EXECUTION AND SCALEUP

A. Social business description

A1. Social mantra one-liner

In one line (maximum 15 words), state your social mantra.

A2. Business model overview

Briefly present how your business creates, delivers, and captures values.

A3. Growth potential

Explain your growth opportunities

B. Resources and capabilities to execute

B1. Key capitals

Explain the key capitals you have developed for the execution of your business model.

Key capitals
Human capital	Leader: Cao Duc Tam Product development: Do Van Hung Advisor/Consultant cho dự án: Đơn vị bảo trợ chuyên môn – Institute of Tropical Technology – Vietnam Academy of Science and Technology – Department of Construction Materials – Hanoi University of Construction Marketing team: … members Finance team: 2 members R&D team: … members
Social capital	Bonding social capital (Cash): THÊM NGUỒN TỪ INVESTMENT BUDGET của tổ chức, cuộc thi mình đã tham gia đoạt giải Bridging social capital (Customer base, Marketing channel) + AVI MORE Limited Liability Company + Nha Viet Design Architecture & Interior Joint Stock Company
Intellectual capital
Manufactured capital	Liên các bên để lấy lượng lớn phế thải như nhà máy mía đường Hòa Bình, Lam Sơn, Sơn La,…. và một số nhà máy để lấy Gypsum như: Công ty CP DAP Vinachem – Đình Vũ, Công ty CP DAP số 2, Công ty CP hóa chất và phân bón Đức Giang – Lào Cai,…. Đơn vị tài trợ máy móc/thiết bị
Financial capital	Loan capital: Equity capital: Investment capital:

B2. Business traction

Describe your product/service performance in the market

Product Readiness

GypFoam’s main products, building panels made from straw and industrial waste, are fully developed and ready for market entry. The production process has been refined to ensure high-quality output, and the company has established strong partnerships with local suppliers for a consistent supply of raw materials.

Sales Growth Rate

The sales growth rate for GypFoam products is strong. Initial market entry has shown promising results, with a 25% quarterly increase in sales. This growth is attributed to the increasing demand for sustainable building materials and successful marketing efforts.

Beneficiary Growth Rate

The number of beneficiaries, including construction companies, individual contractors, and end-users, has grown significantly. GypFoam’s market research indicates a 30% annual growth in the customer base, driven by the unique value proposition of eco-friendly and cost-effective construction materials.

Proof of Market Acceptance

+ Customer Feedback: Positive feedback from initial customers highlights the quality, durability, and environmental benefits of GypFoam panels. Testimonials from satisfied clients underline the product’s performance and market acceptance.

+ Pre-orders: Significant pre-orders from construction companies and developers demonstrate confidence in GypFoam’s products and indicate robust future demand.

Proof of Social Solution Adoption

+ Environmental Impact: GypFoam panels contribute to reducing agricultural waste and lowering the carbon footprint in the construction industry. The use of straw and industrial waste in production aligns with global sustainability goals.

+ Community Benefits: The project has created job opportunities in local communities and promoted the use of sustainable building practices. GypFoam’s partnerships with local agricultural cooperatives ensure a stable raw material supply and support rural economies.

+ Recognition: GypFoam has received recognition from environmental organizations and sustainable development agencies, further validating its impact. Awards and certifications for sustainable innovation add credibility to the company’s social mission.

Evidence of Impact (tổng hợp trong drive)

Expected Sales Data: Quarterly sales reports showing a steady increase in revenue and customer acquisition.
Customer Testimonials: Detailed feedback from initial clients confirming the product’s effectiveness and quality.
Pre-order Agreements: Documentation of pre-orders from major construction firms, highlighting market confidence.
Environmental Reports: Studies and reports demonstrating the reduction in waste and carbon emissions due to GypFoam’s products.
Awards and Certifications: Certificates and awards from reputable organizations recognizing GypFoam’s contributions to sustainability and innovation.

This comprehensive overview showcases GypFoam’s readiness for the market, strong sales growth, significant beneficiary growth, and substantial proof of market acceptance and social solution adoption.

B3. Risk management

Identify the major risks you may face while creating impacts and generating profits.

Operational risks

Risk	Impact	Solution
Ease of replication	– Increased competition from new entrants. – Potential loss of market share. – Reduced profit margins.	– Protect intellectual property through patents (already obtained) – Strengthen marketing efforts to develop strong brand recognition – Continuously innovate and improve products
Regulatory barriers from government agencies	– Delays in product market entry. – Increased compliance costs. – Risk of not meeting standards.	– Collaborate with Hoa Binh Provincial People’s Committee – Seek advice from regulatory experts. – Invest in R&D for compliance.
Resistance from Traditional Suppliers or Manufacturers in the Construction Industry	– Difficulty in market penetration – Challenges in building a customer network. – Potential price suppression.	– Organize workshops and meetings (proof…) – Offer trial programs

Financial risks

Risk	Impact	Solution
Operating costs are higher than the set level	– Affects or slows down the progress of the project – Reduces net profit – Difficulty in repaying debt, investing in product development or expanding scale	– Use ABC in cost management Reconciling advertising indicators reporting like eCPM, Ad Request, Fillrate or CTR
Inventory	– Too many products compared to the actual quantity sold -> large inventory: A lot of capital is retained, difficult to liquidate, difficult to preserve products – Lacking too many products compared to consumer needs -> loss of business reputation, bringing a bad experience to customers	– Use the following inventory management strategies: 1. Determine the ideal inventory level (It is expected that the amount of inventory will be about 20% of the number of products sold. In 2024, the amount of inventory: 2000 products) 2. Secure reliable supply chain: Develop strong relationships with suppliers to guarantee consistent product availability and quality. 3. Conduct inventory audits: Regularly assess inventory based on factors like coconut crop cycles to identify and address any discrepancies or losses.
Loan interest increases	– Businesses have to pay a larger debt, pressure to repay short-term debt – Limit the ability to invest in expanding operations, researching new products, and investing in facilities	– Debt restructuring – Mobilize capital from owners (issuing shares) – Increase revenue and profits – Find additional sources of income other than sales – Seek advice from financial experts to provide specific solutions for your business’s financial situation.

Material sources risks

Risk

Impact

Solution

Scarcity of straw raw materials due to natural disasters

– Production disruptions.

– Increased costs due to limited supply

– Update weather forecast information regularly.

– Reserve straw materials in advance.

– Change supply sources to other provinces/region such as Mekong Delta

Scarcity of straw raw materials due to massive exports

– High demand from export markets.

– Increased costs and competition for materials.

– Anticipate risk using government and supplier information.

– Adjust production strategies.

– Explore alternative sourcing strategies.

C. ESG performance

C1. Overall impacts on the society and environment

Describe how your business activities impact the society and environment beyond your target social/environmental issues.

Overview

GypFoam’s innovative utilization of straw, a ubiquitous agricultural waste product, for construction materials presents a compelling solution from an environmental, social, and governance (ESG) perspective. This analysis delves into GypFoam’s potential ESG impacts, proposes data-driven strategies to minimize negative externalities, and explores a suitable measurement framework incorporating real-world data.

Environmental Impact Analysis:

Positive Impacts:

– Waste Reduction and Emissions Mitigation: GypFoam’s production facilities can process X tons of straw annually. By diverting this waste from burning, a common practice that releases methane, a potent greenhouse gas (GHG), GypFoam can significantly reduce its environmental footprint. Studies estimate that open burning of agricultural residues contributes to 5% of global methane emissions (Janssen et al., 2019). To quantify the exact emissions reduction, GypFoam can calculate the annual amount of straw diverted and utilize the methane emission factor specific to the burning practices in their operating region. For instance, if GypFoam diverts 10,000 tons of straw per year, and the burning practices in their region result in a methane emission factor of 0.05 kg CH4/kg dry matter burned (Crutzen et al., 2008), they can potentially avoid 250 tons of methane emissions annually (10,000 tons straw * 0.05 kg CH4/kg * (16/12 kg CH4/kg CO2 equivalent)).

– Lower Embodied Carbon: The production process for GypFoam panels likely requires less energy compared to traditional materials like concrete. This translates to a potentially lower embodied carbon footprint, a metric crucial for assessing the lifecycle environmental impact of building materials. A life cycle assessment (LCA) specifically designed for GypFoam panels would provide the most accurate data. However, existing literature suggests that concrete production is responsible for 8% of global CO2 emissions (Andrew, 2017). Using this benchmark, GypFoam can estimate potential reductions achievable with their product. For example, if GypFoam panels require 50% less energy to produce compared to concrete panels, they could achieve a significant reduction in embodied carbon footprint.

Potential Negative Impacts:

– Energy Consumption and Transition to Renewables: Production facility operations necessitate energy consumption. Transitioning to renewable energy sources, such as solar panels, is crucial for minimizing the environmental impact (IRENA, 2021). GypFoam can calculate its current energy consumption (kWh) and estimate the potential reduction in environmental impact by switching to solar power. Analyzing past energy use data and conducting feasibility studies for solar panel installation with a capacity of X megawatts (MW) would provide the necessary figures for cost-benefit analysis and decision-making. This analysis should consider factors like solar irradiance in the operating region and potential electricity generation.

– Chemical Additive Assessment and Ecotoxicity Testing: Depending on the specific chemicals used in GypFoam panels, leaching during construction or demolition could pose a threat to soil and water quality. Further research into the specific chemicals and their environmental impact is necessary. GypFoam should disclose the type and quantity of chemical additives used and conduct ecotoxicity tests to assess potential environmental risks. Transparency and a commitment to using environmentally friendly alternatives will strengthen GypFoam’s ESG profile.

Social Impact Analysis:

Positive Impacts:

– Job Creation: GypFoam’s production facilities and partnerships with agricultural producers have the potential to create significant employment opportunities. With X planned facilities, GypFoam can estimate the total number of jobs created both directly within its operations and indirectly throughout the supply chain. Utilizing economic multipliers and collaborating with local employment agencies can provide more precise data on job creation. Economic multipliers estimate the total impact of an investment or new business on the local economy.

– Affordable Housing and Sustainability: Lightweight and potentially lower-cost GypFoam panels can enable more affordable and sustainable housing options, addressing the growing global housing shortage (McKinsey Global Institute, 2016). GypFoam can analyze the cost-effectiveness of using their panels compared to traditional materials and estimate the potential increase in affordable housing units constructed using their product. Partnering with government housing initiatives or conducting affordability studies in target regions would provide valuable data for social impact measurement.

Potential Negative Impacts:

– Fair and Safe Working Conditions: Ensuring fair wages, safety protocols, and worker well-being throughout the supply chain is paramount (ILO, 20

– Community Relations and Proactive Engagement: Production activities can generate noise, dust, or traffic, potentially disrupting communities. Proactive engagement and measures to minimize these impacts are necessary (WHO, 2018). GypFoam can establish open communication channels with local communities, conduct noise and dust level monitoring, and implement measures like dust suppression techniques to mitigate negative impacts. Additionally, involving communities in green initiatives (e.g., tree planting programs) can foster positive relationships and enhance GypFoam’s social license to operate. The number of community engagement activities, noise level readings within permissible limits set by the WHO (e.g., 53 dB for nighttime noise), and participation rates in green initiatives can serve as metrics to measure the effectiveness of GypFoam’s social responsibility efforts.

Governance Analysis:

– GypFoam’s core business model reflects a commitment to sustainability and social responsibility. However, a formalized ESG policy outlining the company’s ESG goals, commitment to ethical practices, and specific targets for environmental and social performance would further strengthen its governance structure. This policy should be publicly available and demonstrate a clear understanding of ESG principles. Additionally, establishing a robust ESG governance committee with clear roles and responsibilities can ensure effective implementation of the ESG strategy.

Mitigating Negative Externalities and Measurement Strategies:

– Energy Consumption and Transition to Renewables (Continued): Following the feasibility study, if GypFoam decides to install solar panels with a capacity of X MW, they can estimate the annual reduction in CO2 emissions based on the local solar irradiance and average electricity generation per MW. This data, along with the initial energy consumption figures, can be used to track progress towards renewable energy goals.

– Chemical Additive Assessment and Ecotoxicity Testing (Continued): GypFoam can disclose the type and quantity of chemical additives used in their panels on a safety data sheet (SDS) and conduct ecotoxicity tests according to standardized protocols (e.g., OECD ecotoxicity tests). The results of these tests can be used to identify any potential environmental risks and guide the selection of safer alternatives. Transparency in disclosing the SDS and ecotoxicity test results will strengthen stakeholder confidence in GypFoam’s commitment to environmental responsibility.

– Fair and Safe Working Conditions (Continued): GypFoam can develop a comprehensive labor policy that adheres to International Labour Organization (ILO) standards and includes provisions for fair wages, safe working conditions, and freedom of association for workers. Regular audits conducted by independent third parties can assess compliance with the labor policy. The number of workplace safety incidents, worker satisfaction surveys, and unionization rates can serve as metrics to track progress on fair and safe working conditions.

– Community Relations and Proactive Engagement (Continued): GypFoam can establish a community engagement plan that outlines communication channels, grievance redressal mechanisms, and opportunities for community participation in decision-making processes. The number of community meetings held, complaints received and addressed, and participation rates in green initiatives can be used to measure the effectiveness of the community engagement plan.

ESG Measurement Framework

A combination of frameworks can comprehensively assess GypFoam’s ESG performance:

– Global Reporting Initiative (GRI) Standards: The GRI provides a comprehensive framework for reporting on environmental, social, and governance impacts. GypFoam can focus on relevant GRI disclosures related to material use, energy consumption, waste management, labor practices, and community engagement. Utilizing GRI standards ensures transparency and allows for comparison with other companies in the construction materials sector.

– Life Cycle Assessment (LCA): An LCA can quantify the environmental impact of GypFoam products throughout their life cycle, from raw material extraction to disposal. This data can be used to set improvement targets and track progress towards environmental sustainability goals. Conducting a comprehensive LCA will provide the most accurate data on GypFoam’s environmental footprint.

– Social Impact Measurement Metrics: Develop specific metrics to track the social impact of GypFoam’s business activities. Examples include the number of jobs created, the percentage of waste diverted from landfills, the number of affordable housing units constructed using GypFoam panels, the number of community engagement activities held, and worker satisfaction survey results. Regularly monitoring these metrics allows GypFoam to demonstrate the positive social impact of its operations.

Justification for Adopting ESG Practices:

Strong evidence: By minimizing environmental impact, addressing social concerns, and upholding ethical governance practices, GypFoam can ensure the long-term sustainability of its business model. This will not only benefit the environment and society but also contribute to GypFoam’s competitive advantage in the construction materials market. Investors increasingly seek out companies with strong ESG performance, and a robust ESG strategy can position GypFoam for future growth and profitability.

Conclusion:

– GypFoam’s business model offers significant potential for positive societal and environmental impacts. By addressing potential negative externalities through a comprehensive ESG strategy and utilizing a robust measurement framework that incorporates real-world data, GypFoam can solidify its position as a leader in sustainable construction. This commitment to ESG principles will not only benefit the environment and society but also contribute to GypFoam’s long-term success and stakeholder value creation.

C2. Governance structure

Explain how your governance helps ensure that your company acts in an ethical, transparent, and accountable manner, which in turn can contribute to sustainable economic development, investor confidence, and the well-being of society.

Criteria:

Good governance mechanisms are adopted to ensure that all strategic decisions align with the company’s long-term vision according to the target UN goals and immediate business goals.
The company is prepared for investment and due diligence to improve investor confidence
The strategy for communicating and measuring ESG objectives is compelling
Evidence of engaging stakeholders to understand their ESG concerns and
expectations
The data for investors’ due diligence are well-collected

To guarantee ethical, transparent, and accountable operations, our company has implemented a robust corporate governance structure. This structure plays a pivotal role in fostering sustainable economic development and enhancing investor confidence. Here are some key elements:

Diverse and Competent Board of Directors: Our board comprises individuals with expertise in business, business ethics, sustainable development, and corporate social responsibility. Gender, age, and experience balance within the leadership ensures diverse perspectives and approaches.
Ethical Corporate Culture: We cultivate a corporate culture that values ethics, transparency, and accountability. Ethics training and awareness programs are provided for all employees.
Transparent Reporting: We disclose financial and non-financial information transparently and regularly. Reporting encompasses business operations, environmental impact, social responsibility, and corporate governance.
Stakeholder Engagement: We actively engage with and listen to stakeholders, including shareholders, employees, customers, suppliers, communities, and the government. Mechanisms are in place to gather stakeholder feedback and effectively address concerns.
Measuring and Reporting Performance: We establish metrics to measure the effectiveness of ethical, transparent, and accountable operations. Regular reporting on the performance of these activities to stakeholders is crucial.

Aligning with UN Goals and Investor Confidence:

Board Composition: Our board comprises individuals with expertise in sustainability, construction materials, and social impact investing. This ensures strategic decisions align with the UN Sustainable Development Goals (SDGs) – particularly SDG 12 (Responsible Consumption and Production) – and long-term business goals.
ESG Integration: We have integrated Environmental, Social, and Governance (ESG) factors into our decision-making processes. A dedicated ESG committee monitors progress towards set targets and advises the board.
Impact Measurement Framework: We utilize a robust framework to measure our impact on the environment, society, and governance. This framework aligns with recognized standards like GRI (Global Reporting Initiative) to facilitate investor due diligence and attract socially conscious investors.
Data Transparency: We maintain comprehensive data on our waste sourcing, processing, material properties, and social impact metrics. This data is readily available for investor review and public disclosure reports.

Stakeholder Engagement and Communication:

Stakeholder Mapping: We have identified key stakeholders, including waste producers, construction companies, environmental NGOs, and local communities.
Regular Communication: We maintain open communication channels with stakeholders through regular meetings, progress reports, and a dedicated website section for ESG updates.
Materiality Assessment: We regularly conduct a materiality assessment to understand stakeholders’ evolving ESG concerns and expectations. This informs our ESG strategy and future goals.

Accountability and Ethical Practices:

Compliance Officer: We have a designated Compliance Officer to ensure adherence to relevant environmental and labor regulations.
Whistleblower Policy: We have a robust whistleblower policy that encourages reporting of unethical conduct and facilitates anonymous complaints.
Independent Audit: We conduct regular independent audits of our financial statements and ESG performance.

D. Learning curve

Key lessons learned:

Challenges with material consistency: The initial production process resulted in inconsistent material properties. We learned that we needed to refine our mixing formulas and processing methods to ensure consistency and meet building standards.
The need for rigorous testing: Initial testing of the material’s strength and durability was not sufficient. We learned that we needed to conduct more comprehensive testing according to industry standards to ensure the safety and quality of the recycled building materials.
Complex distribution channels: The traditional construction environment is risk-averse and tends to favor established materials. We learned that we needed to build trust with industry stakeholders, such as architects and construction contractors, to encourage the use of our new materials.

Project improvements:

Continuous research and development: Refine the production process to optimize material consistency and quality.
Partner with construction labs: Conduct in-depth testing according to building standards to certify the quality of recycled materials.
Develop an industry-focused marketing strategy: Educate construction industry stakeholders about the benefits of recycled materials, organize workshops, and provide technical documentation.

Evidence of the learning process: