Left to right: Robyn Tan (KrAsia), James Chan (ION Mobility), Angela Noronha (Asia Second Muse), Grace Sai (Unravel Carbon), Steve Melhuish (Wavemaker Impact)
On the second day of Echelon 2022 at Resorts World Sentosa in Singapore, October 28, Steve Melhuish, Founding Partner at Wavemaker Impact, reminded the audience how 2018 was the year when many climate change-related records were broken. From forest fires to drought, the level of destruction we saw that year was devastating, providing a wake-up call for every party.
“There is no single biggest issue here [that dominates the conversation on climate change],” he explained. “But if you think of it from an entrepreneurial point of view, there’s no single biggest opportunity either.”
This indicates that the opportunities the climate tech sector provides are limitless. However, fellow panellist Grace Sai, Co-Founder of Unravel Carbon, warned of the possible challenges that climate tech startups might face, especially when they are reaching out to potential investors.
She spoke of when her company pitched for pre-seed and seed funding rounds from top global VC firms such as Sequoia.
“We were the first climate tech platform investment for many of these funds,” she said. “That was interesting to note because part of the pitch was also to educate our investors … because they were so new to this field and formed their thesis based on what they knew before, like software and everything else. But the climate crisis was new to a lot of people.”
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The two speakers were part of a panel titled “The state of climate tech in 2022: How we can create new urgency for green recovery”. Moderated by Robyn Tan, Managing Director of KrAsia, this panel aimed to look at how startups and investors can maximise their impact as a greater awareness of climate tech grows.
On the accessibility factor of climate tech solutions
Before we get to the point of understanding how climate tech startups in Southeast Asia (SEA) can move forward in making their impact on society, we need to understand what makes a “good” climate tech startup.
According to Angela Noronha, Director of Growth at Asia Second Muse, there is no significant difference from conventional businesses.
“I don’t think there is a need to rehash the definition because … a good company is a good company. The business fundamentals are the same. It’s more about what purpose are you pointing towards. Does it help to reduce or remove emissions?” she stressed.
It is also important to note that there are functions in climate tech that do not even have to be performed by a stand-alone company; there are many data platforms and tools that enable business owners to perform these functions without having the need to work with a third party.
For climate tech startups, success in growing their business can begin by understanding the potential hurdles customers might face when accessing climate-friendly products and services.
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As in any conversation regarding accessibility, the price range was one of the top hurdles customers might face. Melhuish highlighted in his presentation how the green label often puts products and services in the luxury category. “We fundamentally disregard that. We don’t believe that is the way because how would you get adoption if you’re expecting to pay extra for it?”
This matter of pricing and accessibility is also something that Sai touched upon. She shared that fewer than 10,000 companies operating in the global market are measuring their carbon profiles. She found the number “unacceptable”, but it was also important to understand that this did not always stem from ignorance: getting your carbon emission measured can be quite costly for businesses.
This is yet another proof that price points can be a barrier to accessibility. “Because if you don’t measure it, then you can’t manage it to begin with,” she stressed.
In addition to price point, Sai also highlighted the importance of “keeping things simple” for customers.
Take the example of plastic bags, which have been widely known for their negative environmental impact. Many businesses and customers opted to replace them with tote bags. Still, it is later revealed that one needs to use them 1,500 times to replace the impact of a common plastic bag –a piece of information that might haunt and overwhelm anyone.
“I feel it’s on experts and businesses to create better alternatives that simplify these decisions for big or small companies and consumers. That’s why something like Unravel exists to take all the data and simplify and point the way for a corporation to be like, ‘Okay, these are the three things that I need to do to reduce my emissions by 60 per cent.’”
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