Treeni Sustainability Solutions in association with Sonata Software conducted a webinar on 13th August 2020 on ‘Transforming ESG for a sustainable post-COVID world’, with an elite panel of speakers consisting of -

• Namita Vikas. Founder & Managing Partner, auctusESG LLP and Senior Advisor, Climate Bonds Initiative
• Arvind Bodhankar, Jt. Executive President & Chief Sustainability Officer, UltraTech Cement
• P.S. Narayan, Global Head- Sustainability and Social Initiatives, Wipro Limited
• Moderator: Anil Ghelani, Senior Vice President, Head of Passive Investments & Products, DSP Investment Managers

The key takeaways from the webinar were:

The need to transform ESG in a post-COVID world to drive enterprise resilience- Enterprise growth and resilience will go hand in hand, no matter the industry. For example, keeping rising costs of many Indian insurance leaders have altered their long term growth strategy to focus on the 5 R’s: resolved resilience for maximum returns, with a reformed, reimagined sustainability goal. Enterprise leaders need to recognize the S and G factors of ESG while ensuring business growth. The vulnerabilities and health risks posed to workers are the most critical focus areas to confront now, especially considering the layoffs due to quarantines, lockdowns, and remote working.
“There is an almost 90° shift in the way business activities are conducted. Economic sustainability has become a priority. Many companies in India are still struggling to kickstart operations again with stringent permissions. How fast they are able to bounce back with redefined ESG strategies is how I define business continuity, and this will depend greatly on their relationships with suppliers and customers.”

Arvind Bodhankar

Transforming ESG in line with new-age workforce management- In a poll conducted during the webinar, 87% of the audience voted that the COVID-19 pandemic has acted as a tipping point for ESG investments in the corporate world. While most large and small enterprises already have environmental goals in place, we will now see a renewed focus towards the social and governance front. The expectation from the companies on the social front has become more granular and specific- like focus on the parity of contract workers with regular employees. This ensures a positive pressure on the companies. Cybersecurity, the nature of differential benefits for permanent and contractual employees will be a focus for a lot of companies. On the environmental front, a rebound crisis is expected that will overshoot emissions and other targets. That is when the collaborative governance challenges and tradeoffs will need to be managed.

Investor expectations from corporates in a post-COVID world- Climate change itself has been an $8 trillion dollar investment opportunity for enterprise leaders. Now, more than ever, it makes business sense to focus on developmental finance, since ESG has been the forte of developmental finance institutions. Capital markets for ESG funds will definitely rise in the near future. 55% of our webinar audience also believed that in the next 10 years, mutual funds will become ESG funds. The companies that have followed holistic ESG frameworks have continued to thrive and grow despite the pandemic and showcased a strong resilience against COVID-19. Having people who are well versed with ESG risk analysis on your team is beneficial in the long run - this is an important focus area in terms of building human capital. This is where frameworks like TCFD (Task-force on Climate-Related Financial Disclosures) come into play, as they clearly highlight the efforts that need to be taken, the strategies that need to be charted out, and what kind of disclosures to adopt.
“ESG index funds have outperformed their conventional counterparts this year since social issues have arisen during this pandemic! ESG related assets in India are valued at more than $30 bn. We need to look at the opportunities more than the risks. More and more investors are talking about the long term sustainability goal, and we will see the effects of this play out in terms of financial investments.”

Namita Vikas

The importance of Research and Development- Manufacturing industries contribute the most to the carbon emissions generated worldwide. A critical focus on research and development for these industries will have to be undertaken to find environmentally friendly substitutes - this is almost a matter of their survival, especially for the cement sector. Moreover, R&D should also focus on generating true, measurable value for all stakeholders. Improving the energy efficiency of data centers has become critical for industry leaders in IT. There is a lot of research being undertaken on that front, but multiple levers have to come together to address this problem. There’s a lot of scrutiny on tech companies to get this right as well, and this pressure will drive industry leaders to take more rigorous steps in order to not let these non-financial risks affect business scalability.

Reporting and Disclosures for transparency- Disclosures will be an important tool to maintain transparency. Whether it is adhering to the Dow Jones sustainability index, Energy consumption indexes, or sustainability reports, communicating these to investors becomes crucial. The responsibility to find better, more environmentally resilient solutions is huge, and this will drive industrial innovations. 85% of the participants in the webinar felt that ESG reporting should be made mandatory for enterprises and businesses, no matter their size, scale, or industry. This will help enterprise leaders in mapping out initiatives that can enable long term resilience.

The role of technology- Investors are always on the lookout for data that showcase the overall sustainability outlook of an organization, and the different ways in which ESG is incorporated with business goals. And there is a huge dearth of this data since collecting it from different sources and vendors becomes a challenge. Only when enterprises measure and report this data will they be able to assess ESG risks effectively, and integrating an automated technology layer is the first step to manage this data efficiently
“Large IT companies, both Indian and global, have been early adopters of ESG, and most big players in this space already have environmental goals in place. However, this is not the case for SMBs. Onboarding these enterprises can be tough due to a lack of awareness on their end. A decade ago, tech companies contributed only about 2% of the global carbon footprint. Today we are at 15%, largely fuelled by energy investment in cloud, AI & ML, and digital media. Tech companies, though, have the financial and political power to take stock of this usage and be more environmentally efficient.”

P.S. Narayan

The only silver lining one can draw from the pandemic is that it showcases the importance and resilience of ESG funds. The push from investors and the evolving landscapes will compel organizations to manage their ESG risks and related data. Treeni’s resustain™, a modular SaaS-based platform automates and manages sustainability data for ESG risk and performance management, Corporate Social Responsibility, Environment Health & Safety, and Sustainable Supply Chains. The resustain™ platform is helping corporates to streamline their sustainability data efficiently, aligned with their business strategy. Get in touch with us to know more!

To view the complete webinar, click here: https://www.youtube.com/watch?v=O-iBktrrZRQ