Technology is often touted as a solution to the world's environmental challenges. But it's also part of the problem and industry executives are facing rising pressure to clean up their energy and resource intensive businesses. And to evaluate the environmental cost of tech and how to minimize it. Please welcome experts by David Yang and Tao Zhang. With Fortune's Michal Lev- Ram, thank you. [ MUSIC ] Hey everybody. Okay, I'm gonna Put this on. Just to start out, we have a lot of different topics to get to. But I'd love for each one of you to very quickly introduce yourselves and your organizations. And just say what your respective companies do. Do you wanna start, Bo? Sure, if you can hear, then I can just start. So US China green funding is a great impact investment firm that was it initiated a by fossil institute under China organization 3 years ago. are we really define ourselves as a through private equity investments in the growth stage and later stage deals and trying to drive the growth of the company in green consumption and green transportation in green energy and environmental protections by combining the US and the western technologies With Chinese market demand to help solve China's environmental issues, over the past three years, we have invested in more than $ 500 million, mostly in China. And we are in the process of closing our second found close to $ 1 billion. So glad to be here and thanks for the invitation. Great, David. [ UNKNOWN ] [ BLANK_AUDIO ] You all know today is eighth of November. After three days, there's going to be double 11. It's a Shopping Festival just like your Black Friday. If you purchase anything from e- commerce platforms, how can you make sure those products can be delivered? promptly. express service? Exactly. I'm from Chauvin group, SF group. You all know that SF group is Courier Service express delivery. What I want to say is we used to be a delivery or courier service company but if you still have the viewpoint towards our group today You are very wrong, because in parallel to our Career Services express delivery, we invest a lot in the sustainable development, grain development, and also science and technology. Our current strategy is very different from other career service companies. We position ourselves is spearheading the science and technology call solution provider. Where science and technology go service provider without being engaged in this arena. I will not be the panelists that sitting on the stage. This is my second point. SF group is not just a simple Korea express delivery service company. In the past years along with China's reform and opening up we enjoyed very rapid development. You all know that the reform and opening up in the past four decades we already lost the good momentum For from the policy point of view, so as I've in recent years is trying very hard to do the transformation including the supply chain business and to cope with the new challenges. Adidas as the ladder to Oreo. All these are brands when they enter into China. We help them to do their supply chain business. Last year, they acquire the DHL greater China business or the McDonald's delivery. [ UNKNOWN ] this company delivery company for McDonalds. We are part of them as well last year. From my short presentation, now you know We are in the transformation. We are not aggressive [ INAUDIBLE ] anymore. We are a technology company. We are going to have higher bars in the future. So I'm here to represent two organizations that I founded or co- founded. So the first one is Dao Ventures. Dao Ventures is a US- China consortium of various impact investing entities. So the consorting with has a focus to basically support Chinese environmental small, medium sized enterprises. So similar consorting over the years. So basically, over the past decade we have supported over 1000 environmental small, medium size enterprises in China and also some social and environmental enterprises From overseas. So the second organization that I co founded and also of which [ UNKNOWN ] is holding company is called [ UNKNOWN ] International. So I co founded this firm together with a couple of other stakeholders. To focus on introducing plant based protein products to China, so we're doing that from environmental perspective. So basically the reason why I doing that is that we want to introduce plant based proteins, actually which is a concept that is very popular right now runs out. So to replace our animal meat products and hopefully by doing that reduced the burden, [ UNKNOWN ] burden on China's livestock industry. So that's probably thank you first of all to all three of you. That's probably a good segue to just talking about and giving some context for The scale and the scope of some of the environmental issues that we're seeing, and it would be great to hear from the three of you on, specific to the Chinese market. What are you saying? I mean, can you talk for example about the consumption of meat? How many of you by the way Are vegetarians. Show of hands. Okay. [ LAUGH ] Yeah, that's just, basically the reality we need to do was in China, though, as we always talk about it, everyone in China is more like a flexitarian. So when we eat you'll win your soup, right. So we have both plant based and also we have meat. But how you can replace right the meat products and people eat and and also back it up with tasty cost competitive and accessible good alternative protein products. That's a challenge we we want to overcome so then entrepreneurs we're going to support. But from the environment to prospect, I don't think China can afford to have the kind of livestock, agriculture as do some of the developed markets do like the US simply because if you look at China, so China nowadays consumes more meat than any other country So responsible for one quarter of the global meat consumption and one half the global pork consumption. And- One half? One half, yeah. So that's definitely a [ UNKNOWN ] Serious environmental challenges to China on various fronts, like water, arable land, transportation, greenhouse emissions, all the different type of environmental challenges. That's the logic behind what we do as a impact investor, and also a accelerator incubator But at the same time we understand from a consumers perspective, especially mainstream meat eaters perspective, they still want quality meat products. So you cannot tell them you know, stop eating meat, right be environmental friendly. That's not what we do. But we want to, Identify, engage and invest in the kind of entrepreneurs who know how to come up with the good produce good quality products, alternative protein products, and so the mainstream media eaters they can continue to have good food, gourmet food. By the same time they can also become part of China's environmental solutions. So, go ahead. If we, [ INAUDIBLE ] some coment in here, the real world situation turns out to be a trigger to solve. Each China person eat about half a pig a year. So next time think about those for pigs. So what happened with the high rise of the pork prize, is a result of at least two factors. Why is the African swine flu has created a huge issues for. The situation here in China and the tool was related to environmental issues. Three or four years ago, China's government began to shut down there was a small mom and pop farms and to have them more concentrated other than that reduce the whole stock and as a result, today. To some extent, the government was forced to go back, to go back to some of those less environmental friendly ways to raise the pigs because they have to solve the pig price issue, pork price issue and social unrest issue. So I think that there is a VC way of looking at some of the startup companies and slight difference with a private equity firms. We look at technologies from Israel from Europe and the US as well to raise for example, salmon on the land base, the salmon raising technology and all those to hopefully bring more protein to For the system as fast as we can we also help support some of those more environmentally friendly, large pig farms, hopefully to have that have a balanced approach this issues And David, I wanna get to some of the issues that we're seeing because of transportation and packaging and everything involved with the shipping industry, but just real quick, staying on the food topic, are there learnings from some of the companies in the US that are providing alternatives to meat that you are able to kind of glean from? Today with impossible needs and- Yeah, actually one of our equity stakeholders of Davos International is a company called New Crop Capital. So New Crop Capital is investment specialists in alternative protein space. So they invested in Beyond Meat at the very early stage. They were so heavily invested in over 35 [ UNKNOWN ] in US and other parts of the world. So, the experience we have learned from new crop capital is, you know, and combined with the reality of China, because if you look at China China's already has a long history of plant based food, right? So, if you talk to people a lot of people know you know there's like, you know kind of plant based meat or we call it plant based meat one dot one dot O, which is basically more of like Buddhist you know, vegetarian kind of community. But at the same time how you can mainstream, right? Mainstream that kind of we call it plant based food 2. 0 or 3. 0 to meat eaters. So that's the challenge we need to overcome and also the entrepreneurs we support. So that's why when we go out and look for entrepreneurs. That was basically a just a quick background on Dao foods. It was setup like two years, almost three years ago. So we spent basically a year just doing feasibility study on this sector in China. And try to explore the right pathway. To help mainstream plant- based food in China. So basically, the right pathway, as far as we can tell, is to identify and nurture the right entrepreneurs. To do that, and that's why but by the same time the right entrepreneurs, like the US entrepreneurs like beyond meeting possible still few and far between in China right now. So this is very, very nice kind of sector. So that's why we start actually we are planning over we just launched the boot camp last August and. Multi city boot camp for plant based entrepreneurs to promote sustainable development of plant based food in China, entrepreneurship in China. And we did the first one in Shanghai, we're planning to do the second boot camp for plant based entrepreneurs in Beijing on December the 12th. We're gonna do [ UNKNOWN ] and [ UNKNOWN ] after that. And based on that, we're also planning to, over the coming months, plan to launch an incubator to focus on identifying and nurturing Japan based entrepreneurs with the goal of incubating and investing in Some days to alternative put in ventures, study alternative put in ventures over the next three years. Okay, great. David, I won't ask you about pork, I promise, but can you talk a little, again, just going back to giving some context for the scale of some of the issues that we're seeing Partly as a result to this very robust e- commerce and delivery, you know, ecosystem that we have now. And can you quantify for us some of the issues with packaging with emissions from transportation and any any other environmental issues Actually, you may not know, I started 2015 January, I stopped eating pork. I was thinking, maybe because I did not eat pork I wouldn't have any opportunity to Discuss Furthermore, but now it's my turn. So the topic I like to talk about is that every day updated in so many fast express delivery every consumer may have noticed while receiving that there are many boxes, tapes of alien stuff Express delivery in China contributing half of the global total. Every year about 100 million pieces by China is 0. 5 billion pieces or puzzles. So the government members last year put out a proposal About the overpackaging of the express delivery industry before us practitioners in industry were very clear, actually the one you received. They're already called the primary packaging. Before we do our packaging, there's already prepared for the secondary packaging. Packaging by us. The total number quality 2017 whole year it's about 40 billion parcels that year in China. The plastic bags is about a billion plastic bags, bought paper boxes of 4 billion. In the process the packaging will use a lot of different kind of fill in like. It's about 46 million ton stuff we have to put in the in the box to make sure the glasses things won't break So this is a huge number, astonishing number for us. Secondly, if you look at this industry again, one will use transportation vehicles riding on Main route or bounce route, or in the countryside or the city to your doorstep. They burn gas Disel as the transportation of vehicle every year in China for Carbon is contributes 31 % of carbon emission. So from others practitioners we are very concerned about this Started in 2016. My company I self establish a packaging lab. All the work we do is to help reduce the quality of packaging materials. We did a recycler packaging box. You do not need to feel the added stuff If you fall from a two meter let you, there's a red light in the box. You throw that for 10 times, no problem intact. So we have ready input into the Barclays 600, 000 boxes like this. So each YN can be reused 50 times, so one year will reduce 25 million. Paper boxes. With all his stuff inside. We also use the paperless order. Order Sheet paper lists. So. In this process we save a lot of ink, paper, you know, we reduce the waste in this way. SF Group every year managers reduce the usage of paper Close to 100, 010. At the same time, we are also in the process of R & D of other ways to make our plastic bags for the 40 % of the plastic bag are in this kind of a new tab which [ BLANK_AUDIO ] So we have done a lot of work in this area. [ BLANK_AUDIO ] So we can, degradation is the word. Which can be degraded, the plastic bags. The government's advocating energy saving vehicles, we're in the process of changing, replacing the old cars with new energy saving cars. [ UNKNOWN ] Okay now everything you said thank you. [ LAUGH ] So, okay, it's interesting because your company started as a courier service basically and then kinda transformed to meet this opportunity. For the two of you, Bo and Tao, you're seeing opportunities as well. We've seen over the last decade, decade and a half, or even beyond that, quite a lot of investment in clean technologies and Green tech and a lot of those failed, at least in the US, but also abroad to some extent. So what's different this time around for each of you, and how do you make your investments more wisely, hopefully, today? I'll use the recyclable packaging investment area as a follow up and then to demonstrate what we're doing differently now compared to about 10 years ago, in that a clean tech 1. 0 time horizon. So the recyclable packaging has been great and then it helps tremendously under environmental issues, but the challenges Overall, the cost is high. And part of the reason with the overall cost high was because of the loss ratio of recyclable packages are high. And also the turnaround rates are not sufficient. And hence, whoever deals with it has to suffer higher [ UNKNOWN ] cost. If you go down the Environmental Protection side, so the question always surrounding green investment is, can you make something sustainable not only environmentally, but also commercially. So that's this time around. I think the green found green impact found has a tremendous opportunity. We invested a company that has started working with some form as we speak. They develop develop this IoT system, to put on their manufactured, recyclable packaging operation system, as well as the manage the whole operation system so that they know exactly every single boxes whether it's used for flowers, or for car components, or for oil, where they are and how they get transported and then how they gets recycled. Wash down a little released by green so they were able to reduce the turnaround rate by substantially behalf and reduce the overall cost. So we can have more customer to adopt this technology of recyclable, trackable packaging solution, not because of their more frankly, partly because they're lower cost for those customers. Now That's where we found very different this time around is a lot of this technology has become so mature compared to before. Cleantech 1. 0 at that time I was I was in New York. We are more venture capital approach way back technology company and from lab to commercial exercise. And those companies tend to have a higher capital intensity to move to the large scale and they seem to be 100, 200, 300 million dollars range. That's just unbelievable amount of money for venture capital to try that, under the incumbents are very strong. So what we're doing differently this time is we have a whole bunch of growth capital private equity firm, we are incorporating not only this hard process technology and But also the IoT technology, artificial intelligence technology more of 5G technology into these solutions to reduce the consumption of resources, to improve the efficiency reduce the environmental impacts. This is not only in the packaging solution, we have a company doing artificial density parking for Beijing. That solves a lot of those transportation issues faced by the traffic jam caused by hard fund taxi or a lot of the solutions actually can potentially work. Okay and real quick We have thirty seconds left. [ LAUGH ] Yeah, so basically for us, what we do differently is we're always trying to, you know, kind of, look for the paradigm shift kind of companies so like, like, for example, what we are doing in a plant based alternative protein space. So we're looking for Game Changing companies. I think that's key because you have to you don't you have a problem then you come with a band aid solution. You always say cannot catch up with you know, the problem is you need to deal with right so for us we want to like we talked about at one of the panels yesterday I think is healthcare panel, you need to be prevented. How to do that, you need to look for the game changing kind of entrepeneurs to support. But at the end of the day, the reality with entrepeneurs is that some of them fail. But even if fail, if they created some kind of impact or even kind of some role model for other entrepeneurs to follow. To model on, think on the stupid, good impact .>> Okay. My perspective. That's how David I'm sorry we are out of time bow. Thank you so much for being here and maybe next year we'll get to have some alternate. Alternative pork to serve to everybody here. Yeah. So thank you guys very much. Yeah. Thank you. Thank you. Thank you. [ MUSIC ] [ BLANK_AUDIO ]

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