Socially Responsible Investing (SRI) – Is India ready to embrace the new form of investing

Conventionally, the investment focus is on firms that achieve desirable financial returns. Among the two categories of investors – the long term investors and the short term investors, the former rely on fundamental analysis for determining their investments while the latter use technical analysis for their investments.

Seldom have investors focused adequately on the environmental, ethical and social impact of the businesses they invest in.  Socially Responsible Investing (SRI) is an investment strategy that attempts to focus on this area which has been hitherto not been given the importance it rightly deserves. SRI strives to achieve the triple bottom line of

·         Monetary returns

·         Social welfare and

·         Environmental sustainability

Although currently small in number in India, investors are increasingly focusing on aligning their investing philosophy with their internal ethics and value systems. At present, SRI is driven more by religious diktats than by an enlightened consciousness of ethics and sustainability. For instance a ‘Shariah compliant fund’ desist from investing in firms that are involved in tobacco products, manufacture and sale of explosives and weaponry, sale of pork, making money from the interest paid on loans. In India, ‘Taurus Ethical Fund’ is the first actively managed Equity Oriented Shariah compliant fund that focuses on negative screening of investments.

Globally, there are funds with clear focus on investing in sustainable and ethical ventures. Increasingly Investors are focusing their investments not only to make profits but also on the firms that focus on sustainable development.

The awareness about the investing in companies that are ethically and environmentally sustainable is prevalent among the educated investors. But then educating and raising awareness among different sections of investors requires the concerted efforts from the three entities.

The first one is the government through their regulatory bodies and appropriate policies should enforce the compliance to ethical, social and environmental sustainability.

The second entity is the investing population. This could be Private Equity players who could divert their investments towards companies that are Environmental, social and Governance compliance – like investment towards renewable energy, alternate fuels, and clean development mechanism, energy saving equipment, green technologies, carbon finance, societal development through microfinance and the like. Mutual fund schemes which have the theme surrounding the ‘ethical investing and environmental sustainability’ improves and forces the companies to comply with the acceptable standards. For investors who would not have access for the information about the companies regarding their compliance to ethical and environmental sustainability, Standard & Poor's, CRISIL, and KLD Research & Analytics (the social and environmental research firm), early in 2008 together has announced the launch of the S&PESG India Index -the first index of companies whose business strategies and performance demonstrate a high level of commitment to meeting Environmental, social and Governance (ESG) standards.

The third and the most important of all are the companies themselves. The companies should have their values and policies that enhance the environmental sustainability, societal and community development. Tata Steel is one such company that proves the companies can do this with their extensive societal and community development initiatives taken up at Jamshedpur. Thus the companies can now have their attention towards investing not only to make money or sustainability but money and sustainability.

Socially responsible investing would en-route our country towards sustainable development along with good financial returns.

New Lease of Life

Absolutely! A new lease of life; Arrival of new batch. After a spectacular summer show (summer placement) put up at Bangalore, I was returning back to this beautiful secluded place. The new batch had already come. The word had spread far and wide that this batch is far more superior in terms of good looking angels even before we reached the place. “Good” news spread faster than light which defies the law of physics that light travels faster than sound. We heard it before we see. Our expectations did not die a damp squib as our big new release of flying “Kites”. Our heart was inflated with desires and dreams as we reach the premises. As a traditional exercise, the new batch list was hanging loosely on the notice board. Our eyes were screening through the list to look at the number of distaffs (women). Brain being doped responds quicker than we do for our exam skimming of text books. Good.  Hey dude, this name looks like she belongs to my place. Great da. Enjoy talking to her. Strategy evolves here and works better. Everything we read we practise in vying for attention. Quick glance, tactical planning and right strike make you a true strategist in the rat race.

All said and done it’s a refreshing new batch. It’s always been a pleasure for us to offer help or guidance and sometimes much more than that. Somehow or somewhere the link is established between some of our guys and the new batch. They belong to same school, same college, same company, distant relation and so on and so forth. The work is done easier. Thank God. Guys and Gals: Remember that people belonging to some great school are given due importance by our summer recruiters. I have no idea how many people are blessed with this. Anyways, Forget it. It brings nostalgic feeling about our fresh days in the campus. We heard phrases like Wagah border, Devil’s corner, Bim Street, Eastend Garden and Marine drive. What the heck are these? Some shopping malls, ice cream parlours, eating outlets etc... ?? Realization comes hard. We don’t have any nice hangout spots in Trichy and these are names given to places within Hostel area.  Sincere thanks to the guy (or was it a gal?) who had come up with the names.

Our friend is very right in naming the partition between girls and boys hostel as Wagah Border. A security guard is always at the gate, whistling every two minutes of and intruding into our sharing howdy with the girls. Kill you, man. It’s irritating listening to those whining whistles (except in the football match) when we are talking to someone whom we like very much. The bordering or fencing is just to fool outsiders. We the people across the borders are what we are. We would never draw border to restrict our expressions or whims and fancies. We will indulge in whatever you tell us not to do. I don’t know I have always felt enjoying doing against wishes of restrictive minds. Never mind consequences. I hope the new batch would also cherish these moments in here. Devils’ corner is another lively chat place. It’s all dead now. Has it been shifted near Wagah border so we don’t miss anything?  Marine drive is hell of place of freedom. It’s like living in the other part of the island.

Frantic activity in the first trimester should keep new batch busy all the time. We need to shoot down all these Faculty members. All convoluted minds, ha.., being themselves students once (some even in this very place); they are intent on tormenting us. It’s a challenge but we always are the winners – either they recede or we proceed! The fun part is the group formation in the first week. It’s just an innocuous trap set by them, ostensibly to test our ability to cope with unfamiliar people and unknown parameters. Whether you get your friends or loving members in your team does not matter. It’s more about the objective to be achieved. Don’t ponder over missing members but be wary of what you miss with the existing members because of the thought. I would love if she had been in my team I will relish every moment of team work. Lest you start letting your imagination fly ...I am talking about collective team work – not a two member work.

They say BIM has always given a degree, a naukri and a chowkri.... Couples and pairs are common trends of lifeline in BIM. Without this we are disgracing our BIM culture. I had made my attempt to keep up the culture. I hope some real work is happening around with the new batch to keep the culture alive. Life is beautiful and don’t mess up too much into this ephemeral relationship. Just a caveat. What we are...we are beings bound by circumstances which sometimes does toss away our emotional stability. 

Clubs and committees activities and their recruitment are exciting and entertaining. We have glanced through the new faces and their names and decided that who should be in our committee. The big fight happens on the final meeting with STC to choose upon the people for the committee. Not many of the ‘fairer’ gender know of the battles that happen between committees to rope one in.

With copious servings of delicious sweets and savouries (under the name ‘Treat’), we silently pass on the mantle of running the committee to the hands of the fresh and able members and relieve ourselves of the associated obligations. Isn’t everyone bestowed with some rare talent? Or do we call it distinctive advantage? Thanks to KC, most of these talents got displayed during the Fresher’s party night.

Some of the juniors with whom I had discussions (my discussions are rather rare though – my friends ask me to improve!) are a bit too serious. They always seem to centre on ...What should we do? What are the companies that come here?  I am interested in this, in that and what are these committees. (Holy God! Wonder why they take themselves and life so seriously! ). Our psychology works that way. We are curious and inquisitive until we find what it is. I doubt if we could carry on with the same momentum throughout (I know I failed). That’s the reason we keep needing fresh blood to rev up the dulling engines...

Look at this place as a platform to broaden your thoughts (and opinions), network and enjoy growing up. Do study to build on your inherent strengths and address your weakness. But, don’t reel under its pressure. I am not exceptional – well, nobody is. That’s the way the system works. You decide on your destiny – not the system or anybody else.

Good Luck Folks.

P.S. Written during BIM for junior batch.