Sustainable entrepreneurship and innovation in Hong Kong
Simon Lee, Senior Manager, Sustainable Business HK
There is a common perception that sustainability leadership is for large corporations only. Small companies have limited resources; many in Hong Kong operate under extreme tight margins in a fiercely competitive marketplace. Investing in sustainability may be seen as unaffordable – or something that will have to wait.
Yet there are many local entrepreneurs and small companies that have actively embraced sustainability as a business opportunity to develop new products and services, which meet the needs of their increasingly eco-conscious corporate clients.
Fitting out the green office
Design and technology play a valuable role in making offices and business operations more sustainable:
- Liquid Interiors uses a points system to create spaces that are visually inspiring, environmentally positive, and healthy to work in. For ex ample, clients earn points through creatively re-using materials and furniture, encouraging biodiversity, purifying air, and allocating space for meditation or rest.
- Ultra Active Technology (UAT) provides advanced videoconferencing and immersive telepresence solutions that recreate the feel of real, face-to-face meetings. Users can thus avoid flying to meetings – thereby improving their own health and productivity, cutting costs, and reducing carbon emissions.
Turning waste into resources
Sustainable innovation is also helping to pioneer a circular economy approach:
- Design agency AXENT Communications uses recycled plastic (RPET) to produce gift items for corporate clients such as wallets, passport holders and bags. It sources used truck and automobile tyres from northern China, which are then cleaned and processed for manufacture by its suppliers into high-value gift items.
- Zenda Green Energy and Dynamic Progress work in partnership to collect used cooking oil from food and beverage (F&B) businesses, which Zenda converts into a low-carbon bio-diesel. The fuel is then sold on for such uses as powering construction site equipment, ship engines, or kitchen stoves.
- Dynamic Progress has diversified into importing advanced stoves for its F&B clients. These maintain the flame intensity required for traditional Chinese-style wok frying yet consume 60-80% less fuel. By leasing rather than selling the equipment, Dynamic Progress can ensure regular maintenance for optimal operational efficiency.
Harnessing finance for sustainability
Finally, the finance sector plays a unique role in activating investment in sustainability:
- Blue Sky Energy Efficiency provides a link between large-scale institutional investors and small-scale projects. Channelling funding from investors, the company provides capital for installation of energy-efficient air-conditioning and lighting systems in hotels, data centres or hospitals. It then takes a share of the subsequent operational cost savings over an agreed time period, thus creating a win-win solution.
- Sky Solar works with institutional investors in Hong Kong and elsewhere to secure funding for large-scale development projects. To date it has completed 200 solar parks across five continents, with a total capacity of more than 181MW. By focusing on project financing, the company can create efficient funding solutions that are responsive to local financial markets and regulatory conditions.
Ingredients for success
Speaking to the entrepreneurs who have established these innovative businesses, a number of common themes become clear:
1. Leveraging core skills for sustainability impact
They have done so by leveraging their core professional knowledge and skills for sustainability impact. Liquid Interiors’ Principal Founder Rowena Gonzales had 12 years’ international experience in interior design prior to establishing the company, and gained further green building expertise through attaining LEED qualifications. Tienyu Sieh spent decades in finance and economics before becoming the CEO of Blue Sky Energy.
2. Recognising gaps in the marketplace
Sustainable products and services are quickly moving from niche to mainstream, due in part to growing demand from corporations and governments. AXENT’s clients include global brands such as JP Morgan, Mondelez International and Unilever. UAT does not mention sustainability in its product marketing, focusing instead on functional benefits.
By understanding emerging trends, technologies and gaps in the market, sustainability-minded entrepreneurs are better able to respond to their clients’ changing needs.
3. Environmental and financial benefits
Achieving efficiencies that reduce energy and fuel consumption makes sense financially, by reducing operational expenditure. Yet the large upfront capital cost of installing new equipment or technologies is often a barrier for companies in the short run. By providing solutions for product leasing and project financing, Dynamic Progress and Blue Sky Energy Efficiency respectively are thinking creatively to help companies overcome the barriers.
4. Cross-sector collaboration
Sustainability challenges – and their solutions – are complex. Therefore, collaboration across companies, sectors and value chains is needed for their development and implementation.
For example, AXENT identified suppliers through online marketplace Alibaba, and worked with them to establish a whole new value chain for sourcing, cleaning and transporting the used tyres. Through trial and error, it developed a process with its manufacturers for making promotional gifts out of tyres instead of leather, which had been used previously.
Others demonstrate the connecting role sustainable innovators play. Zenda Green Energy and Dynamic Progress provide the missing link between kitchens and bio-fuel users. Blue Sky Energy and Sky Solar enable the channelling of investments into projects that institutional investors would not otherwise be able to manage – thus securing financial returns for themselves and investees, and environmental benefits for society.
Given these business benefits and the diversity of needs in the marketplace, it seems the possibilities for sustainable innovation are endless. We at Sustainable Business HK look forward to seeing many more entrepreneurs and small companies leading the change.