Even if there are a lot of internet and cleantech companies, an ESG fund manager will still have to look at companies in FMCG or financial services or infrastructure, unless they make specific exclusions. As long as that's the case, the fund manager will have to choose those companies within these sectors that have a good ESG rating, which is not necessarily a bad thing.

Seetharaman G

Thanks, Varun. The greenwashing charge is made even globally. And there will continue to be a great deal of scepticism. It's not unlike corporate governance in India. There's a huge gap in governance between institutionally owned companies and promoter-led ones, the latter of which dominate in India.

Seetharaman G

Agree, Parag. As Nilesh Shah says at the end of the story, in a few years there will be nothing called ESG funds because all kinds of investors will have to factor in sustainability. What's happening in India is merely a reflection of the recent explosion of ESG mutual funds and ETFs globally. I guess the likes of pension funds and sovereign wealth funds lead the pack when it comes to adoption of sustainable investing, and then come large asset managers like BlackRock. On the other hand, PE and VC investors have a lot of catching up to do.

Seetharaman G

Ashutosh, emissions intensity is emissions relative to GDP, which is what we've said.

Seetharaman G

Thanks, Neha. ESG funds, as they become bigger, will force companies to think harder about their ESG credentials. But companies with large FII holdings will have to do it sooner, as pension funds and sovereign wealth funds lead the ESG conversation. And as for companies venturing into cleantech areas, that may only be possible in a few businesses. But the thing to note is, every company, regardless of what it does, will want to convince its investors it's sustainable.

Seetharaman G

Thanks, Tanmay. Even Avendus AIF was for listed companies. And it's now a PMS fund. Private investors are kind of behind the curve, though there have been reports of global PE funds making ESG commitments.

Seetharaman G

https://www.msci.com/our-solutions/esg-investing/esg-ratings/esg-ratings-corporate-search-tool

Seetharaman G

It's not restricted, Deepak. Axis, for instance, has some global stocks in its ESG portfolio.

Seetharaman G

Thanks, Gulshan. You're right, having a wide range of products in terms of pricing is an advantage. But the likes of HUL, ITC and Britannia are what they are because they have several large brands in the mass-market segment. For Tata Consumer, it's only Tata Tea and Tata Salt. And as for premium products, a company like HUL has liquid detergents–priced at 2X of powder detergents–which have achieved scale. But something like Himalayan water is a bit too niche.

Seetharaman G

This is for what's called the "in-the-kitchen" segment in India as a whole.

Seetharaman G

Thanks, Himanshu. Unfortunately, I can't reveal the source :) But the question this person raises in the article is relevant: what did Pepsi need Tata for? Pepsi knows beverages way better than Tata.

Seetharaman G

Thanks, Sundar. That's some very interesting context.

Seetharaman G