‘Drops before the rain? - India Sustainable and Responsible Investing Landscape 2017’ details the current landscape of Sustainable and Responsible Investment (SRI) and investor perceptions on the sustainable and responsible investing in India. Globally, the assets deployed with SRI strategies stands at $22.89 trillion (₹1476 trillion). The report estimates the capital deployed with SRI strategies to be around ~$30 billion (₹1,962 billion) in India.
The report ‘Value out of Waste: the USD 1.5 Billion opportunity for India’ authored by sustainability advisory firm, Sustainability Outlook(a division of cKinetics) and Industry body ASSOCHAM, provides insights into the value that can be generated from urban municipal solid waste as also the potential opportunity this represents for the Indian industry.
As per the report, composting and waste to energy present significant opportunity for generating value out of waste in the country. The report estimates the potential for processing waste for conversion into energy at around 956 MW by 2017 and likely to touch levels of 2200 MW by 2030 and 5400 MW by 2052 due to technological improvements, improved waste segregation and waste management systems. Given the high organic content in Indian urban municipal waste, less upfront capital expenditure, as well as ease of adoption in decentralized setting, composting is also expected to grow from about 26,000 TPD in 2017 to 66,500 TPD in 2052. The report also highlights the key policy, financial and business aspects that would need to be addressed to realize this potential.
Based on industry conversations, it is expected that 65-70% of the Designated Consumer (DC) units would be able to mee t the PAT targets under first cycle. By a conservative estimate, 5200 million KWh of energy has been saved due to measures undertaken by DCs under the PAT mandate. This equates into an avoided expenditure on energy of at least INR 5500 crore resulting from the measures undertaken by DCs in the PAT sectors. The actual energy savings and avoided investment cost could actually be even higher, and would come to light once the measurement and verification (M& V) of energy savings realized by the DCs is completed.
Some experts are of the view that setting data management systems in place for DCs is far more challenging than actual project implementation in some cases. There is a need for a robust data management system in PAT to ensure transparency, acceptability, measurability, traceability and verifiability.
Smart Cities’ is the new buzzword in the Indian Infrastructure and development space. While we may have an inkling of what it may represent, there is a lot of fuzziness surrounding the concept of smart cities, the benefits they may bring and particularly, the level or investment and business potential they represent in India.
To demystify the opportunity represented by smart cities, Sustainability Outlook has developed a Smart Cities Opportunity Assessment Model. This model pegs the opportunity for smart cities in India at USD 45-50 billion over the next 5 years. This opportunity primarily pertains to four focus areas - Smart Energy, Smart Transportation, Smart Water Management and Smart Waste Management. With multiple interventions considered under each focus area, smart energy and smart water management account for the lion’s share in terms of potential business opportunity in India estimated to be USD 14.4 billion and USD 23.4 billion respectively.
Energy, water management, transportation and waste management were identified as the sectors of focus for the first version of the Smart Cities Opportunity Assessment Model. These sectors were chosen since they are facing or likely to face the biggest challenges in the near future due to growing population, urbanization, increasing resource shortage and environmental concerns. Hence, the need as well as scope for improving efficiency through smartness in these sectors is also the highest.
This research study was done by the working group on sustainability disclosure and reporting under the Sustainable Business Leadership Forum (SBLF) which analyzed the changing landscape and actions by Indian businesses and their supply chain surrounding Environmental, Social and Governance (ESG) parameters found increased management of impact metrics related to ESG but the lack of disclosure of performance regarding the same. This new focus on measuring, managing and disclosing non-financial metrics comes amidst an increasing demand from global customers and investors for ESG data as well as greater regulatory interest. This work was an outcome of the work by the Indian Institute of Corporate Affairs (Policy Lead), cKinetics, Deutsche GesellschaftfürInternationaleZusammenarbeit (GIZ), and the Impact Investment Policy Collaborative (in association with the Initiative for Responsible Investment at Harvard University) who had convened a working group to facilitate a conversation about the expectations, concerns, challenges and realities surrounding ESG measurement/management/disclosure in the Indian market.
DRE Financing Decentralized Renewable Energy (DRE) based rural electrification is a rapidly emerging sector in India. Investors are just beginning to understand the business model, commercial viability, risks and opportunities that this sector presents. This cKinetics report provides a perspective on opportunities, gaps and directions for financing in this emerging sector. It is not only meant to be a primer but also serve as a resource guide. Analysis of the top 4 states in India which are most deficient in electricity supply (namely Bihar, Uttar Pradesh, Odisha and Jharkhand) reveals that there exists an immediate power requirement of atleast 553MW in around 30,000 villages which can be met through rural DRE mini-grids.The capital requirement to meet this potential demand is estimated to be ranging from USD 922 million to USD 12.7 billion depending on the scenario chosen for potential electricity consumption by rural households. In an on-going exercise through 2013 and 2014, cKinetics is leading an effort to identify pathways to bridge the apparent mismatch and gap between the supply of capital and the (known) demand of capital for rural DRE mini-grids.
Sustainability disclosure and reporting in India has received a fillip in the last couple of years. It has been driven to large extent by investors and policy makers. The Sustainability Leadership Forum has been working closely with businesses, investors, catalyst organizations and policy makers to identify the link between investment/capital flows and Environmental and Social (E&S) disclosure in India and have an integrated conversation about the expectations, concerns, challenges and realities surrounding ESG measurement/ management/ disclosure in the Indian market.
As part of the Sustainable Business Leadership Forum, we develop an annual scorecard of India Inc which analyses trends on ESG disclosure and reporting of over 120 large businesses in India – to inform investors on the ESG performance and risks of their stocks.
‘Cracking the Conundrum’ details how investors can converge to crack the key conundrum of standardization of E&S disclosure and reporting: ‘a standard will get accepted only if it has a large number of adopters, however adoption will only happen if a standard gets accepted’. As per the latest estimates developed by cKinetics, these investors (referred to as Finance+ investors) represent Rs 3 trillion ($55 billion) in India, which is 1% of the world’s total responsible capital. In addition to this, Indian and Global banks are lending Rs 4.4 trillion ($80 billion) to sectors, in which E&S factors are considered. The report makes the case that as standardization of E&S reporting occurs, investors that have adopted it will increasingly interact amongst themselves. Their Assets Under Management (AUM) is expected to grow from Rs3 trillion ($55 billion) presently to Rs5.5 trillion - Rs9.6 trillion ($100 billion - $175 billion) in 5 years and forecasted to be at Rs13.2 trillion - Rs17.3 trillion ($240 billion - $315 billion) in 10 years.
cKinetics has come out with a report “Exporting Textiles: March to Sustainability” that maps supply chain sustainability initiatives by global brands and retailers in their textile procurement process.
The focus of the report is on initiatives and targets being set by the brands and retailers for their supply chain: