Global markets absorbed a sharp technology sell-off that began in the US session, triggered by what traders now call a Nvidia hangover. The artificial intelligence leader’s latest earnings, while technically in line with forecasts, failed to feed the market’s insatiable appetite for perfection.

Investors reacted by rotating capital out of high-flying tech names and into more cyclical sectors like financials, a move that left the Nasdaq and S&P 500 in the red while the Dow Jones Industrial Average eked out a nominal gain. This session underscores a fragile truth. When expectations run too far ahead of reality, even solid results can spark a retreat.

The numbers tell a clear story. The Nasdaq Composite fell 1.18 per cent to 22,878.38, with technology and communication services bearing the brunt of the selling. The S&P 500 dropped 0.54 per cent to 6,908.86, pulled lower by a 5.5 per cent slump in Nvidia, its worst single-day performance since April 2025.

Meanwhile, the Dow Jones Industrial Average inched up 0.03 per cent to 49,499.20, supported by gains in major banks such as JPMorgan Chase and Bank of America. The Philadelphia Semiconductor Index dropped 3.2 per cent, threatening an impressive 11-week winning streak. This rotation reveals how tightly markets now tie AI enthusiasm to semiconductor valuations, and how quickly sentiment can shift when growth narratives face even minor scrutiny.

Broader macro signals added to the cautious tone. The 10-year US Treasury yield fell to 4.01 per cent, with analysts noting a bull flattening of the yield curve that often signals concerns about moderating global growth. At the same time, spot gold rose to approximately US$5,193.20 per ounce, an increase of over US$21 from the previous session, as investors weighed geopolitical progress in US-Iran nuclear talks. These moves suggest capital is seeking both safety and optionality, a pattern that typically emerges when equity momentum stalls and uncertainty about the growth path intensifies.

Also Read: Why Bitcoin dropped to US$64,100: Trump tariffs, US$2.6B ETF outflows, and extreme fear grip crypto

Asian markets reflected the risk-off mood at the open. The Nikkei 225 dropped 0.25 per cent, and South Korea’s Kospi fell 1.74 per cent. Yet despite the daily dip, Asian stocks remain on track for their best February on record, with the MSCI Asia Pacific Index up 6.3 per cent for the month. In Singapore, the STI opened down 0.19 per cent at 4,954.87, but the local market has seen a strong recovery overall in 2026, with the STI rising 22.7 per cent year to date.

Corporate news added another layer. Block Inc shares surged over 20 per cent in after-hours trading following a surprise announcement of plans to cut 4,000 roles, nearly half its workforce, in a strategic pivot toward AI. This stark move highlights how companies are reshaping their cost structures to chase the next wave of technological investment, even at high human cost.

The crypto market mirrored this macro-driven risk-off move, falling 1.22 per cent to US$2.32T in 24 hours. Critically, the 24-hour correlation with the S&P 500 stood at 89 per cent, a level that leaves little room for the decoupling narrative some enthusiasts still promote. This tight linkage shows crypto now behaves as a high-beta risk asset, moving in lockstep with traditional equity sentiment and liquidity expectations.

For those who view speculative financial activities as forms of gambling with better odds, this correlation is not surprising but rather a confirmation that crypto’s price discovery remains deeply embedded in the broader financial system’s risk appetite.

Under the surface, crypto-specific dynamics amplified the move. The Fear and Greed Index held at Extreme Fear with a reading of 16, reflecting deep-seated caution among participants. Simultaneously, total derivatives open interest fell 6.83 per cent in 24 hours, signalling a rapid deleveraging of speculative positions.

When traders exit leveraged bets amid uncertainty, downward pressure intensifies, creating feedback loops that can overshoot fundamental values. This environment rewards those who monitor liquidity signals and derivatives flows more closely than headline narratives, a practice aligned with a disciplined, independent approach to market analysis.

Also Read: 5 crypto events that will make or break 2026: What investors must know before April

From a technical perspective, the market now tests the US$2.32T level, which aligns with the 78.6 per cent Fibonacci retracement. The next major support sits at the yearly low of US$2.17T. A break below that level could trigger a test of the 200-day moving average near US$3.05T, while a rebound above US$2.44T, the 38.2 per cent retracement, would suggest the selloff is losing momentum.

Resistance also builds at the 50 per cent retracement near US$2.52T. Yet these traditional technical tools must be applied with caution. Decentralised crypto systems do not conform to legacy regulatory tests like the Howey test, and their valuation frameworks must evolve beyond equity-market analogies to account for network effects, token utility, and on-chain activity.

This moment reveals the tension between AI-driven hype cycles and the underlying mechanics of market structure. When a single company’s earnings can ripple across equities, bonds, commodities, and crypto, it signals both the centrality of technology to modern growth narratives and the fragility of sentiment-driven valuations.

Independent analysis becomes essential here. Rather than chasing the latest headline, investors benefit from watching liquidity indicators, derivatives positioning, and cross-asset correlations. These metrics offer clearer signals about where capital truly flows when fear replaces greed, and they help separate structural shifts from temporary noise.

In conclusion, the near-term path for crypto likely hinges on whether the US$2.17T support holds. If it does, a relief bounce toward US$2.44T remains possible as short-term oversold conditions ease. If it breaks, the test of the 200-day moving average near US$3.05T could invite deeper recalibration.

For traditional markets, the question is whether AI expectations can stabilise without further violent repricing. The bull flattening in yields, the rotation into financials, and the sharp move in gold all point to a market searching for a new equilibrium. In this environment, those who combine technical awareness with a critical view of narrative-driven investing will be best positioned to navigate the next phase.

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Deliveroo’s exit from Singapore is less a corporate retreat than a referendum on the arithmetic of food delivery. In this candid conversation, WhyQ co-founders Varun Saraf and Rishabh Singhvi strip the model down to its uncomfortable basics: on a typical SGD20 order, platforms collect roughly 25-30% in commission — about SGD7 to SGD9 — which is often entirely consumed by last-mile delivery costs alone. Before marketing, technology, customer support, or overhead are factored in, the margin is effectively gone.

The deeper issue, they argue, is behavioural. In Southeast Asia, delivery is treated as a utility, not a luxury. Consumers resist absorbing the true cost of logistics, while merchants cannot sustain higher commissions. That leaves platforms trapped in a zero-sum game, subsidising demand in pursuit of scale.

WhyQ’s response was not incremental optimisation but structural change. After experimenting with hawker-focused B2C delivery, the company pivoted in 2023 toward corporate B2B — scheduled, high-volume drops where batching improves economics and food safety becomes institutional infrastructure rather than an afterthought.

If 2026 is indeed the EBITDA reckoning for the sector, WhyQ’s thesis is clear: survival will depend less on branding and more on disciplined unit economics, operational control, and predictable demand.

REGIONAL

Deliveroo’s exit is a profitability warning shot: Deliveroo will exit Singapore by March 2026 as DoorDash retrenches across four markets, signalling Southeast Asia’s shift from growth-first expansion to profitability discipline amid punishing delivery economics and fragile margins.

Malaysia’s Zetrix AI raises US$40M from IFC, to list AI unit on Nasdaq: The funding aims to support the expansion of digital infra in Malaysia, Southeast Asia, and other emerging markets. The company’s projects include supporting Malaysia’s national digital identity system and blockchain service network.

Grab expects AI, new services to triple profit by 2028: The ride-hailing and delivery firm aims to triple its EBITDA to US$1.5B by 2028 from last year’s level. It plans to grow revenue by over 20% annually for the next three years. It has taken toeholds outside Southeast Asia, including an investment in US wealth platform Stash.

SG fintech startup Lyte raises US$4.2M: US$3.9M was contributed by Soilbuild Group’s Lim Chap Huat. The remaining amount came from Ho Hin Wah, CIO of Genedant Capital, and Great Noble International II Limited. Lyte offers financial tools aimed at freelancers, solopreneurs, and sales workers.

Singapore Quantum Hub launches with SoftBank and HorizonX backing, led by QAI Ventures: Quantum Hub will accelerate QuantumAI commercialisation, linking capital, talent and industry clusters across communications, finance, manufacturing and life sciences.

Veremark acquires RMI to double down on Southeast Asia’s trust economy: The UK firm aims to deepen APAC background screening, strengthening institutional ties and compliance capabilities as cross-border hiring rises and workplace trust becomes a competitive differentiator.

Singapore’s UltraGreen.ai posts 24% revenue rise in FY2025: The surgical imaging firm’s revenue rose to US$142.4M, driven by a 13% increase in vial volumes and higher prices, especially in the US and Europe. The gross margin stayed at 85%, with operating profit rising to US$84.2M.

Ant, CIMB partner on cross-border payments in Malaysia: It involves collaboration across Ant’s key businesses, including Alipay+, Antom, and Bettr Treasury, spanning cash management, treasury and markets solutions, credit and financing facilities, capital markets activities, and sustainability-related initiatives.

RedDoorz adds 100 ‘company-operated’ hotels in Indonesia: The hospitality platform plans for another 100 to 150 by 2027. It currently manages about 100 such properties and operates 4,300 partner properties across Indonesia and the Philippines.

FEATURES & INTERVIEWS

Premium isn’t a moat: What Deliveroo’s exit says about Southeast Asia’s delivery ceiling: WhyQ’s founders dissect Deliveroo’s Singapore exit, exposing broken B2C delivery economics and arguing sustainable growth lies in batching, higher order values, and disciplined corporate B2B infrastructure.

Space Faculty CEO Lynette Tan: Talent, not rockets, will define Singapore’s space play: Human capital is the island’s most enduring asset in space development. While technologies evolve, talent is key to navigating space challenges. Successful missions should be measured by their impact on uplifting and empowering people and talent in both the short and long term.

INTERNATIONAL

Thrive Capital reportedly invests US$1B in OpenAI: This deal was separate from a larger funding round that could total over US$100B and boost OpenAI’s valuation to US$800B. Thrive has been a long-term investor in OpenAI and is likely to join the ongoing funding round, which is closing in phases.

Jack Dorsey’s Block to cut nearly half staff citing AI impact: Dorsey wrote that AI tools are enabling a new way of working with smaller teams. The company, which owns Square, Cash App, and Tidal, has had multiple layoffs since 2024, but this is the first time it cited AI as a reason.

Coupang swings to loss as data breach weighs on Q4 results: Revenue for Q4 was US$8.8B, below the US$8.9B forecast from LSEG, and the company swung to a US$26M loss from a profit a year earlier. Active customers in Coupang’s product commerce segment rose 8% YoY to 24.6M in Q4 but fell from 24.7M the prior quarter.

Netflix pulls out of Warner Bros acquisition bid: Netflix has decided not to increase its US$82.7B all-cash bid for Warner Bros, ending its pursuit of the company. Warner Bros said Paramount made a US$31% offer, which it called a “superior proposal.”

Hong Kong to issue first stablecoin licenses in March: The government has established a licensing regime for stablecoin issuers, with regulators expected to approve initial licenses for fiat-backed stablecoins next month. It also intends to introduce legislation this year to regulate digital asset dealers and custodians.

200,000 Taiwanese accounts affected in Coupang data breach: The company commissioned external cybersecurity firms to investigate the incident, which occurred in November 2025. Coupang attributed the breach to a former employee, stating that the individual accessed the accounts without authorisation.

CYBERSECURITY

Cybersecurity is becoming the trust layer that underpins SEA’s digital economy in 2026: As Southeast Asia’s digital payments surge toward US$789 billion, cybersecurity and governance are emerging as core infrastructure, embedding trust into scalable, enterprise-ready digital ecosystems.

The trust layer: How cybersecurity became hospitality’s most valuable asset: RedDoorz argues cybersecurity is hospitality’s new trust layer, using AI responsibly, strict data controls, and security-by-design to protect guests, combat AI-driven threats, and turn safety into a competitive growth advantage.

AI as a question of national security and independence: AI security is shifting from sci-fi fears to sovereignty concerns, as Southeast Asia weighs dependence on dominant platforms against resilience, independence, and control over critical digital infrastructure and assets.

SEMICONDUCTOR

Singtel launches CoE for Applied AI with NVIDIA to accelerate enterprise adoption: Singtel and NVIDIA launch an Applied AI Centre of Excellence to accelerate enterprise deployment, combining sovereign cloud, advanced GPUs, ecosystem partners and talent development to move organisations from pilots to production securely.

Meta reportedly to lease Google AI chips in multibillion-dollar deal: The chips would be used to develop new AI models amid increased industry investment in AI infra. In December, Google reportedly pushed its Tensor Processing Units as an alternative to Nvidia’s GPUs, with TPU sales becoming a key driver of its cloud revenue.

Nvidia shares rise after Q4 revenue beats estimates: Its stock rose about 1.3% in pre-market trading on February 26 after reporting fiscal Q4 revenue of US$68.1B, surpassing analyst estimates of US$66.2B from LSEG, with a 73% YoY increase. Its data centre unit, which accounted for 91% of sales, generated US$62.3B.

AI

Responsible AI won’t scale on good intentions alone: Southeast Asia aims to scale AI responsibly through ASEAN’s voluntary governance model, but fragmented regulations, cross-border data barriers, and inclusion gaps will determine whether regional coordination delivers true, interoperable scale.

AI is now a budget line. It’s still not a profit line: Southeast Asian firms are heavily investing in AI, yet most see minimal EBIT impact, as talent gaps, integration hurdles and weak data foundations stall value capture despite rising budgets.

Everyone wants AI agents, but few have the plumbing: Nearly nine in ten Southeast Asian firms plan AI agents in 2026, but scaling remains technical, governance gaps persist, and weak operational foundations risk turning productivity ambitions into costly chaos.

Why trust is the only currency that matters in the AI era: As AI accelerates innovation, trust becomes the real growth metric. Cybersecurity, embedded by design, now determines enterprise adoption, resilience and competitive advantage in a high-speed digital economy.

Key to AI financial assistance: Removing friction: AI Financial Assistance removes friction in money decisions by delivering trusted insights, clear education, and seamless in-app guidance, empowering Southeast Asia’s mobile-first investors to act confidently and build long-term financial literacy.

The unspoken contract: Why AI can’t win our hearts until it earns our trust: Southeast Asia’s AI race is shifting from speed and convenience to trust, as startups prioritise transparency, localisation and human oversight to build culturally grounded, trustworthy systems beyond mere technical reliability.

THOUGHT LEADERSHIP

Bitcoin short squeeze wipes out US$400M in 24 hours: What comes next: Bitcoin’s rebound sparked a US$400M short squeeze, driven by crowded bearish positioning and thin liquidity, resetting leverage as traders eye resistance near US$70K and upcoming options expiry.

Architecting cyber defence: Transforming the global talent deficit into a strategic business advantage: Cybersecurity talent shortages threaten business resilience and shareholder value, demanding strategic investment, modern training, regional collaboration, and adaptive workforce development to secure long-term digital competitiveness.

Why most tokenised real estate startups in SEA fail: Tokenised real estate in Southeast Asia is faltering due to opaque listings, overpriced assets, weak governance, illiquidity, and regulatory uncertainty, undermining investor trust and long-term viability.

Fortitude for hire: Botticelli, history’s first Fractional Executive: Using Renaissance Florence as allegory, the article argues corporations hire fractional executives as high-impact specialists during crises, blending reliable core teams with visionary talent to deliver strategic resilience.

Small habits, big wins: Why reduction beats intensity in the AI era: Founders mistake inconsistency for weak discipline, but the real constraint is structural friction. AI compresses cognitive workflows, reducing switching costs and turning small idea-capture habits into compounding visibility and authority.

Why community building has replaced lean startup approach to lurk investors?: Community building has shifted from marketing afterthought to strategic core, driving product development, investor confidence, and smarter go-to-market execution through engaged users, real-time feedback, and authentic influencer participation.

Streaming the dream: How live streaming tech can increase access to brands: With billions of smartphone users globally and SEA’s surging internet penetration, live streaming commerce is transforming e-commerce through immediacy, interactivity, personalisation, and retention-driven digital engagement.

Elevating your e-commerce strategies with livestreaming and hero products: Mobile-first consumers are reshaping Asia Pacific e-commerce, favouring convenience, authenticity and value-driven content. Brands can win by building Hero SKUs, leveraging livestream commerce, and tailoring strategies to distinct shopper personas.

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The latest US tariff move is sending ripples through global trade flows, with Singapore’s tech ecosystem watching closely.

Under Section 122 of the Trade Act of 1974, the US has imposed a new 10 per cent global tariff effective February 24 at 12:01 AM EST, replacing earlier IEEPA tariffs ruled illegal by the Supreme Court. On February 21, President Donald Trump announced a further increase to 15 per cent for certain countries, including Singapore, the only Southeast Asian nation facing the higher rate.

In 2025, the US recorded a US$3.6 billion trade surplus with Singapore, underscoring the complexity of bilateral flows. This means the policy shift has reintroduced uncertainty for exporters and tech companies that rely on cross-border supply chains. For a highly open economy such as Singapore, the implications of the US tariff extend beyond headline rates.

Singapore’s Ministry of Trade and Industry (MTI) has said it is monitoring developments closely and engaging US counterparts to clarify issues such as refunds and implementation details. Analysts have described the overall impact as “manageable,” noting that key exports such as semiconductors and pharmaceuticals remain exempt.

Still, as a global trade and re-export hub, Singapore is inherently sensitive to abrupt policy changes.

Also Read: Nvidia stumbles, crypto shivers, markets wobble: The AI reckoning begins

“Singapore’s economy can be naturally sensitive to disruptions in global trade policy, particularly when major markets introduce sudden shifts that affect cross-border flows,” said Shafiqah Abdul Samat, Principal Advisor, Trade & Customs, KPMG in Singapore.

In an email interview with e27, she added that evolving trade rules have led companies to become more cautious about making long-term investment or routing decisions.

Yet, Singapore’s structural advantages remain intact. “Its long-standing advantages–such as reliability, governance standards, logistics expertise and its established role within broader supply networks–continue to anchor its relevance,” Abdul Samat said.

In other words, while the US tariff may alter cost calculations, it does not fundamentally weaken Singapore’s position in global value chains.

Sectoral fault lines

Within Singapore’s startup ecosystem, the impact of the US tariff will likely vary by sector.

Industries that depend on intricate supply chains or specialised production — including advanced electronics, deep-tech hardware, and life sciences — could face additional cost pressures or demand fluctuations if global trade rules become less predictable.

“The effects of global trade realignment vary across sectors,” Abdul Samat noted. “Industries that depend heavily on intricate supply chains or specialised production–such as advanced electronics and life sciences–may experience added cost pressures or varying demand conditions when global policy environments become less predictable.”

Technology-intensive manufacturing and biomedical activities may need to reassess operating models, especially where US market access is central to revenue growth. Even where semiconductor tariffs are assessed as negligible for now, the 150-day window of new measures introduces short-term flux.

Also Read: Nvidia stumbles, crypto shivers, markets wobble: The AI reckoning begins

At the same time, some sectors could benefit from supply chain re-routing or from reallocation of investment. As companies diversify production bases to manage tariff exposure, Singapore’s role in high-value coordination, R&D, and regional headquarters functions could strengthen.

What founders must now factor in

For Singaporean startups expanding into the US, the US tariffs add another layer of regulatory and cost complexity.

“Startups entering large advanced markets now face a more intricate landscape shaped by evolving regulatory, administrative, and sourcing requirements,” Abdul Samat said.

Recent developments illustrate how tariff changes can influence market entry strategies, requiring adjustments to production planning, supply origin and documentation workflows. Founders will need to anticipate potential cost increases and embed tariff exposure into their financial modelling.

A key first step, she advised, is conducting “a comprehensive tariff exposure audit to identify vulnerabilities and prioritise adjustments.”

Beyond compliance, startups should look to innovate and diversify. Leveraging Singapore’s extensive network of free trade agreements can help optimise trade routes and reduce duties. Investing in digital supply chain resilience — including real-time visibility tools and AI-driven risk analytics — will also be crucial for navigating policy volatility.

Localisation and Singapore’s evolving role

Sustained tariff regimes could accelerate localisation strategies, including reshoring and the formation of regional manufacturing clusters. Trade frictions in recent years have already prompted companies to re-examine how they structure production and decision-making across geographies.

As localisation gains momentum, Singapore’s function may evolve rather than diminish.

Also Read: The trust layer: How cybersecurity became hospitality’s most valuable asset

“As companies recalibrate their global footprints, they increasingly require hubs that offer stable governance, trusted regulatory environments and highly developed service ecosystems to coordinate regionally distributed operations,” Abdul Samat said.

Singapore’s strengths in governance, compliance, digitalisation and responsible AI adoption position it as what she described as a “critical nerve centre” in more fragmented global systems.

In that sense, the US tariff may not simply be a cost shock. It could accelerate Singapore’s transition from a pure trade conduit to a high-value innovation and command centre — one that supports transparency, resilience and operational intelligence across increasingly localised networks.

For the city-state’s tech ecosystem, adaptability will be the ultimate competitive edge.

The post How the US tariff shift could reshape Singapore’s tech ecosystem appeared first on e27.

In the fast-paced world of startups, founders are trained to think lean, move fast, and scale big. But what if we told you that embedding Environmental, Social, and Governance (ESG) principles early on could actually accelerate your growth rather than slow you down?

The outdated notion that ESG is only for large corporations with sprawling teams and big budgets is fading fast. Today’s startups operate in a world shaped by climate risk, social inequity, shifting investor expectations, and increasingly conscious consumers. ESG isn’t a distraction—it’s a strategic lever for relevance, resilience, and revenue.

Why ESG matters more than ever

Startups are uniquely positioned to lead on ESG. Free from legacy systems and rigid hierarchies, early-stage ventures have the agility to bake ESG into their core from day one. The benefits are tangible:

• Climate risk and reputational damage don’t discriminate by company size. Startups, like giants, face mounting scrutiny over their supply chains, data privacy practices, and carbon footprints.
• Investors are watching. Even at the seed stage, venture capitalists and angel investors are increasingly screening for ESG alignment. Funds are flowing toward businesses that build for long-term impact.
• Consumers are choosing values over price. Gen Z and millennial buyers want to support brands that reflect their ethics — from how a product is made to who’s behind it.
• Efficiency is ESG’s best-kept secret. Strong ESG practices often lead to leaner operations, smarter resource use, and better risk management.

Put simply, ESG isn’t a cost centre — it’s a foundation for sustainable growth.

ESG governance: Building stronger companies from the inside out

Done right, ESG governance doesn’t just protect your business — it strengthens it from within. It prompts leadership to take the long view: to weigh impact and accountability alongside profitability.

Startups that embed ESG principles early find it easier to attract capital. Many VCs now include ESG criteria in their due diligence processes. Institutional investors are already demanding ESG metrics and so are limited partners funding those VCs.

Internally, ESG fosters culture. Younger talent wants to work at companies that walk the talk. By integrating ESG into your hiring, operations, and leadership development, you build a workplace that attracts and retains top talent.

Also Read: Are Southeast Asia’s emerging economies resilient enough to resist trade uncertainty?

And ESG inspires innovation. Some of today’s most promising startups are designing new business models altogether — from circular platforms to carbon-tracking technologies and ethical AI systems.

Research backs this up. According to the World Economic Forum, companies that prioritise ESG can increase brand value by up to 30 per cent and grow revenues by up to 20 per cent. In short: ESG is a growth strategy, not a side quest.

Materiality: Focus where it matters most

One of the biggest misconceptions about ESG is that you have to tackle everything at once. The smarter move? Focus on materiality — what’s most relevant to your business model, your stakeholders, and your long-term viability.

Materiality assessments help you zoom in on the environmental and social issues that truly matter to your context. For a fintech startup, that might mean data privacy and financial inclusion. For a food delivery app, it could be emissions, food waste, or rider well-being.

Think about your stakeholders — team, customers, investors, suppliers — and how your operations affect them. What risks might arise from ignoring environmental, social, or ethical concerns? And what opportunities exist if you lean into them?

Materiality is not a one-time exercise — it’s a strategic lens. The insights you gather should shape real decisions, from product design to supply chain partnerships and branding. A focused ESG strategy is a powerful competitive advantage.

Making ESG practical for startups

Yes, you can start ESG with limited resources — and no, it doesn’t need to be complicated.

The key is to act with intention and scale your ESG practices alongside your business. Begin with a simplified framework. Resources like the Simplified ESG Disclosure Guide for SMEs (Capital Markets Malaysia) offer step-by-step pathways for early-stage companies.

Set a few measurable goals. These could include reducing packaging waste, adopting inclusive hiring practices, or introducing a supplier code of conduct. Don’t chase perfection—aim for progress.

Use simple tracking tools. A quarterly ESG dashboard can help align your team and signal to investors that you’re taking sustainability seriously. You don’t need a full-time ESG officer — just clear ownership, consistent updates, and accountability.

Build ESG into your culture. This means embedding values like equity, transparency, and impact into everything from onboarding to marketing. When everyone in your team understands the “why” behind ESG, it becomes a shared responsibility — not a siloed function.

Also Read: Cultivating an honest culture: Why leaders should be transparent

Incentivise alignment. Consider tying ESG milestones to employee rewards or OKRs. This reinforces the idea that sustainability is how you do business, not just what you say you believe in.

Technology can amplify your ESG performance. AI can optimise logistics for emissions reductions. Blockchain can ensure traceability in supply chains. Climate data APIs and energy-monitoring tools are now accessible to even micro-startups.

The role of innovation ecosystems

Startups don’t operate in a vacuum. Accelerators, incubators, VC firms, and innovation hubs play a critical role in ESG readiness. These ecosystem actors have a unique opportunity to make sustainability mainstream.

They can integrate ESG into training, mentorship, and funding criteria. They can provide founders with access to ESG experts, reporting templates, and peer learning opportunities. And they can guide startups toward purpose-aligned capital.

Globally, networks like the UN Global Compact are offering platforms where early-stage founders can build capabilities, gain visibility, and share lessons. Being part of these communities helps demystify ESG and turn it into an asset, not an obstacle.

Overcoming common challenges

Yes, startups face constraints. Budget, bandwidth, and burn rate are constant concerns. But ESG isn’t about doing everything — it’s about doing the right things, consistently.

Pick 2–3 priorities that fit your sector, market, and maturity stage. Build ESG into your growth roadmap the same way you’d build in product iteration or customer acquisition. Make use of partnerships — with universities, NGOs, accelerators, or ESG consultants — to fill expertise gaps.

And perhaps most importantly: start now. ESG maturity is a journey. The earlier you begin, the easier it becomes to scale impact alongside profit.

Also Read: ESG empowerment: Fueling Malaysia’s SMEs for a sustainable future

ESG as a launchpad for innovation

Sustainability doesn’t limit creativity — it fuels it. ESG forces entrepreneurs to ask better questions: What if our product was zero waste? What if our platform helped underserved communities? What if we could scale impact without scaling harm?

Across industries, we’re seeing startups disrupt markets through ESG-driven models. Think plant-based alternatives in food tech, clean energy in logistics, or decentralised finance for inclusion. ESG is where global problems meet entrepreneurial imagination.

Investors are paying attention. Consumers are voting with their wallets. And the next wave of unicorns will be those that solve not only for demand, but for dignity, equity, and regeneration.

Conclusion: ESG is not a sideshow, it’s the strategy

For today’s startups, ESG isn’t a marketing gimmick or a compliance burden. It’s a mindset and model for building companies that last.

The businesses that will thrive tomorrow are those that align purpose with performance, embed responsibility into their growth DNA, and lead with values that match the world’s urgent needs.

You don’t need to have it all figured out. But you do need to start — early, intentionally, and strategically.

Because in the startup world, ESG isn’t a luxury — it’s your edge.

—

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 us on Instagram, Facebook, X, LinkedIn, and our WA community to stay connected.

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The post Why investors and customers are betting on ESG-aligned startups appeared first on e27.

Last week’s Science editorial warned that “>80 per cent of voluntary carbon credits may be junk” — a claim that instantly reignited calls for tougher third-party audits.

Pinning the offset-integrity crisis on conflicted auditors, however, risks repeating an old mistake. The deeper problem is a maze of sprawling methodologies that even the sharpest audit cannot untangle—tightening the screws could simply price developing-country projects out of the market while leaving root-cause “baseline bloat” intact.

2008 déjà vu: When “clean” audits masked a crisis

Even the most reputable audit firms can miss systemic red flags. By April 2010, 73 per cent of the mortgage-backed securities Moody’s had stamped triple-A in 2006 had been downgraded to junk.

Lehman Brothers is the cautionary emblem. Ernst & Young issued an unqualified opinion on Lehman’s 2007 accounts, yet a court-appointed examiner later showed the bank used “Repo 105” manoeuvres to park roughly US$50 billion off its balance-sheet.

Polished audit reports can therefore coexist with colossal mis-measurement. Doubling down on checklist-heavy carbon audits—without fixing the rules that invite gamesmanship—risks replaying that movie in the climate market.

Also Read: How to scale voluntary carbon markets with DeFi and Web3

Methodology bloat: Too many rulebooks, too much wiggle room

Carbon markets don’t suffer from a shortage of auditors; they suffer from a proliferation of rulebooks.

• The Integrity Council has grouped 100 + methodologies into 29 categories for assessment under its Core Carbon Principles.
• Independent rater BeZero says its analysts have reviewed 70 + different methodologies across 300 projects.
• Verra’s digital-transition push added two more digitalised methodologies in June 2025, bringing the total to 20.

This sprawl invites baseline-shopping. A 2024 Nature Communications study found that uncertainty in common deforestation baselines routinely exceeds the 15 per cent margin allowed by registries, letting developers cherry-pick scenarios that maximise credits.

When every cook-stove or forestry project comes with its own bespoke spreadsheet, even an honest auditor can mis-size the carbon pie. The cure is not an army of pricier verifiers—it’s a lean, satellite-anchored set of baselines that leaves less room for creative accounting.

Tolerance bands and developing-country access

High integrity now carries a steep entry fee. Tier-1 credits sold at a 65 per cent premium to Tier-3 units in H1 2025.

Verra’s revised schedule front-loads US$5 000 in verification-review fees (US$2 500 non-refundable) and levies US$0.23 per credit on issuance, plus US$0.02 on every transfer.

Those costs bite hardest in developing countries, like Kenya’s cook-stove roll-outs, REDD+ corridors in Brazil, and peatland projects in Indonesia. An LSE Grantham report shows MRV alone can swallow 50–73 per cent of total project costs for some carbon-removal methods. Abatable’s latest field analysis finds high-quality cook-stove offsets need US$15–39 / tCO₂e just to break even—well above many spot bids for avoidance credits.

Insisting every issuer clear a “Tier-1-or-bust” bar could drain the pipeline that channels climate finance into rural cook-stoves, agro-forestry, and peatland restoration across the developing world. A calibrated tolerance band—allowing transparently disclosed, lower-rated credits within clear limits—keeps liquidity alive while the rulebook is slimmed.

Also Read: How a data-driven approach can optimise decarbonisation in the built environment

Re-Engineering oversight: Lean rules, tech MRV, smarter audits

• Slim the rulebook: When financial disclosure got unwieldy, the IASB issued IFRS 19 Subsidiaries without Public Accountability: Disclosures to cut the clutter. Carbon registries should likewise merge today’s 100-plus methodologies into a handful of satellite-anchored baselines.
• Swap clipboards for constellations: Norway’s NICFI programme now provides free 4-m monthly imagery of the entire tropical belt, making tamper-proof baselines possible at zero licensing cost. In Vietnam, an IRRI-led low-emission rice pilot couples that imagery with drone sampling to cut methane-MRV costs by roughly twenty-fold versus field surveys.
• Break the pay-to-play audit model: EU rules already force audit-firm rotation for public-interest entities after ten years. A registry-run, lottery-assigned auditor pool funded by a <1 per cent levy on issuances would sever fee ties even in the voluntary market—an approach inspired by a randomised audit experiment in India that cut mis-reporting by up to 80 per cent.

Conclusion

Carbon finance doesn’t need more paperwork; it needs simpler rules, cheaper truth-telling, and incentives that travel. The IASB’s IFRS 19 shows how lean disclosure can still satisfy investors; satellite MRV and open imagery have already slashed monitoring costs; and a lottery-funded auditor pool can end pay-to-play conflicts without waiting for a UN treaty.

What buyers and registries can do next:

• Demand lean baselines. Make satellite-anchored defaults the norm and retire duplicative methodologies. This might not work for every project, but should be used as a standard.
• Fund the auditor pool. Earmark ≤ 1 per cent of every issuance to pay independent, randomly assigned auditors.
• Keep a tolerance band. Cap mid-grade credits of any portfolio to keep liquidity flowing to developing-country projects while rules are streamlined.
• Publish open MRV data. Require registries to release geospatial layers and audit outcomes for crowd-sourced oversight.

Do this, and hopefully the voluntary carbon market can deliver both integrity and inclusion—funding cook-stoves in Kenya, peatlands in Indonesia, and mangroves in Brazil—without repeating the blind-spot audit culture that helped sink Wall Street in 2008.

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