Korea-based company works to develop nascent ecosystem of "environmental-lens impact investing"
By Wonhee Kim and Anna Kang, MYSC.
According to the Korea National Statistical Office’s Social Survey of 2018, 14 per cent more people are in favor of paying environmental costs compared to two years ago. This indicates that the Korean citizens’ environmental sensitivities are surging. Reflecting this sentiment, environmental policies to prevent fine dust, plastic waste, hazardous chemicals, and climate change are actively being implemented.
This change goes beyond the public sector.
Private companies are also striving to create environmental value in their value chains by minimising hazardous waste, saving natural resources, and making active partnerships with environmental groups. These changes go far beyond the environmental conservation activities of businesses in the past. Some Korean companies, including Hyundai Motor Company, have made environmental contributions within the United Nations Sustainable Development Goals' “Partnerships for the SDGs platform.” Specifically, the Hyundai Green Zone project aims to combat the desertification in Inner Mongolia, China. However, despite growing interest and severe levels of environmental pollution, there is still a lack of accessible assessment tools to measure negative environmental impacts and interests in environmental sustainability.
MYSC, a certified B Corporation since 2016 and an impact investor in Korea, has been developing programs to promote environmental sustainability. We believe in expanding and supporting environmental value-generating activities driven by our partner corporations and social ventures. Thanks to the environmental section of the B Impact Assessment (BIA) process to become B Corps, MYSC decided to establish environmental management policies to encourage investment in social ventures, which provide solutions for climate change, energy, and environmental hazards.
In addition, MYSC has joined the 1% For the Planet movement this year and will donate at least 1% of its annual sales to grassroots environmental groups. We are also going to organize an environmental task force team early next year to plan and operate activities to enhance environmental sensitivity internally.
As an impact investor and consulting agency on sustainable business, MYSC has been facilitating several major environmental activities in Korea.
Seminars and workshops on environmental value creation
MYSC holds seminars and workshops related to environmental issues to raise awareness in the social sector of Korea. For instance, this year, we held the "B Corps Seminar on Sustainability" alongside the clothing company with an environmental mission, Patagonia. They specifically presented lessons learned about how the company minimises unnecessary waste while producing quality products with multiple functions, how to monitor and manage negative environmental impacts, and how to adopt renewable energy systems in the long run.
Accelerating programmes to increase sustainability for social venture
This year, funded by HSBC, “Helping Sustainable Business” (HSB) was designed specifically for increasing the sustainability of social fashion brands in Korea by, for example, manufacturing upcycled fashion items and engaging the Base of the Pyramid in their value chains. Participating entrepreneurs utilised B Corps as a tool to assess and increase their companies’ sustainability, and lectures on the Higg Index, an indicator to quantify the environmental impact of products through a Life Cycle Assessment (LCA), stimulated thinking about what entrepreneurs could do together to strengthen sustainability throughout the fashion industry.
Incubation, acceleration, and investment in social ventures tackling environmental issues
One of our investees, ARTIMPACT is a social venture running a platform as a product distribution channel for young fashion designers, artists, and social entrepreneurs. Using the funding provided by MYSC, ARTIMPACT is now producing upcycled swimsuits through a zero-waste manufacturing process to prove the re-usability of wasted resources in collaboration with SMK, an eco-friendly brand.
LAR, one of our program alumni, manufactures eco-friendly sneakers using recycled leathers, cork insoles, and organic cotton. LAR donates ten per cent of its revenue to underprivileged kids and teenagers in Korea. They have been receiving professional mentoring and partnered with MYSC to strengthen their business model and strategise how to expand their social impact.
Ballys, a serial participant in MYSC’s program, produces pet feed using invasive fish species such as largemouth bass and bluegills, which ruin the biodiversity of our ecosystems in Korea. Not only does their business model allow them to save money, but they have decreased the negative effects that invasive species have had on fishermen’s household income. Ballys also donates thirty per cent of their revenue to animal and environmental protection groups.
It is true that Korea is at a nascent stage of environmental-lens impact investing. To build the ecosystem and facilitate various players’ commitment, MYSC will continue to do its part to increase environmental sensitivity among impact investors and social ventures. While it is going to be a long journey, we believe we are building a sounder ecosystem for social businesses to understand and reduce their environmental impacts.