Six months from now, world leaders will gather to evaluate whether they can make good on their promises to reduce their greenhouse gas emissions.

Following the Glasgow Climate Change Conference (COP26), the UN’s Intergovernmental Panel on Climate Change (IPCC) released a report in February, asking businesses and regulators alike to act now or limit global heating to 1.5 degrees celsius will soon be both unattainable and impossible.

While politicians delay existing ways to solve the current crisis, the situation worsens. However, from the private sector, a new tool in the armoury could revolutionise the way we conceptualise, track, and mitigate carbon emissions across the globe.

Through blockchain technology, we have an opportunity to bring integrity to the carbon markets, align incentives across industries and countries, and enable unified action.

The (unequal) race to zero

Achieving meaningful emissions reductions has been painfully slow and difficult, necessitating a significant overhaul in the energy sector. The transition to renewables is a focus for many countries but far from straightforward.

Singapore’s Energy Market Authority points out that we have “no hydro resources, our wind speeds and mean tidal range are low, and geothermal energy is not economically viable”.

While solar energy is the most viable option, as the city-state sees an average annual solar irradiance of 1,580 kWh/m2/year, it still isn’t commercially viable for widespread use.

To mitigate this, Singapore has introduced a carbon taxation scheme to target high emitters and incentivise reduction, making it the first in Southeast Asia.

This year’s budget also noted that the tax would be progressively increased to hit SG$45 per tonne by 2026 to enable Singapore to reach its net-zero target by or around 2050.

Beyond renewables, what other solutions can such economies turn to? Carbon credits, of course. That being said, carbon credits are far from perfect, with criticisms arising around their viability and enablers for bad behaviour.

What mechanisms can be introduced to ensure their integrity while encouraging verifiably real climate action to challenge these claims?

From NFTs to NFDTs

Ask the average person on the street what a non-fungible token (NFT) is, and today, they’ll probably be able to define it. An NFT is a unique, hence non-fungible, digital certificate stored on a blockchain to produce an immutable, digital record of its ownership and provenance.

Think about how NFTs are being used in the traditional art world. NFTs can add a layer of certainty in proving the authenticity of a painting, that it belonged to a specific collector and was painted by a specific artist.

As a digital representation, this also introduces further opportunities for tokenisation, effectively enabling investors to take ownership of an asset, no matter how big or small.

Also Read: Why the Carbon tax is just a step forward and not a solution

How does this relate to carbon credits?

One type of carbon credit is Voluntary Emission Reduction (VER) which can be tied to sustainable or climate action projects and is sold on the voluntary carbon market (VCM). As of November 2021, the value of the VCM stood at US$1 billion, pointing to a growing appetite from businesses as they strengthen their ESG commitments.

By diverting capital to such initiatives, VERs can also drive greater optimisation and innovation, eventually lowering the costs of climate technologies. As you can imagine, an NFT tied to a VER would effectively assure a buyer or an investor that their VER is tied to a legitimate project.

At the same time, tokenisation could make investing in these projects much more accessible for even a retail audience interested in green finance opportunities.

However, as a technology, NFTs are fundamentally limited critically: They’re dead.

NFTs can only represent “non-living” assets. Let’s take the example of a building equipped with smart technologies to ensure its energy efficiency.

Throughout a given day, the amount of electricity that the building expends may differ depending on the internal temperature, the intensity of sunlight, and foot traffic. These can impact the amount of energy and, thus, carbon that a building has expended.

For a business, having a real-time, continuously updated representation of such an asset is critical to measuring its energy expenditure over time. Therefore, when used to represent the carbon credits produced by green projects (which are ever-changing over time), NFTs fall short.

Hence, we at Metaverse Green Exchange had to develop a patent-pending technology known as the Non-Fungible Digital Twin (NFDT). NFDTs combines the transparency, provenance, and auditability allowed for by NFTs with digital twin technologies.

Supported by the Internet of Things (IoT) sensors, a digital twin is a virtual model that reflects a real-world physical object or process and changes within that system over time. When combined with NFTs, you can see how this addresses key challenges in today’s voluntary carbon credit market.

Why carbon has a ‘nationality’

When the Paris Agreement came into force in 2016, Nationally-Determined Contributions (NDCs) were at the cornerstone of the accord. Each signatory pledged to reduce its national carbon footprint to limit global warming to preferably 1.5 degrees Celsius compared to pre-industrial levels.

This emphasis on nationality effectively makes it such that the carbon liability belongs to the country it originated. Countries are faced with a dilemma: open up their sustainable projects and, by extension, the corresponding carbon credits, to foreign or external investors, or create barriers to protect accurate reporting and reduce the threat of double-counting?

When taken in aggregate, what MVGX offers is its Green Earth MetaVerse. This digital world holds digital representations of carbon assets and liabilities, effectively bridging the real world to the metaverse.

Backed by its proprietary, patent-pending NFDT^TM technology, each digital representation comes in the form of our Carbon Neutrality Token (CNT^TM), which is then listed on our digital asset exchange.

Through MVGX’s licence from the Monetary Authority of Singapore (MAS), these digital assets have integrity both in the metaverse and within existing carbon markets. These tokens are thus asset-backed securities regulated by MAS, which institutional and accredited investors can buy into.

Each CNT^TM is tied to an avatar backed by our NFDT^TM technology which assures the provenance, traceability, and quality of the associated VER.

In taking this approach, our carbon registry is designed first to represent the real-world carbon assets in the metaverse, as an NFDT or avatar, before the carbon credit or the VER is even issued. By listing this token on our licenced exchange, buyers are assured that the integrity of the asset is safeguarded, all the while being backed by a regulated entity.

Also Read: What COVID-19 taught us about sustainable choices and climate change

In the end, what you have is a system that bridges real-world carbon exchanges with virtual ones, and MVGX can ensure that businesses and governments ultimately gain a robust and universal understanding of how carbon is being emitted and mitigated in a transparent, verifiable way.

Making greener gains

Last year, Asia was the fastest-growing market for ESG debt issuance, tripling to US$346.5 billion compared to the year before.

Climate-aligned investing is growing in popularity. After all, the financial risks are significantly more pronounced in a region set to bear the brunt of a worsening climate. With this in mind, having the right technologies to ensure the integrity of such investments is key.

As the race to reach net-zero intensifies, traditional financial players have a key role in levelling the financial playing field for projects striving to do good.

With NFTs and blockchain now so firmly entrenched in mainstream consciousness, it’s clear that the technologies to enable meaningful, verifiable climate action at scale are already here. We all need to take the first step.

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Protecting and restoring biodiversity is the greatest challenge of our lifetimes. And it represents an incredible opportunity globally, including in Southeast Asia.

However, biodiversity receives little attention or funding.

A Singapore-based family office is on a mission to protect and restore biodiversity, starting with Southeast Asia. It has launched a biodiversity accelerator to support startups tackling the crisis. And the service is pro bono.

Also Read: ‘We hope to see more material science, heavy industry firms coming out of SEA to address climate change’

“Society has made big strides towards a ‘net-zero’ mindset, but we would love to see us collectively take one step further towards a nature-positive one,” said Kelvin Chiu, Founder and Principal at Silverstrand Capital. Biodiversity is a more holistic indicator of well-functioning ecosystems, whereas using carbon as a particular sustainability metric may not reflect nature’s inherent and inspiring complexity.”

The Biodiversity Accelerator+, launched late last month, is a three-month online programme. It consists of extensive group sessions and discussions with its core coaches, tailored one-on-one coaching, and fireside chats with entrepreneurs and industry experts — all offered for no fee or equity.

The accelerator aims to support businesses with market-based solutions in conservation and restoration, or what it calls “biodiversity-positive” companies.

They are:

• Regenerative agriculture/aquaculture opportunities across the value chain: Examples include companies selling sustainable agri-inputs (biodiverse seeds, seaweed-based bio fertilisers) or value-added products (food, textiles, cosmetics, medicine) from unconventional crops
• Ecosystem restoration technologies for forests, mangroves, and coral reefs: Examples include seed planting drones and reef tiles (software management systems for managing the cash flows of forest restoration against the success of replanting efforts)
• Measurement technologies for biodiversity or ecosystem health: Environmental DNA, acoustic- or hyperspectral-based IoT sensors, or remote sensing algorithms.
• Sustainable travel-related companies (eco-lodge operators or travel booking platforms)
• Enforcement technologies for conservation areas (technologies that can detect illegal logging or forest fires in real-time).

The Biodiversity Accelerator+ targets eight companies for the first cohort. Preference will be given to companies based/with operations in Southeast Asia or interested in expanding to the region. “Southeast Asia is a biocultural hotspot with an enormous variety of beautiful, natural habitats. I feel it is our duty and responsibility to protect what is left and restore what was once there,” he said.

At the end of the programme, participants can unlock investments of up to US$250,000 each and access a vast network of impact investors.

“We want to build the stack of ‘biodiversity-positive’ investible opportunities for ourselves and other investors. We have met with many passionate and talented entrepreneurs who we feel could benefit from a holistic and comprehensive programme covering their businesses’ financial, social, and environmental aspects. We want to help these founders upskill and help their early-stage companies become more investment-ready,” he elaborated.

Also Read: 5 reasons why impact investing is becoming mainstream investing

The partners of Biodiversity Accelerator+ are Temasek Foundation, the Monetary Authority of Singapore (MAS), Mandai Nature, UBS Optimus Foundation, Conservation International Ventures, Wavemaker Impact, REAPRA, NUS Centre for Nature-based Climate Solutions, the Meloy Fund, Be The Earth Foundation, Systemiq, Beanstalk, Cell VC, Shook Lin & Bok, and Kindrik Partners.

These partners will help the accelerator with shortlisting and selecting the companies, leading group sessions, and being mentors to the founders of companies. They would potentially be co-investing with Silverstrand at the end.

The selection of finalists will be conducted jointly by the Silverstrand investment committee and the external experts on its shortlisting committee, including Kavita Prakash-Mani, CEO of Mandai Nature, and Peter Kennedy, Partner at the Meloy Fund.

Silverstrand has a network of experienced coaches and speakers from different backgrounds to help the startups with traditional accelerator aspects (fundraising, financial modelling and branding) and impact aspects (understanding the science of biodiversity and how to work with local communities).

“We want our participating companies to use the knowledge gained to guide better their business and financial planning and their approach to the ecosystems and communities in which they operate. Ultimately, we want our companies to achieve a ‘triple bottom line’ of financial, social and environmental returns,” Chiu remarked.

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Beyond the COVID-19 pandemic, there is a seemingly simple but consequential health problem that our community is dealing with –that can actually be prevented with a simple diet or lifestyle change. However, there is not enough attention given to these issues, according to OSbiome Co-Founder & CEO Ian Chong.

“Every year, about 25 million people die globally due to chronic conditions that are preventable with simple diet or lifestyle changes. That’s every year. For context, COVID-19 amounted to about six million deaths cumulative. Why aren’t we handling lifestyle-related deaths with the same urgency?” he asks in an email interview with e27.

Through his interaction with customers at OSbiome and his previous company, Chong discovered that this abandonment seems to be fuelled by two reasons.

“We have a conflicted relationship between having good health and money. Health often comes with a higher price tag with salads being more expensive than fast food, or requires sacrifice for us to be more ‘successful’ by working overtime [and implementing] the #hustlelife, sacrificing sleep,” he says.

In addition to that, he adds that customers are “overloaded with overly generic information of what is healthy” by chasing the next superfood or getting on the next hyped fitness class.

This is why OSbiome provides customers with bespoke lifestyle and diet recommendations generated from highly complex algorithms, into a form of fun, gamified & bite-sized ‘quests’ that they can easily integrate into their daily lives. These tasks are generated by normalising data points from thousands of peer-reviewed clinical trials, layering them with localised population references and making them highly personalised.

The company’s solution included the provision of a gut health test kit that helps customers easily learn about the diet and lifestyle changes that they need to perform. With this, OSbiome aims to create a five per cent impact globally and complete a mission to help save 1.5 million lives every year.

Also Read: A beginner’s guide into the world of NFTs

“Since we started, we have been able to acquire our initial group of customers who have been amazing in helping us shape the product and our bio-AI. Through machine learning, discovered proprietary bio-signatures within the local population on what a healthy profile is as a benchmark,” Chong says.

It has also achieved other milestones such as building out and upgrading its application to allow customers to track a wide myriad of wellness activities such as sleep and water intake. But one of the most exciting milestones that the company is achieving is its foray into the Web3 space.

Introducing health-to-earn

In discovering how the addition of Web3 elements in their service can make a difference, OSbiome learns that its value lies within its ability to encourage users through rewards. For Chong, this means they can finally re-align the direction of health and money –the challenge that he has mentioned as the background of the problem that OSbiome is trying to solve.

“Web3 is the perfect platform for bringing our vision to fruition. The ability to reward the members within the ecosystem for participating will finally re-align the directions of health and money. Users can now be rewarded for completing tasks such as recording their habits and completing their health quests,” he says.

“Tangible incentives are now completely aligned with their health and wellness [goals]. The healthier you are, the more incentives you can receive. We firmly believe that this dynamic will complete reimagine our relationship with health and bring adoption of our platform into hypergrowth. Other recent projects similar to our health-to-earn model had shown real potential in impacting positive change in people’s lifestyles.”

OSbiome launches its first 3D NFT collection Ome | Pioneer Generation in May, made of 8,888 unique Omes. The characters will have “cute traits that are hand-sculpted” by up-and-coming Singaporean 3D artist @ningthebun.

“The purpose of this collection is to gather like-minded people within the ecosystem who believe in our vision and would want to help us actualise it. We’re mainly getting exposure through grassroots thought leaders in the blockchain space, influencers and communities for now and the interest has been really positive. What’s unique about this collection is that the utility is deep. Owners of these Omes can unlock special earning rates for completing quests, rent them to other players, receive future airdrops for tokens and be the first to access the newest features,” Chong elaborates.

Also Read: Matrixport betting big on NFTs, blockchain gaming to expand its cryptocurrency financial services

Towards the future

The story of OSbiome began when Chong and Dr Corlianò met in the venture accelerator programme Entrepreneur First. The co-founders had very different backgrounds that seemed to complement well with their work at OSbiome.

“Maria left academia in the pursuit of utilising her award-winning expertise in the field of gut microbiology on creating solutions to help people. I had recently exited a real foods e-commerce business jumping overnight from baking in a kitchen to building our bio-AI,” Chong explains.

“We met other potential partners during the programme, but instantly knew we needed to start something together when we realised our vision for the future is eerily similar –a world where health is personalised and accessible to all. Since then, we’ve progressed from running the company from her apartment to now our office with a rockstar team who are deeply passionate about their craft and invested in our vision as well,” he continues.

The company is currently run by a remote team of 10 people that are based in SEA, Europe, and India. It has also raised pre-seed funding from different institutions and angel investors alike.

“We have been very fortunate to have received the trust from both institutions such as Entrepreneur First and Next Humanity Ventures and angel investors alike. Fun fact, our angels were our customers as well!” Chong says.

With the support of its team and investors, OSbiome is ready to run the next parts of its plan. In addition to running its Ome NFT projects and bringing its health-to-earn model to life, it is also looking forward to partnering with national healthcare initiatives in the region to promote healthy living and chronic illness prevention.

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Image Credit: OSbiome

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Fintech innovations have developed significantly in Southeast Asia, allowing for the enhancement of Web3 to dawn upon the adaptable region. And these days, the hype on this side of the world is not about surfing the internet but about creating content and monetising it.

Web3 is the next phase of the internet, which is more decentralised through artificial intelligence, blockchain, smart contracts, metaverse and machine learning technology. With decentralisation being the word of the decade and Southeast Asia being a resilient nation, it is no wonder that the latest web sensation is accelerating in the region.

With many being put under ‘unbanked’ within the conventional financial system and many not on board yet with modern-day finance innovations, Southeast Asia still proves to be a large niche market for innovations, with an average of 440 million total online population.

As a whole, it boasts one of the youngest, most digitally active cohorts globally. Moreover, Southeast Asia’s internet economy is to peak at US$1 trillion by 2030 as the region witnessed an additional 60 million new users at the beginning of the pandemic.

Southeast Asia embraces Web3

Governments in the region and globally have acknowledged this growth and are supporting the digitisation of economies by means of monetary support, servicing and simplifying traditional processes.

For example, the ICA in Singapore has announced the issuing of digital birth certificates as part of their ongoing efforts to streamline and digitalise services for Singaporeans.

Also Read: These 21 Web3 startups prove why Vietnam is the world’s most surprising crypto hotspot

Opportunities such as this will continue to speak for themselves in the region as Web3 was built with the promise of offering users utility, value and empowerment, and we’ve already seen this play out in Southeast Asia. 

New economies and structures have been created in the region through the deployment of Web3. Play-to-earn games, for instance, have boomed in the Philippines and have helped keep many afloat during the pandemic.

Play-to-earn is a business model that works on blockchain technology, allowing players to play and earn cryptocurrency. Axie Infinity, one such game in the Philippines, followed this concept of allowing players to earn non-fungible tokens (NFTs), which bridged the financial inclusion gap in the country, mainly during the pandemic. 

Similarly, cryptocurrency has opened doors to financial inclusion in Indonesia, with seven million users in the country and 21 million across the region. We’ve seen how cryptocurrency has helped address common financial challenges such as the inability to reach far-flung areas, the lack of access to secure financial services, and the high cost of digital transactions.

Governments are taking crypto seriously and are working to find a balance in regulating these for a Web3 Future. Also monitored by the Commodity Futures Trading Regulatory Agency (CFTC) under the Ministry of Commerce of Indonesia, CFTC plans to present a crypto exchange to encourage a better ecosystem.

Jerry Sambuaga, Vice Minister of Commerce, stated that “The potential of crypto assets as a commodity is huge given a large amount of trade value. There will be changes in the behaviour of investors and traders in the near future, especially among young people who are starting to see crypto as a promising new space.”

Southeast Asia is also home to the highest NFT adopters globally, with many Asian artists gaining popularity and embracing the freedom to create through Web3. Compared to digital artwork, artists find blockchain a more convenient way of creating, selling and distributing NFTs.

There is no need for special treatment to store their artwork, and digital storage helps mitigate the problems that come with physical storage spaces. The use of blockchain technology has also helped artists reclaim ownership of their work.

The big challenge for Web3

Despite the many use cases discussed above, it is still early days for Web3 in the region. Experts often cite hype as a reason for Web3’s growing success. This advancement also requires investing in new technologies and infrastructure, something companies in less developed countries in the region may struggle with.

Also Read: Meet the 22 Web3 investors that are ready to rock the future with your startup

Without funding, companies won’t be able to take their technologies to the next level – they won’t be able to grow their business, hire the right talent, and expand into new markets. If these factors are not considered in great detail, Web3 will see short-term growth and remain ‘a fad’ as experts say.

Funding to us was one of the biggest hindrances in the continuous growth of Southeast Asia’s Web3 space. This is why as the domain expert, we teamed up with Finch Asia and Indogen Capital to launch the Cydonia Fund.

The fund focuses solely on emerging Southeast Asia Web3 projects in their pre-seed and series B stage. Through the fund, we hope to discover new and emerging technologies and support the development of more innovative and disruptive Web3 focused projects and companies in Southeast Asia.

Thriving in a Web3 future

To ensure that Web3’s bright future remains long-term, it is essential to strengthen and internalise university students, communities and enthusiasts with the knowledge of Web3.

As the next generation to nurture and optimise Web3 adoption, initiating a public-private partnership between universities and the blockchain industry for us is key.

Identify your resources and reach out to the right people for Web3 startups looking to make a name for yourselves in Southeast Asia.

Seeking out the right funding and partnering with the right organisations is also crucial in setting up your business for success. 

Networking with experts is another great tool to abide by to enhance your industry knowledge and build a strong community. Not only will they advocate for your products and services, but they will also provide you with a 360 feedback approach to thrive in the business landscape.

While it’s still early days for Web3, we’ve seen the power its technologies hold, and we’re excited to see the change it’ll bring about in Southeast Asia.

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Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic.

Join our e27 Telegram group, FB community, or like the e27 Facebook page

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Eurazeo, a leading global investment company based in Paris, has launched a EUR 200 million (US$213 million) insurtech fund as it expands its presence in Southeast Asia.

The VC firm has named Albert Shyy as Managing Director (Venture), who will lead the fund from its Singapore office. Shyy previously held various key roles at Burda Principal, STRIVE (formerly GREE Ventures), and Lazada Group.

In Southeast Asia, Eurazeo invests in Series B and Series C stage companies. It recently led a US$65 million Series B round of Qoala.

The VC fund also has offices in New York, London, Frankfurt, Berlin, Milan, Madrid, Luxembourg, Shanghai, Seoul, and Sao Paulo.

e27 had a quick chat with Shyy about the VC fund’s plans in Southeast Asia.

Excerpts:

Why did Eurazeo decide to expand to Southeast Asia, although the EU region presents excellent opportunities and remains largely untapped?

Eurazeo has a long track record across Europe and will continue to invest in that market across multiple stages and asset classes.

However, the firm is also seeking to internationalise, particularly in the US and Asia, to double AUM to US$60 billion in the next five to seven years.

Southeast Asia has seen tremendous growth over the past few years, and we are excited to look for more investment opportunities in this region as the market expands.

There are already a few investors focusing on the insurtech vertical in the region. Why does it need another fund? What opportunities does it present to Eurazeo?

I think we can complement many of the existing funds that are active in this sector, which tend to be more focused on the earlier stages. We see more insurtech companies in this region grow beyond Series A, which feeds into our target as growth investors.

It can also bring broader access to international markets from having our base in Europe and potentially additional pools of capital from within the Eurazeo platform down the road.

Also Read: Why Asia’s insurance industry is poised for collaborative disruption

Also, this fund will have a greater focus on the insurance sector than most funds, which tend to have broader mandates. It will also let us build deeper connections within the industry, including our Limited Partner, a global insurer interested in this region.

I believe there will undoubtedly be opportunities for more commercial or strategic partnerships with industry players through this fund.

Can you share more details about the fund — the philosophy, number of investments planned, the average ticket size, etc. Have you identified any startups for investments yet?

We are looking at growth stage opportunities (Series B and C), with a typical cheque size of US$10-20 million+. We have the flexibility to lead or co-invest. We have made the first investment into Qoala, where we led its Series B round.

Does the regional fund plan to invest in startups across APAC or SEA?

The fund can invest across APAC, but the primary focus is on SEA. Ideally, about two-thirds of the investments would be made in this region

How is the overall insurtech industry growing in SEA? Where is it headed?

While the sector is already sizeable (over US$100 billion gross written premium), insurance penetration rates are still low across most of this region, especially Indonesia, the Philippines, and Vietnam (less than 3 per cent in each market, as per a report by BCG and ZA Tech last year).

At the same time, we are seeing digitalisation accelerate growth/adoption as in many industries (more data to inform risk/pricing/product creation, ability to access more consumers faster and more efficiently, including within more rural areas, etc.). The latest Temasek-Google-Bain report predicts the digital insurance market to reach US$9 billion by 2025 from US$3 billion currently, so we see rapid market expansion in the digital/tech segment as well.

There are multiple insurtech models in the region. Do you see a bright future for any models here? Why?

It’s a bit early for me to say as I would like to dig deeper into each segment. However, since penetration and awareness are still so low in most markets here, I think products that can build awareness/trial (such as micro-insurance) or those make the whole customer journey much easier (D2C, agents, embedded models) can make a significant impact.

Do you foresee potential applications for crypto/blockchain/web3 in the insurtech vertical?

It is tricky because of the high volatility and limited oversight/regulation. But I think the demand is certainly there, and companies will figure out smarter ways to price and cover risk in this space.

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