Ep. 246: Sunil Deshmukh and Sandhya Sriram - CFO Views on India's ESG Evolution

< Intro >

– Welcome back to Count Me In.

I'm your host, Adam Larson,

and today we're diving deep

into a topic that's reshaping
the corporate landscape in India,

ESG, or Environmental,
Social, Governance, factors

and their growing influence.

We have two esteemed
guests joining us.

First, Sunil Deshmukh,
who is IMA's chair-elect

and an expert with over 30 years

of global experience
in business management.

Also, we have Sandhya Sriram, the
group's CFO for Narayana Health,

and she is among India's
top 100 women in finance.

In this episode, we're not only
looking at the current regulations

and the evolution of
reporting requirements.

But also how Indian markets are
responding to the pressing need

for ESG integration in risk management

and long-term sustainability.

Sunil will highlight the rewards
tied to sustainable finance,

has enhanced global reputation
and reduced capital costs.

While Sandhya will shed light
on the practical challenges

and opportunities like achieving
transparency in ESG disclosure,

and leveraging sustainable
solutions through startups.

Get ready to impact the complexities

and innovations within the world of ESG,

with insights from the CFO's desk.

As the G20 turns its eyes to India
for sustainable finance directives,

we, too, focus on how Indian companies

can translate these directives
into competitive advantages.

Let's get started.

< Music >

Sandhya and Sunil, I'm so excited

to have you both on the podcast,
today, as we talk about ESG,

and especially ESG in the Indian market.

And to just jump right
into the conversation,

how would you describe the
importance of ESG integration,

within financial strategies

for companies operating
in the Indian market?

– Thank you very much, Adam.

A great question, very relevant question

to the Indian market conditions.

Before we get into the formal discussion,

I would say that the concept
of triple bottom line

was already existing
in the world before ESG,

which was coined by
John Elkinton in 1994.

Where we used to talk about
3P's, Profit, People, and Planet.

I would say that ESG is a formal
expansion of that concept,

which has come into the existence.

Now, ESG is in existence in India,

I would say right from 2011.

Indian Companies Act Department
or, Ministry of Corporate Affairs,

as well as the Securities
and Exchange Board of India,

have been coming out
with different regulations,

different advisories, guidelines,
and some reporting requirements

by Securities and Exchange
Board of India, on this topic.

Now, you asked me the question

about the importance of
ESG in financial strategies.

I would say that in today's world,

almost all companies in
their financial strategies

start with a concept
of risk management first.

And when we talk about
the risk management,

one of the most important strategy
that comes is the sustainability.

Whether your business
is going to be sustained

for a longer period of time or not.

And there comes the ESG,
which is of course sustainability

pertaining to environment,
risk relating to the environment,

risk relating to the social,
which is typically the people.

And, of course, the governance,
which is more of a compliance risk

based on the requirements
of the stock market

or government regulations,
and all those things.

So I would say that
most of the companies

start with integrating the ESG in
their risk management strkategy,

and from there they take it.

And, in today's world, ESG
has become very important

not only from a financial
strategy point ofview

or a business strategy point of view,

but also accessibility to the capital.

If you want to access the capital
at the world level or global market,

and if you want to have a cheap capital

or affordable capital as
compared to the market prices,

I think sustainability and ESG is
going to play a very important...

ESG strategy integrated
into a financial strategy,

will help the companies have
a competitive advantage

as compared to their competitors.

It will also help the companies to have
a long-term sustainability strategy.

And we also talk in finance domain,

that every single business is supposed

to have a going concern concept
or is a perpetual continuation.

So from that point of view, ESG
will help companies to look into,

naturally, how long the business strategy

is going to sustain and stabilize.

So long-term aspect of ESG is
also going to help the companies

in their financial strategy.

Other small things, or other
very important but small things,

which are helping companies
due to ESG is talent retention.

The today's generation Z employees,
they don't want to work for companies

which are not following the people
strategies or governance strategies.

So talent acquisition and
talent retention is one area.

I would say supply chain resilience.

In today's world, the Indian
companies use global supply chain.

We import a lot of raw material.

So if we have a sustainability strategy,

in the global supply chain, that's
also going to help the companies.

And, obviously, the last but not the least

is the stakeholder engagement.

And when I say stakeholder engagement,

it could be your customers,
it could be your suppliers,

it could be your employees, it could be
government, a municipal corporation,

and, of course, shareholders,
investors of the company.

All these stakeholders are looking at ESG

as a strategy from a long-term continuity,

as well as comprehensive
success formula for the company.

– Now, I think that's an amazing overview

of where to look at things from
a 10,000-foot point of view,

to see how everything's
working within the organization.

Now, Sandhya, as a CFO,

how do you perceive your role
changing and developing, especially,

as you try to implement these strategies

and some of the things
that Sunil talked about?

– Absolutely, in fact, I want to
build on to what Sunil said.

Traditionally, they say CFO, ESG,

which means that maybe it allows
you to raise funds more efficiently

or maybe able to attract
a larger investor pool.

But, really, if you take a step back
and think investors are asking,

but we don't need investors to ask.

There is a lot of value in championing

the business objective
through the lens of ESG.

And here I want to take
a little practical example

of my own organization, Narayana Health.

I lead the ESG committee, for the group,

and I want to take an example
of one of our sustainability goals,

which is paper reduction.

Now, it's a simple environment
goal, one may think.

So in 2020 we were
consuming eleven pages.

Now we are consuming
five pages per patient,

and we want to have it in
the next two to three years.

But, really, a paper is not
an environment goal only.

Of course, it's good for the
environment, if you use less paper.

But it is forcing us, as an
organization, to think digitally.

It is enabling better patient workflows.

It is improving the quality
of electronic health record

because nobody can
actually write something

for the patient on a piece of paper

because we are not allowing
them to use that paper.

So, then, someone goes
on record and writes it.

When that's written, then, it is improving

the quality of data mining
in the organization,

and it's obviously improving
the digital mindset in the team.

We are starting to think
more digital on processes.

So when one may say,
"It's an environment goal;

I want to consume less paper."

But it's an organization goal.

If we want to be a digital
organization tomorrow.

We have to train our people at
grassroots, to think digitally,

and paper optimization is
leading us in that direction.

So I feel that it is very
important for finance heads,

who is typically called
a co-pilot to the business,

to understand the aspects
of sustainability that play

an integral part to business outcomes.

And we have to channelize
the organizational energy

and resources in that direction.

So we are able to achieve development

and growth in the organization,
and not just our ESG objective.

So this is what I feel the roles
CFOs can play in an organization,

to be able to champion ESG.

– Mh-hmm, yes, it takes time.

You can't just throw all these
regulations at the team

and say, "Okay, start this now."

You have to slowly build it

to build that organizational
culture to help build that.

Say, "Hey, this is something we're
going to do as an organization."

So it's not something
that just happens overnight.

And I can imagine that,
as you were mentioning that

it's not something that you should wait

for the investors to say, "Hey,
this is what we have to do."

Or wait for the consumers.

But there are some elements, especially,

when the regulatory environment
in your country is changing.

And maybe we can discuss a little
bit about some of the effectiveness

and the existive regulatory
environment within India,

in fostering the sustainable finance.

And are there any enhancements

you can suggest to help
improve upon that?

– Yes, thanks, Adam.

It's an interesting question because
effectiveness is a very loaded word.

What is effective to someone may
not be effective to someone else.

Now, as far as India is concerned,
the regulatory environment in India

has made significant strides in fostering

the sustainable finance, in recent years.

And, of course, there is
room for improvement,

nothing is perfect unless
you keep on improving.

Now, in India's regulatory environment,

I would tell a little bit more
about the existing scenario.

So we have our Securities
and Exchange Board of India,

which we call the SEBI.

So SEBI has prescribed some ESG

disclosure requirements
for the listed companies.

And these requirements have been
evolving over a period of time.

I will not go back all the
way to the year 2011,

when in India we started
talking about sustainability

through a concept called National
Voluntary Guidelines, NVGs.

That's where we started in 2011.

But I would say, particularly,
in the last two to three years,

from the year 2020, we created a concept

called Business Responsibility
and Sustainability Reporting, BRSR,

and that was prescribed

by The Securities and
Exchange Board of India,

and it was applicable to top
thousand listed entities in India.

And later on in the year 2023,
this current financial year,

what has happened is they came
out with a concept called BRSR Core.

It means Business Responsibility
and Sustainability Reporting system

for the core companies.

And they have identified some
specific types of companies,

listed companies, and they
have given a roadmap

over a period of time, in
the next four to five years.

In '23, '24, financial year 2023 and '24,
top 150 companies are expected

to give this core reporting on BRSR.

In 2024, '25 top 250 company,
after that top 500 company,

after that top thousand companies.

So Securities Exchange Board of India

is expecting that within next four to
five years, almost all listed companies

will be covered under the ESG
reporting, on a core basis.

And there are criteria, there are nine
basic principles of ESG reporting.

There are formats, and I will
not get into all those nitty-gritties

because it's very comprehensive
way of talking on that.

But where the improvement is possible

or where there are possibilities of
enhancing this effective network,

I would say one is we need to
have a uniform ESG standards

in line with global standards.

In today's world, if you see
ESG requirement of reporting

it varies in America, it varies
in Europe, and it varies in India.

So how do you bring a comprehensive,

consolidated, and uniformity
across this reporting?

That's very important because
most of the companies

are global companies,
international companies.

Their parent headquarters in
U.S. does a different reporting.

A subsidiary in India does
a different reporting.

So bringing them on a common
platform is very important.

I would also say that government can
think of providing some tax incentives

for ESG compliance, to become effective.

Because our effectiveness will also come

when companies see that there
is some financial incentives,

some benefits, like tax
holiday, or like tax incentives,

or reduced rate of tax for the companies.

I think that would help for
companies to foster more on ESG.

Also impact investing regulations
can be brought into India

in a little bit more detailed way, and
incentives given to the green projects.

We are already having
green bonds into India now.

But any project which is being invested

through a green investing or
they are able to ensure that

environmental impact on the society

or on the community is being protected.

So government can think
of giving such incentives

and benefits to new green projects

through green bonds, or tax
benefits, or tax holidays.

And, of course, ensuring that stakeholder

involvement is enhanced, at all levels.

Not only at the shareholder level, or
not only at the governmental level,

but even customer level, supplier level.

I would even say the employees
who are working in the company.

How can we ensure that?

So there can be some possibilities
of enhancement into these areas.

I think that's the right approach or
that's the ideal approach to go forward.

– Just to add to what Sunil said, I think,
in the G20, which India hosted recently,

there was a segment
on sustainable finance,

and there was a roadmap that was set out

and I was going through
that in a different context,

and I could see the depth of thinking

that has gone into putting
that roadmap together.

Of course, with all the nations, and
India also playing an important role

and really the spirit of how
this is coming together.

Many of the enablers that Sunil is bringing

maybe they'll come in different forms.

But I feel it's only a matter of time,

that there will be more
enablers that will come to play.

– That's a great point, Sandhya,
you just hit the nail, absolutely.

The India G20 presidency has put
a lot of importance on sustainability.

And we have already given
commitment to the world, at large,

that what we as India would
like to do on green gas emission,

carbon footprint, and
every single commitment

is properly drafted and
roadmap is put forward

to the United Nations, as well as the G20.

Thanks for bringing that,
Sandhya, great point.

– Mh-hmm, and that'll be the day

where all the regulations
worldwide match up perfectly.

I mean, that's a dream we can all have

when politicians can
actually agree on something.

So I think we can all look forward
to that, maybe, in the future.

Now I know that enabling these
regulations that are coming is not easy.

And, so, maybe we can discuss a little bit

about some of the challenges and barriers

that are being encountered,
as they try to integrate

these sustainable finance
principles into operations.

– Yes, actually, I want to take
a step back in the strategy itself.

The biggest challenge
today for many companies

is that they're not integrating
ESG into their core strategic vision.

It's like a compliance exercise,
or an obligation, or a requirement.

It is because a lot of effort is required

to fundamentally integrate ESG into
the core vision of an organization.

So, again, I want to come
closer home, NH, again.

So when BRSR became mandatory,

what Sunil mentioned, last year, for us,

we said, "Ok, let's not just do this
as an exercise to update the BRSR.

Let's take a step back and
see what ESG means for us."

So we worked on building that
sustainability vision for our company.

So we did stakeholder interviews,
materiality assessment.

We came up with outside-in
on what we need to do,

but somehow it was
just not falling together.

Then we got together as leadership,

did a brainstorming on what inspires
everyone to work for the organization,

and what they feel proud about.

And every member of
leadership expressed

in their own words, tremendous pride.

We have strong values, leading
governance practices,

we do work on renewable energy.

But the core of what it was for us
was our "Health for All" mission,

which is a socially-leaning
approach to healthcare.

But, then, for us it was a bit easy.

We got a little lucky that way

because we were deeply
embedded in that social cost,

even though we were
a for-profit listed entity.

But it had taken us 20 years
of building this entity

and now we discovered
it in our ESG mission.

For many organizations going that deeper

and looking into what they stand for.

How they impact their stakeholders.

How they impact their investors,
their consumers, their society,

the regulatory bodies,
and how can this impact

be positively amplified
into their ESG charter.

I think that's the challenge

that people are trying to get
to battling with, get that right.

And maybe some of the pioneers,
like the Unilever Sustainability Plan

I thought that was way ahead of its
time, and really well thought through,

across the walk of different aspects

of how the business
impacts its stakeholders.

Recently, Apple came with a very
beautiful video, very creatively done,

about how they are
looking at sustainability,

and why it's so important to them.

Now, that requires an
organization to go deep inside,

find that soul, and that
exists in every organization,

it's not that it doesn't exist.

But we need to find that, and that has
to help us build the ESG on top of it.

I think that's when India Inc.,

can embark on a truly
meaningful ESG journey.

– I think that's a beautiful
way of describing it.

Of how you can lay that foundation

and it can lead your organization forward.

And it's not an easy task, especially,

when you're trying to
adopt sustainable finance,

and investors may have
different feelings about it.

And how do you help your investors' sentiment

shift toward the sustainable finance,
especially if there's different definitions,

people feel different ways about it.

But it's becoming more socially
acceptable and people

are understanding the importance of it.

– Yes, thanks, Adam.

As far as sustainable
finance is concerned,

I personally think that adopting
the sustainable finance practices,

particularly, for Indian
companies, at a global level.

There is a huge, or I would
say numerous opportunities

of a competitive advantage
for indian companies.

As India is one of the fastest-growing economy in the world.

And when economy grows,

you need access to the capital,
quick access to the capital.

And this sustainable finance will help
India, or Indian companies, or India Inc.,

to get access to the global
capital, as quickly as possible.

But not only accessibility, I will
also say lower the cost of capital.

The cost of capital is the cost at which
you borrow the money in the market,

in the financial market.

And, of course, as you may
know the cost of capital,

or borrowing the cost
of capital in global level,

and in India, there's a huge difference.

There is no parity at that.

So sustainable finance
will help Indian companies

to borrow the money at lower cost
of capital, that's a huge advantage.

Other advantages I look at
is it will help companies

to improve their credit rating.

Nowadays, to borrow the money,
you need to get a credit rating.

And one of the criteria
applied in credit rating

is about your ESG strategy, your
sustainable finance strategies.

So if companies follow sustainable
finance initiatives or strategy,

they are likely to get a better credit rating.

Of course, in turn, it means that, again,
you will get a lower cost of capital,

and a higher accessibility to funds.

I also see that it will enhance
companies' reputation,

in the global market.

And reputation today is one of the
very important aspect, we all know.

Not only from ESG point of view,
but from any other point of view.

So sustainable finance can
enhance companies' reputation.

You get access to the global market.

Some of the markets today,
we are not able to reach out to

because we are not
following ESG practices.

For example, European Union has
got very stringent requirements

as far as supply chain is required.

So we will have access to those markets,

once we follow the sustainable

finance facilities,
sustainable finance initiatives.

Risk mitigation will happen much
better than it used to happen.

We will have more
competitive differentiation.

Indian companies will be competitive
enough to global companies,

by following the sustainable strategies.

And many global players prescribe that

when they buy the material or
when they supply the material.

The supply chain and entire value
chain should be ESG compliant.

So there also we will get opportunities.

I also see that there are a lot
of partnership opportunities.

Of collaboration and various companies,

various, I would say finance houses,
they will come and partner with you

if you are following the ESG
sustainable finance strategy.

But one of the very important thing I
see in today's world is that innovation

and India is world startup
capital, in today's world.

We are creating more unicorns than
anyone else is creating in the world.

And my panelist, Sandhya, lives in
the city where the highest number

of unicorns are being created.

So from that point of view,
for the startup economy,

the sustainable finance
is going to help us a lot.

And I made a comment last week,

when I was talking at one
of the CFO conference

that there was a quote by Peter Drucker

called "Culture eats
strategy for breakfast."

So culture is more
important than strategy.

But, in view of this, I would say that
culture eats innovation for breakfast.

What I'm trying to say is
that a culture of innovation

is very important in an organization.

And if you have a culture of innovation,

definitely, you are going into
get into the sustainability

because environment,
social, and governance.

– I like that "Culture eats
innovation for breakfast"

and how important all those
things to build up there.

And, so, when you're thinking about things

like disclosure in an ESG, with regulations.

How can companies ensure
transparency and build that trust,

that Sandhya you were talking about,
and how can we improve upon that?

To make sure that we're being
transparent and being open,

but also being successful
as an organization.

– So an ESG scorecard that
was released by Crisil, in 2022

showed the performance of companies

on the environment
parameter was weaker,

compared to social and governance.

In India, one in five companies reported
their Scope 1, Scope 2 GHG emissions.

The disclosure of Scope 3
emissions was even worse.

63 out of 586 companies
published this data.

Now, if you take a step
back, the biggest challenge

which Indian industries are
facing is on the supply chain side,

Sunil mentioned about supply chain.

But many supply chain
providers are MSMEs unlisted,

do not have the ability to track and
report a large number of matrices.

Deloitte had done a survey

that revealed that only 27%
of Indian organizations,

feel that they are adequately equipped

to meet their ESG strategy
and compliance requirements.

Only 15% believe that their suppliers

are prepared to comply
with ESG mandates.

Now, to all of this, there
is that additional challenge

of what quote within
quotes "Greenwashing".

There is a very interesting article

by valuation guru Ashwath
Damodaran, in one of his blogs.

Where he writes a post
about a large listed company.

He says, "They've learned
to play the ESG game well."

And added to that, "The BRSR,
is a bit of a prescriptive document,

the way it has been designed."

So it does not allow enough leverage

to appreciate the nuances
of different businesses

and more importantly, their
goals and what is core to them.

Now, if you take a step back in the West,

ESG has a very strong E leaning,
followed by G, and then S.

But for India, the order
is a little jumbled up.

Many Indian companies are
doing a lot on the social space,

followed by environment,
followed by governance.

So we need to contextualize our ESG
measurement to the country's needs.

And somewhere our weightage,

and line of what we want to go
after have to play that balance.

But, finally, you can say
a lot of things like this,

but it really comes down
to purpose and intent.

If the purpose is not aligned and
ESG is something on the sidelines,

or if the intent is not there.

I don't think any disclosure requirement

will be enough to get
the right perspective.

So it has to start from
within for organizations

and how they can, like we spoke
about earlier, bring their co-purpose.

Then disclosure, compliance, can fall
in place, maybe 60%, maybe 80%,

but it will start moving in that direction.

– It will start moving in that direction,

but it's going to take time to build that.

And like Sunil was mentioning,
these unicorns that are popping up.

They need to start it at the ground level

as they're building their organization,

and older organizations that
have been around for a while,

they have to change their whole culture,

so that they can develop
as an organization.

And how can you develop these,

how can you incorporate these
strategies into your organization,

to make sure that you can
build these strong foundation?

Because, otherwise, it's
going to be very difficult

to make these changes
that we've been discussing.

– We spoke about when ESGs are
tied to the core of the organization

benefits can be achieved.

The biggest place where
you are able to see this,

in India, today, is in the banking sector.

A large number of banks have been able

to channelize investments
into rural households.

One of the largest banks in India,

they've financed 7.6 million rural households, it's a win win.

The amount of credit growth that
has happened for the bank, for India,

and the financial inclusion
goal of the country,

you're able to tick all the boxes.

So some of these models
are able to create value.

So where businesses are able to
create value with a sustainability goal.

Maybe I want to take
our example one more.

We run one of the largest hospital-based,

post-graduation programs for
doctor training, it's called DNB.

We also run a very large nursing
paramedical training program.

In a country where
there's an acute shortage

of doctors, nurses, paramedics,

This investment we are making

in creating a talent pool
for the future is a win-win.

We believe it will secure our
own talent pipeline for the future,

and at the same time, we'll be able
to create talent for the country.

Most business cases in renewable energy

have a two to three years' payback.

There is a lot of investment that's
being channelized in the space.

For our own company, there
is one of our largest units,

it's 77% renewable energy.

But I'm a very happy CFO
because my power bill is halved.

So there is so much of
benefit that one can achieve.

So when we say sometimes that
government has to give benefits

to enable ESG, et cetera, it's possible
within the organization's contour

to be able to create models
that are able to create value

for the organization,
and are also sustainable.

Now, to see from a startup point of view,

Sunil was talking about the
startup capital is Bangalore

but India itself is the startup
capital of the world.

There are several startups

which have built successful business
models on sustainable solutions.

I mean, the count, the number is endless.

The areas are phenomenal,
renewable energy, of course.

But say areas such as biofuel from waste,

biomass, emission control devices,
battery recycling, air purification.

Rooftop solar for home,
it's such a big thing now.

And we always think
that India is a hot country,

tropical country, there's so much heat.

But it's really created a new wave
of companies with rooftop solar,

vertical gardens for homes
and offices, it looks beautiful.

People are now, instead of
doing interiors with fancy wood,

and color, and lighting, are doing
interiors with vertical gardens,

which is again, a win-win.

It looks so beautiful and at the
same time it's so sustainable.

Many technology solutions
have picked up from this.

For example, there are IoT
solutions for energy monitoring,

for various types of
sustainability practices,

improving sustainability practices.

So it's really a long list of opportunities,

that the space of sustainability has
created to monetize in a win-win way.

So businesses also see tremendous
value in engaging with these startups.

So I would like to conclude
that this explosion

that has got created in the Indian
context, and how we are able to bring

all of this together in our organization.

Is now becoming more a challenge of
innovation, like Sunil was mentioning,

than a challenge of compliance.

– And just to add to what
Sandhya has just said,

is one of the interesting phenomenon

I have seen of late, in the
last two to three years,

is that there are a lot of small
and medium-sized companies

who are voluntarily
accepting the ESG standards.

They're not mandatorily
required to do that.

There is no compliance
requirement for them.

But as a good startup
or as futuristic startup,

they are talking from day one that

"We want to ensure environmental, social,

and governance aspects, from day one,

when we are a small company,
we are a growing company."

And no one is forcing them.

So I really like that aspect
because, normally, what we see,

what this BRSR report, and all these
SASB, and all this compliance,

it is sort of forced upon the corporations.

Either by the investors, or by the
Security Exchange Board of India,

or by some government authority.

Whereas I'm seeing a
different phenomenon here.

On their own, the small
and medium businesses

are creating that culture of ESG, and
which is really fantastic to see that.

– That is really fantastic to see.

And maybe as we wrap up, this has
been a wonderful conversation.

I feel like we've covered so much
and given so much great advice.

If we're looking toward the future,

how do we see the evolution
of sustainable finance in India,

or even the world?

As we're looking at it
from an overarching view.

How can companies stay
ahead of that curve?

I think we've given some great advice.

But maybe we can summarize some of
that as we wrap up the conversation.

– So I think the ESG is going to
evolve very quickly, very rapidly,

not only in India but worldwide.

And one of the statements made
by United Nations, last week,

was that "We have transitioned
now from global warming

and we are now into global boiling."

This was the statement made.

Now, that is a very, I would say
a very powerful statement.

People need to understand that if we
do not take care of our environment,

what's likely to happen to us.

Evolution, on one hand, is
through forced measures,

compliance measures, typically,

which will happen on requirement
strategies, compliance reports,

and how to evolve with the new
reports and all those things.

But one of the area,
or some of the few areas

I would like to see, which may
happen based on my experience,

is board-level oversight will
be required now into ESG.

The global boards or the
boards of the companies,

they have to get involved into ESG now.

And when I say involved, I'm not
talking about the micromanagement,

but ESG as a strategy on the board.

When the board is sitting,
they need to start discussing

and overseeing what's
happening on the ESG.

That's a new way of evolving.

We need to start engaging more
and more all the stakeholders,

with whom we are doing the business.

We also have to keep on
doing the ESG risk assessment

on a continuous basis because
we may have new risks.

Covid-19 was a classic example; we
don't know what else is likely to come.

So on a continuous basis, keep
doing the ESG risk assessment,

supply chains, innovation
is required to happen.

Talent; retaining talent, acquiring talent,

who respects the ESG,
that's also required.

And, obviously, we need to start
looking into green financing,

green bonds, and all those type of things.

So I think these are some of the areas,
which will evolve over a period of time.

And, of course, technology
will play a huge role in this.

– Thank you, Sunil, maybe, I want
to take a slightly sectoral view.

Some of the sectors that
are really making an impact,

starting, of course, is energy.

The companies in the energy sector are
focusing the most on reducing GHGs,

and investing in renewable energy.

For example, Tata Power, today,
has 38% clean and green energy.

They are aiming to be 80% by 2030.

The advantage of Tata Power going green

is that the Tata Group is such
a massive group of companies,

and they are in every sector.

That means that all
those sectors will go green

because most of them consume
captive power from Tata Power,

and that really makes
a very big difference.

Similarly, the next big
sector is the manufacturing.

There are a lot of companies
which are working

on reducing pollution
using sustainable material.

Reprocessing plastic
because manufacturing

generates the most amount of plastic
and pushes in, especially, fast moving.

There's a lot of plastic that's
getting pushed into the environment,

and government has built
a good set of regulations

around plastic reprocessing.

But there's a lot of thinking and
research and innovation dollars,

that are going into finding
more sustainable ways

of delivering materials
to their consumers.

Agriculture, again, there are companies

that are focusing on reducing water use,

which is very important for a
water-scarce country like India.

Sustainable farming practices,
even improving farmer livelihood

is an important aspect
for a country like India.

So one initiative I want to call out

is the transformational work
that Reliance Foundation does.

They run a rural transformation program,

which reaches to some
20 states, union territories.

It has some 14.6 million people they've
covered as of, I think, August '22.

Now, in this they have
one part of that service

is a Reliance Foundation
Information Service.

They bring technology solutions
and help address information gaps

and asymmetry for farmers,
like agricultural farmers,

marine farmers, livestock farmers.

It provides them virtual advisory,
and there are inputs on weather,

better farming practices,
diseases, livestock management.

Now, this is like a beautiful example
of how information itself can empower

a sustainable world forward, and in
a sector which is so disintegrated,

and disempowered, and
not very affluent as well.

So last one more sector I really
want to talk about is construction.

Of course, there are hundreds
of sectors which are there,

but I want to talk about construction.

Again, there is a huge amount
of sustainable material

thinking that's going
into construction industry.

People are looking at
reducing energy, water use.

Worker safety, it's a very important aspect

because there are statutory
regulatory requirements.

But from an ESG charter, people are
going above and beyond on safety.

A friend of mine, she runs a startup

which focuses urban tech,
developing scalable startups

about livability, climate,
resilience, inclusion.

What she tells me is that
the amount of interest

that she gets from various, one is
investors, but from stakeholders,

on being associated with people who
are in these sustainable construction

has grown manifold by
several orders of magnitude.

So a lot of sectors are being inspired
to take on more sustainable ways.

The other flip side of it is if we are running

say at the rate of 100 kilometers,
the speed that is required to reach,

we want to is 200 or 300 km.

So while we can be
proud and we can celebrate

that we have come from zero to 100,

we still have to get to 300
to be able to leave

a better future for our future generations.

– Yes, just to add one small, she
raised some very valid points.

And one of the area of ESG
which Indian government

has taken as an initiative is agricultural.

And in the agricultural side,

India has taken an initiative
called India's Millet Revolution.

Millet is a type of food you may know.

And, so, India's Millet Revolution
is a movement that seeks

to increase awareness of the health
and environmental benefits of millets,

promote the traditional
agricultural practices in India,

and it will also support the small scale.

This is one of the big steps
Indian government has taken,

again, towards the environmental side.

– I just want to thank
both of you so much,

for coming on the podcast,
for sharing your insights.

I've learned a lot, and I hope our
audience has learned a lot, as well.

And, obviously, this is
a continuing conversation

that we'll have to keep having
because it's ever evolving.

So I just thank you so
much for coming on, today.

– Thank you, Adam.

– Thank you for inviting us here.

< Outro >

– This has been Count
Me In, IMA's podcast,

providing you with the latest
perspectives of thought leaders,

from the accounting
and finance profession.

If you like what you heard,
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visit IMA's website at www.imanet.org.

Creators and Guests

Adam Larson
Adam Larson
Producer and co-host of the Count Me In podcast
Sandhya Sriram
Sandhya Sriram
Group CFO, Narayana Health | CA Rank Holder | Awarded Top 100 Asia’s Power Leader in Finance | One Among India’s Top 100 Women in Finance | Economic Times Young Leader | Public Speaker | Caring Mother
Sunil Deshmukh
Sunil Deshmukh
With over 30 years of global experience in business management, Sunil Deshmukh is a C-Suite Executive, Leadership Coach, Strategy Consultant, and Independent Director. He is currently the Global Chair Elect at IMA | Institute of Management Accountants, the largest and most respected global association focused on advancing the management accounting profession.
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