Global sustainability technology (sustech) companies are ripe for investments as ESG focuses become a top priority according to an analysis from Digido, the consumer finance company.
Digido research has revealed that a lot of Filipino fintechs are centred around innovation and sustainability. As such they will be propelled forward by investors looking to put a focus on environmental, social and governance (ESG) principles.
The consumer finance company referred to Tracxn‘s research. It showed that the sustech industry has attracted about $400billion in investments, with main growth occurring from 2014 to 2022. Of this $400billion, about $8.8billion has been used to finance the fintech microfinance sector, an integral part of sustainable development. However, only $4million was invested in 169 sustech companies in the Philippines. This is indicative of opportunities to accrue more investments.
Possible measures for ESG-bent investments to become the mainstream driver of fintech development in the country include the development of recommendations for integrating ESG indicators into the investment decision-making process. They also include increasing investor literacy and awareness regarding ESG investing. For example, through information campaigns and corporate training.
Digido views these measures to further promote sustainable and responsible investment practices in the Philippines. Thereby it multiplies investments through funding rounds. Companies that integrate ESG into their operations can expect more support from investors and consumers.
Moreover, they can play an important and tangible role in the sustainable development of the economy and the fight against climate change, as they expand their influence beyond business interests.
Growth of Philippines’ sustech
The growth of the Philippines’ sustech segment is expected to hold steady with its peers in Southeast Asia.
Furthermore, Digido observes that the 216 sutech companies in the Philippines (as of 2022) account for 10.1 per cent of those in Southeast Asia, coming in joint fourth place with Thailand, after Singapore, Indonesia, and Malaysia. The share of Philippine sustech companies in SEA will maintain its pace for the foreseeable future. It will land between 10 to 11 per cent.
Also, comparing regional dynamics with global trends, sustech companies in Southeast Asia are anticipated to grow at a faster pace.