COVID-19 and Sustainable Businesses

11th October 2020

Author(s) – Praveen Anant

ESG Funds and sustainable businesses are showing the signs to emerge stronger from the COVID-19 pandemic.

Sustainable investing has made its place in the market after tried and trusted safe havens, such as gold or long-dated secured bonds, during time’s recent crisis. Research by JointValues found that the companies in India which performed well during the COVID-19 crisis have policies and systems addressing the ESG perspectives.

Trends are indicating that ESG funds shall receive batten from crises time investment destinations as soon as India start coming out of the COVID-19 and sustainable companies shall emerge stronger from the pandemic. By picking the growth and providing returns up to 17% in Q1 2020, ESG focused funds in India are corroborating that backing those companies which have strong environmental, social and governance (ESG) policies and sustainability outlook is a right decision to make.

Many companies in Asia-Pacific have already started disclosing their ESG performance and impacts using different standards and frameworks including TCFD. Decision-making for investment also needs next level information that how climate change and ESG aspects are influencing the market and business ecosystem including regulations in Asia-Pacific that would impact the financials of a company in short, medium and the long term.

JointValues Framework for Evaluation of ESG and Climate Change

JointValues framework for evaluation of ESG and Climate Change related disclosures by the companies is aligned with TCFD and calibrated for the business ecosystem and regulations in Asia-Pacific. JointValues evaluates index companies for their ESG and climate change disclosures and provides information in the public domain and classified reports to investors for empowering better investment decisions.

Benefits for Corporates

Better access to data will help companies explore underlying system-wide exposures and opportunities and can now more effectively measure and evaluate their risks and opportunities within physical boundaries and value chain. Moreover, companies can now help their investors and other stakeholders assess to what extent they are considering and managing climate-related risks and ESG factors and hence have an increased chance to benchmark and stand out from their peers.

Benefits for Investors

Investors will be able to gain deeper insights into the risk and opportunities facing businesses they are investing in and accordingly can prioritize their engagement strategies. Secondly, they will be able to improve the investment outcome in terms of return enhancement or risk reduction. On the whole, they will easily be able to identify leaders and laggards when it comes to preparedness for transition to a low carbon economy. Lenders, insurers and underwriters will be better able to evaluate their risks and exposures over the short, medium, and long-term.

About the Author:

Praveen Anant

Pro-Bono Advisor (ESG and Business Development)

Praveen is an ESG and Business Excellence expert with over 20 years of extensive experience of working with corporates. With master’s degree in Environmental Science and Engineering and a bachelor’s degree in Laws, he brings experience of management systems and non-financial disclosures using GRI standards, SDGs, UN Global Compact, IFC E&S Standards, World Bank’s Environment and Social Standards.