Second- and third-generation family businesses in Asia are taking a different approach to investments, prioritizing sustainability and social impact. From Malaysia to Singapore and the Philippines, millennial business heirs are steering away from their parents’ profit-focused business models and embracing greener alternatives. This shift has led to both conflict and collaboration as the younger generation seeks to create a positive environmental and social impact.
Abe Lim, a 27-year-old Malaysian, grew up in a more privileged environment compared to her father, who worked as a mechanic to support the family. Lim’s idealistic views clashed with her father’s profit-driven mindset when she joined his business. She wanted to prioritize social and environmental impact, while her father focused on monetary gains. This disagreement led Lim to leave her father’s company and start her own ventures.
One of Lim’s early enterprises was a marketplace for used furniture aimed at promoting recycling. However, the market was not mature enough to sustain the business. Lim also faced superstitious beliefs about second-hand furniture prevalent in Asian culture. Undeterred, Lim founded Purpose Plastic in 2021, which recycles discarded plastic into various products. The company has found success, particularly with corporate clients.
Lim hopes that businesses will eventually prioritize the environment over profits. She believes that incentives could motivate companies to participate in sustainable goals. Lim’s dedication to environmental initiatives extends beyond business as she ran for local elections in Selangor, emphasizing policies to tackle climate change.
Komal Sahu, a member of the Asian Venture Philanthropy Network, highlights the role of younger generations in reshaping perceptions among business owners. They recognize that family wealth can be a catalyst for positive transformation beyond government aid. Sahu explains that second- and third-generation heirs are incorporating environmental, social, and governance factors into their investment decisions, demonstrating the possibility of aligning financial returns with social and environmental goals.
However, Sahu cautions against assuming a conflict between generations. In some cases, previous generations encourage innovative thinking to ensure the long-term success of their businesses or philanthropic efforts. Filipino Marianna Lopez Vargas, 32, is an example of this. She works for the Oscar M Lopez Center, a climate change research foundation founded by her tycoon grandfather. The family’s businesses made a bold decision in 2016 to divest from coal and focus on clean and renewable energy. Although a complete transition to renewables is not yet feasible due to solar and wind energy’s intermittency, Lopez Vargas is confident that it is possible in the future.
Persuading older generations to adopt new ways of thinking requires effective communication and understanding generational differences. Fernando Scodro, a 35-year-old Brazilian based in Singapore, educated his family about socially conscious investing after attending a course in Switzerland. He translated the entire course into Portuguese for his family and introduced them to impact investments. Scodro’s father later invested in an energy efficiency company in Brazil, unknowingly making an impact investment.
Overall, young Asian business heirs are challenging traditional profit-driven models by prioritizing sustainability and social impact. Their efforts to shift the focus toward the environment and social responsibility are reshaping perceptions among business owners and demonstrating the possibility of aligning financial success with positive change.
