The Bane And The Boon Of ESG Funding

Environment, Social, Governance, or ESG has been a buzzword for a while now. A large number of investors and companies are getting conscious about the projects they put their money in. Being mindful of one's surroundings is a necessity now more than ever before.  

Recognising this fact, BW Businessworld organised its second edition of India's Most Sustainable Companies. As a part of this event, a panel on ‘The Boon And The Bane Of ESG Funding’ was held. A scintillating discussion was held with some of the biggest names in the industry, namely, Agendra Kumar, Managing Director, Esri India, Ashish Agrawal, Director, Resurgent India Limited, Anshul Rai, Founder, Earthwise Investors, Rajendra Shrivastav, President, AES India, Sanjeev Aggarwal, Founder, Managing Director & CEO, Amplus Solar. The panel was moderated Urvi Shrivastav, Editorial Lead, BW CFO World & BW Businessworld 

Defining what ESG means, Sanjeev Aggarwal noted, “ESG is about being good to the society at large. We have to find the balance between all the three pillars of ESG and make it work. People who have been working for the society are favoured more by the investors.” However, balancing ESG with-profits is a challenge for companies. “Placing sustainable investing as a thematic proposition is needed, and make sure it does not become another label. The key to achieving UN SDGs is access to capital” Noted Rai.  

Every investor must keep a few pointers in mind before they pool in their money, “From the corporate angle, we should adopt ESG as fast as possible, because the recently launched funds usually have an ESG mandate.” Said Sanjeev Aggarwal. This serves as a further incentive to adopt sustainable practices.  

Investment in ESG is not limited to certain sectors alone. They trickle to verticals like software and other industries we usually don't associate with the same. Talking about this, Kumar notes, “Technology helps in figuring out why certain issues take place. For example, why are our forest covers declining. What can be done to address these issues.” 

ESG has also seen a shift in how investment is made. For example, in the energy sector, “Coal is a baseload plant, it can run 80 percent of the time in a year, we are substituting that with renewable which can run 20 to 30 percent times a year. The intermittency of coal is a big challenge.” Said Shrivastav. However, we are witnessing a gradual shift to more renewable sources as against coal.  

You can watch the panel here:

https://youtu.be/eKcFPg5SpyM