Socially responsible investing is more than a feel-good investment as they can generate long-term returns. Investors should seize the opportunities with climate change.
Anand Mahindra, Chairman of the Mahindra Group, said in an interview with State Street Global Advisors that there has been a false choice between profit and sustainability.
“The fact is that sustainability can create wealth,” Mahindra told the World Economic Forum recently. With trillions of dollars worth of climate-related business opportunities over the next two decades, Mahindra argued, “we need to keep drumming the message that climate change is in fact this century’s biggest financial and business opportunity.”
He has been putting his money where his mouth is as the Mahindra Group is incorporating sustainability into its long-term business strategy.
“My approach to climate change has always been positive for three reasons: it’s good for my country, it’s good for our businesses, and we owe that kind of constructive approach to future generations,” Mahindra said.
Mahindra explained that businesses can create a ripple effect that cascades change like a pebble dropped in water. India has been committed to the Paris Agreement, and he believed progress can accelerate exponentially through the synergy of business and government working together.
The Mahindra Group has investments in many green businesses, including electric vehicles, shared mobility, renewable energy, micro-irrigation, waste to energy, green buildings, and so on. Developing new technologies and leveraging these innovations can create new businesses and a huge opportunity. For instance, Mahindra’s farm business has a multi-pronged approach to making agricultural technologies available based on advances in artificial intelligence, big data, robotics, the internet of things, drones, and autonomous machinery.
“Many of the business opportunities we see are driven by the need to promote what we call ‘alternativism,’ that is, creating alternative low-carbon solutions that people want to adopt. We know from our surveys that an overwhelming majority of people in India, upwards of 80 percent, are aware of their impact on climate change and are willing to take climate-friendly action but cannot find feasible alternatives even when they want to do the right thing,” Mahindra added. “That is where businesses and policymakers can work together to help people adopt low-carbon alternatives with practical solutions.”
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