Strengthening impact ecosystem in Malaysia and beyond to address the Sustainable Development Goals
Media Statement
November 25, 2021 11:06 MYT
November 25, 2021 11:06 MYT
The challenge of meeting SDGs is not just about mobilizing more financial resources, rather about engaging more comprehensive resources talents, know-how, entrepreneurial acumen, and energy of people to address the 2030 Agenda.
AGAINST the backdrop of the COVID-19 pandemic and climate crisis, it is abundantly clear that there is an urgent need to accelerate progress towards the achievement of the Sustainable Development Goals (SDGs). Meanwhile, the challenge of meeting SDGs is not just about mobilizing more financial resources, rather about engaging more comprehensive resources – talents, know-how, entrepreneurial acumen, and energy of people to address the 2030 Agenda.
There is a sense that the notion of business as usual is no longer an option. The good thing is that there are possible alternative development pathways. For example, investing in a net-zero, climate-resilient and sustainable economy will create virtuous feedback loops of sustainable growth, jobs, and opportunities. Over the years, the United Nations Development Programme (UNDP) has come to understand the key role social enterprises and impact-oriented businesses can play in addressing various social, economic and environmental challenges through innovative technology solutions and sustainable business models. That said, transitioning to new development pathway requires a more systemic and deeper transformation than closing a financial gap.
Social innovation initiatives like the recently concluded Social Impact Challenge Accelerator (SICA) will evolve to be a pivotal movement towards balancing profit between innovators, society and the environment. To seed and scale more solutions that could deliver a sustainable society, venture capital and financial institutions will need to play a strong role in leveraging their capability of finding, investing, and scaling highly performing ventures offering transformational and impactful solutions aligned with SDGs to the markets.
According to Christophe Bahuet, Deputy Regional Director for Asia and the Pacific, and Director of UNDP Bangkok Regional Hub, “Globally and in Asia Pacific, we see a momentum for SDG alignment investment that is accelerating and making significant changes in the investment landscape. What we see are investors expressing a renewed commitment to play their part in building a more resilient and sustainable world. Impact investing market, which is currently estimated at USD 715 billion, is growing at a 17% average over five years and in Southeast Asia, the growth is actually above average reaching about 25% now. This increased growth and volume in the region is one that is welcomed by UNDP and wish will continue."
Cognisant of the fact that micro, small, and medium enterprises (MSMEs) are a key driving force of Malaysia’s economy, representing 97.2% of all businesses and contributing 38.2% of GDP in 2020 – a joint initiative like the Impact Venture Accelerator program which is implemented in Phase 2 of the SICA collaboration with leading venture capital firm 500 Global can contribute to the country’s efforts to fast-track the SDG achievement through the scaling of transformative and impactful business models, as well as showcasing Malaysia’s impact-driving start-ups to a world of impact capital.
Under the UNDP-MaGIC partnership, the SICA program has collaborated with 500 Global on accelerating the growth of impact ventures targeting five priority fields; (i) enhancing ageing services for Malaysians; (ii) upcycling river waste to wealth; (iii) educating the future; (iv) innovating for children; (v) driving social impact - the startup way.
On 23 November 2021, the group of twenty-five start-ups that were chosen for the second phase of the SICA programme completed their 10-weeks of rigorous grooming through the acceleration programme that combines a business acceleration programme with robust dedicated efforts for SDG impact alignment, including impact measurement and management practices. As the culmination of the Acceleration phase, a Venture Showcase Day was organised to provide the teams with the opportunity to present their business pitch to an audience of local and global impact capital investors, financial institutions and scale-up partners, before qualifying for the third phase of SICA.
Niloy Banerjee, Resident Representative UNDP Malaysia, Singapore and Brunei Darussalam said, “UNDP has been implementing the impact venture accelerators (IVA) globally for the last 3-4 years which have proven to be a practical and effective approach to help enterprises scale up effective business-based technology solutions to development issues. I would also like to take the opportunity to congratulate all the 25 ventures who took part in the Impact Accelerator Programme – the element that this programme values most is the impact that their solutions can make on the world and in communities, particularly in the trying times we are navigating.”
To further strengthen the development of the impact ecosystem in Malaysia, a high-level policy dialogue was held in conjunction with SICA Venture Showcase Day to address the gaps and identify solutions to uncover issues and opportunities to build a mature and organised impact ecosystem. The Dialogue was attended by key personnel representatives from Malaysian Research Accelerator for Technology and Innovation (MRANTI), United Nations Development Programme, Khazanah Nasional Berhad and 500 Global. MRANTI is a recently announced agency formed through the consolidation of MaGIC and Technology Park Malaysia (TPM).
Key takeaways from the panel dialogue include:
1. The term Impact Investment is widely defined as the intention to bring positive social outcomes, especially when deployed at a larger scale. Technology and innovation solution provided have been at the forefront of applying solutions to solve social and environmental issues.
2. There is a need for credible tools to define, measure and make impact approachable. Once impact is appropriately measured and showcased, more stakeholders are likely to take such impact seriously.
3. It takes a mid-long-term approach to build the impact ecosystem. Awareness and buy in on impact investment will need to be improved for larger scale investments to drive positive impact.
The event generated strong interest from the investor community. Dzuleira Abu Bakar the CEO of TPM commented, “MRANTI aims to build a thriving global community by accelerating the commercialisation of innovative ideas to impact. Moving forward, we hope we can strengthen this collaboration to create collective impact, provide continuity, and experiment with new models to support our startups in enabling them to create large-scale social change in the long run. We believe that by doing so, we will improve economic growth and societal wellbeing by ensuring products and solutions are more affordable, available and accessible towards improving quality of life for all.”
Nik Marien Kamal, Senior Vice President (Investments), Khazanah Nasional Berhad, added that “The concept of impact will be mainstream in the future and no longer relegated to a niche asset class, in essence all investment will be impact investment. But this comes with pressures to be more precise in defining impact and intended beneficiaries. Impact investing is also now a responsibility: investors cannot maximize financial returns while ignoring social and environmental externalities.”
Khailee Ng, Managing Partner, 500 Global, said, “The impact ecosystem has evolved rapidly in 10 years, there is now a large volume of activity (venture showcase days, consumer behavioural change, grassroots efforts) dedicated towards positive impact. People should identify a specific SDG or impact sector and start taking steps today towards significant future impact.”
Under the third phase of the SICA programme, participants who perform well during the Venture Showcase Day will have the opportunity to receive post-accelerator support, such as financial assistance from participating partners, access to local and international networks and mentorship, the ability to access government procurement (Program Perolehan Impak Sosial Kerajaan) and attracting international investment.