Asia is now leading global economic growth as a result of the impressive GDP growth in its countries. In terms of Demographics, 60% of the world's current population lives in Asia, the region also has the highest population growth rate. Consumers will have more power and simultaneously demand both premium and value-for-money goods and services. The consumer of the future is likely to be far more discerning in everything; from what she consumes (personalized, localized, healthy, sustainable) to where she shops (omnichannel, shopping at her convenience) to how she is influenced by companies or brands.
At the same time, energy demands are reaching new thresholds. This requires the infrastructure fraternity to carefully design and develop services keeping the environment in mind. Innovative and sustainable power generation methods the need of the hour to meet societal and economic demands. In fact, one of the few geographies having the biggest potential for sustainable development, is Asia. Governments in Asia have been consistently improving their regulatory frameworks and capabilities for ESG risk enforcement.
Asian nations like China, India, Malaysia, Indonesia, Taiwan, and Singapore have modified their legal frameworks and public policies to encourage businesses to consider cultural, socio-economic, and environmental factors when conducting business. India is no different. Assets under management (AUM) with an ESG focus grew 2.5 times, from $275 million in FY20 to $650 million in FY21.The opportunity to do it the right way is now a preferred path for most businesses and this evolution is driven by a strong confluence of forces. As someone who has a passion for sustainable growth, Kanchan Mishra is one such force and an inspiration, with her global company, SustainoMetric, in 2017.
Headquartered in Amsterdam, SustainoMetric has its operations in India. The firm offers on-demand ESG research to investors, ESG databases and index providers, as well as thematic rating agencies, and businesses. ESG is gaining grounds globally leading to an increasing demand for responsible investment research. Kanchan sheds light on the same, explaining, “ESG research is cyclical in nature. Businesses publish their sustainability reports every year and hence the research needs to be updated yearly. It is very time consuming, and seasonal in nature.
Once the research is completed, businesses have idle analysts for the remaining part of the year until the next report. Hence, our model of providing trained ESG analysts to client is time tested and has been working really well”. The firm stands out from the competition by its purpose. Unlike other businesses that are incepted to generate profit, and then manage their ESG risks, SustainoMetric was created to have a positive impact through its operations and business.
Moving Beyond Traditional ESG To Secure A Sustainable Society
While setting up operations in India, Kanchan’s vision was driven by two pressing needs of the time. She had foreseen the growth trajectory that Responsible Investment was set to witness. Not only did it provide a great business opportunity, but also a chance to spread the good work. The impact SustainoMetric has in its global operations was a motivation for Kanchan to bring the good efforts to her hometown, Varanasi (India).
Kanchan began with a focus on bringing employment opportunities to women in the tier 2 city; where women with children who have great potential are hurdled with domestic responsibilities. As Indian society would have it, women are often required to sacrifice their career to take care of their children and family as a full time job. SustainoMetric has tried to bring in a light of hope to such women. Secondly, Kanchan took heed of the uneven development in India.
While the metropolitan cities swoop all the investments, certain smaller cities witness little to no development. It’s a no brainer that this becomes a primary reason for significant population migration. People from smaller cities leave their homes and parents to work in larger cities where opportunities are in abundance. This required to change. Consequently, Kanchan brought SustainoMetric back to her hometown, to enable younglings to not just make a fruitful career, but to also stay close to what matters the most; family.
Making Manifold Impacts
Evidently, SustainoMetric has made significant impact by educating and helping society realize the importance of sustainability. The company promotes sustainable investments and incorporates green practises into its business operations in a multitude of ways. “Sustainability is important to everything we do, the way we do it, and the impact we have”, adds Kanchan. SustainoMetric brings its impact, primarily via three channels:
• By services – The organization helps investors make informed sustainable decisions
• By operations – SustainoMetric brings employment in a tier 2 city; focuses on women employees; adopts sustainable employment practices; sensitizes youth on greenliving and brings the foreign yet salient concept of sustainability to a modern village such as Varanasi.
• By philanthropic activities – SustainoMetric sponsored the education of four girls and committed to fund their education till university. The organization has aggressive plans to expand this initiative by enrolling more girl child.
Quality At The Centre
Kanchan gives an in-depth insight about the challenges that the industry essentially faced before SustainoMetric’s entrance into the scene. She recalls ESG research and data being criticized for over a decade about its quality, and reliability. Even as companies began to invest in ESG research, they picked the offshore model of having team of analysts do the job. Greenwashing was a concept that was taking prominence. Investors suffered from poor quality data while the users or different stakeholders have been criticized for the same. One of the reasons may have been major negotiations on the research cost thereby compromising on its quality. This is where SustainoMetric makes the giant leap of placing quality at the centre and undertaking lesser clients so as to deliver quality and not quantity. “I think our emphasis on training has set us apart from the competition since our inception as an organisation. While conducting research, we never attempted to get results quickly because doing so would have jeopardized our dedication to "Quality". Therefore, since the beginning, we have focused on training our analysts. That is why our analysts are best in the market, and are much more knowledgeable than their peers”, informs Kanchan.
How Sustainometric Stands Apart?
• Singular focus on Sustainability–Unlike other players in the market, SustainoMetric is not diversified and focuses on Sustainability research only, doing better by focus.
• Unparallel research quality–SustainoMetric’s focus on quality has been intact and has led to many satisfied clients.
• Wide Research coverage – The firm covers all sectors, global companies universe, language capabilities, all ESG themes, asset classes including equities, fixed income, and real estate.
A Vision For A Responsible World
ustainoMetric has truly led by example. Spreading the word about sustainability began from within the organization with the youth working towards a united goal. The database providers, as Kanchan explains, use data from SustainoMetric to publish reports on companies, in turn helping investors to make informed decisions. The firm has sensitized the market.
Had every company focused on solving current world’s problems with its offerings without damaging the environment, we would not need ‘Responsible investment’ as a concept. Since, companies are formed with profit motive only without evaluating their product’s and operation’s impact, we exist to assist investors with the research required to support their investment decisions.
“Had every company focussed on solving current world’s problems with its offerings without damaging the environment, we would not need ‘Responsible investment’ as a concept. Since, companies are formed with profit motive only without evaluating their product’s and operation’s impact, we exist to assist investors with the research required to support their investment decisions. We see a world, with sustainability at its core and moving away from the idea of build, use and throw. This is our vision”, concludes Kanchan.
Kanchan Mishra
Kanchan is the Executive Director at SustainoMetric. She has about two decades of experience in Responsible Investment research and advisory across various ESG strategies, project management, and fund managers on ESG integration. Kanchan has worked in multiple sectors and themes such as key commodity supply chains (palm oil, soy, meat), financials, and human rights. She has also extensive experience in Responsible Investing policy and strategy development. Leveraging her years of experience in responsible investing research, she founded SustainoMetric in 2017. Prior to SustainoMetric, she has worked with various companies such as Profundo, Robeco, and Evalueserve in varied roles around responsible investment research and advice. She holds a Master in Business Management in Finance.
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