It matters!
In today's world, Environmental, Social, and Governance (ESG) considerations are more than just buzzwords; they represent a transformative shift in global finance.
Rapid Growth
The global sustainable investment market has experienced remarkable growth, surpassing USD 35 trillion in assets under management (AUM) with a 38% increase since 2020.
Performance Connection
India has seen close to USD 19 billion in ESG-aligned investments in the last 5 years, with clean energy driving more than 60% share at USD 12 billion, and electric vehicle (EV) manufacturers commanding around 20%.
Investor Demand
77% of institutional investors worldwide consider ESG factors when making investment decisions, including credit appraisal and debt raising.
Sustainability Goals
India has set ambitious sustainability goals, creating vast opportunities for ESG-focused investments in the Indian market.
Regulatory Momentum in India
In India, 62% of listed companies now report on ESG metrics, reflecting a 24% increase over the past two years. Regulatory bodies in India have played a pivotal role in promoting ESG transparency.
Consumer Influence
Consumers are increasingly likely to purchase products or services from companies with strong ESG values.
Effects Of Climate Risk and Energy Transition
In the present times, climate risk and the energy transition are central to financial and environmental stability. Consider these key points:
- Energy Transition: The global energy landscape is undergoing a profound transformation, with increasing emphasis on renewable energy sources, electrification, and decarbonization efforts.
- Climate Risk: Climate change poses significant risks to businesses, financial institutions, and economies worldwide. Effective climate risk management is essential for long-term resilience.
- GHG Emissions: Greenhouse gas emissions are a primary driver of climate change. Reducing GHG emissions is paramount to limiting global temperature rise and avoiding catastrophic consequences.
- Sustainability Goals: Countries and organizations worldwide are setting ambitious sustainability goals to address climate risk and promote the energy transition.
- Investor Demand: Investors are increasingly prioritizing climate risk management and ESG principles in their portfolios, driving the need for climate-smart financial solutions.