Corporates getting into the areas of environment, social and governance issues makes “economic sense”, according to former Sebi chief U K Sinha. Sinha, who retired as chairman of Sebi earlier this year, also said that in order to compete with the best corporates in the world, Indian companies have to actively participate and imbibe in their culture concerns for the environment, concern for social issues. “It makes economic sense for corporates to get into the areas of environment, social and governance issues,” Sinha said at a CSR Summit and Awards function here. According to him, after the sustainable development goals framed by the UN, there was an adoption of the UN principles of responsible investment.
“In the beginning there were largely 100 investors who were member of this, today their number has shot up to more than 1,700. They are now looking at indices where issues like how the environmental concern is addressed by the corporates,” he noted. While citing the example of Morgan Stanley environment social and governance emerging market index, Sinha said between 2008-09 and today, share prices of all these indices are more than other indices. “If we can take the emerging market index as 105, the return of the ESG index is 155, so now it makes business sense, to show your concern. “Because people who are your stakeholders, they are also going to demand what you are doing on environment issues, social issues. It is no longer confined to the requirement of law or being a moral or ethical issue,” Sinha said.
The MSCI ESG indices are designed to support common approaches to environmental, social and governance investing, and help institutional investors more effectively benchmark to ESG investment performance, among others. The event was organised by industry body Ficci. Minister of State for Corporate Affairs P P Chaudhary, Charge D’ Affairs, Embassy of the Republic of Korea Lee Hai Kwang and Ficci Aditya Birla CSR Centre of Excellence Chairperson Rajashree Birla, among others, were present.