts in carbon reduction (the Environment/ E side of ESG) will have a profound positive impact for their business customers. This also shows that the multiple layers in the supply chain today might add some complications in the drive to achieving ESG goals. However, the interconnectivity of supply chains will facilitate a rippling effect when a major player figures out how to achieve it.

    ESG in Taiwan is not limited to high tech and ICT industries as every company can have their own contribution to the efforts. Resources such as expertise or information about the supply chain can also help ESG goals as Taiwanese companies can scale up innovations that contribute to ESG that originally is limited only to laboratories. At the same time, ESG and CVC can go hand in hand together as large corporations now have pivoted to include ESG in their strategies as further global trends such as Industry 5.0 also promote companies to contribute to society.

    ESG Starts with Governance and Corporate

    WeMo Scooter developed a 24/7 on-demand vehicle rental service that moves the relationship between people and vehicles from ownership to usership. Jeffrey Wu, Founder & CEO of WeMo Scooter shared how cities today face a lot of problems including urbanization, overcrowded traffic, pollution, stagnant wages, and more. These problems are very real and very persistent for a very long time and it is almost inevitable that all of the cities will be more crowded.

    Business practices today need to follow ESG and start from the governance side all the way from the top and a part of the corporate strategy. Incorporating ESG goals have to start from the very beginning of the company as they need to surround the core value of the company, the culture, or the mission statement to make sure the execution to achieve these goals are done properly. Businesses pursuing their ESG goals cannot abandon their business aspect and have to be consumer focused; offering solutions that are better than the current offerings.

    For a company to be successful in their ESG goals, the corporate needs to actively support their efforts which can be reflected in their corporate value. If the product or solution also contributes to their ESG goals, getting more users to join will also help contribute to the goals. Companies can also leverage technology, data, and users to create multifunction products and solutions to help solve issues. In smart cities, transportation can also help gather real-time information such as pollution levels, traffic conditions, flooding, etc. Integrating solutions with similar external products is always an option as customers might need different things at different times to provide reliable and consistent services with the necessary safety measures.

    How ESG and Digital Transformation Further Enhance Businesses

    The final segment of the forum is a panel discussion featuring Elisa Chiu, Founder & CEO of Anchor Taiwan and Jeffrey Wu, Founder & CEO of WeMo Scooter. The panel discussion was moderated by Chenghan Lin, Director of Operations and Branding of SUNRISEMEDIUM.

    One of the main challenges for ESG in Taiwan is the mentality and the reluctance to take a leadership position in the trend; often preferring to follow international trends and execute pre-existing plans. One of the main tasks to overcome this challenge is to switch that mentality and encourage the organizations to take a more active role and especially to not treat ESG as a cost center. A lot of ESG efforts go beyond a single person or organization so it will be important to attract more friendly investment environments and more solution providers.

    Currently there are opportunities for startups, investors, and corporations to combine corporate innovations with ESG. Existing businesses who are aware of the importance of ESG will have a head start because it is barely a footnote for many of their competitors, or they might not realize its significance or how to achieve it. ESG as a trend is also profitable for businesses as they can further improve returns by up to 2 or 3 times. Regardless of the industry, the main key is corporate governance and support from the company's board of directors.

    As ESG becomes a marketing buzzword, businesses might exploit the trend by announcing their ESG goals but this can backfire horribly if businesses decide to go back on their commitment or simply fail to follow through which might turn into a PR or media crisis. It is important that companies that have ESG goals that the commitment and mentality go all the way from the very top of leadership to every member in the organization.

    ESG and digital transformation are among 2 of the most high-profile buzzwords today that have been used freely and gathered a lot of interest as a result of the current generation's experience and demands. For example, digital transformation can greatly increase efficiency, eliminate repetitive jobs, and help users understand every aspect of their business better. Without these capabilities, it will be very difficult to practice ESG properly as the businesses would not know what aspect to focus on, where to start their efforts, etc.

    ESG and digital transformation are connected concepts that can be the base for designing digital transformation solutions. The upcoming Industry 5.0 as well as the changes brought about by COVID shows how important it is to have a more resilient and human centric supply chain as well as how to think about it environmentally. The key to achieve this is data and transparency to make sure businesses focus on relevant and important metrics.

    Digital transformation will need a multi-pronged approach and while the process might take time to complete and even more time to generate tangible benefits, existing problems still need to be solved as soon as possible. For business innovations to achieve this goal, they will need to be combined with business model changes and leverage every possible resource such as cross-border collaborations.

    Innovations fundamentally do things differently, but hopefully with better results, higher efficiency, higher productivity, or at least provides some form of benefits. Among the roots to achieving this are variety, diversity, and differences that can provide new insights, fresh ideas, and prevent stagnation. Cross-border collaborations will allow for people and organizations of different backgrounds who face different problems and have different resources to cooperate, learn from each other, and solve the problems together.

    Businesses that aim to leverage ESG and digital transformation will be able to develop better products and develop rapport with consumers, but the recent changes and turbulence in the capital market will still affect the businesses and their stakeholders. However, it is important to understand that diving into the 2 major trends is an investment that requires commitment and if they wish to succeed in these endeavors, it is important to hold out and weather the storm. Just as there are plenty of uncertainties, there are also opportunities so businesses that continue doing what they need to do while supporting each other and the ecosystem will be able to take a leadership position in both ESG and digital transformation.

    Watch the forum video here.

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