In 2024, there is a significant shift in investment trends as investors worldwide are increasingly turning their focus towards sustainable opportunities. India, along with several developed countries, is leading the way by accelerating efforts to promote sustainable economic development.
Key regulatory measures such as the Energy Conservation (Amendment) Bill 2022 and the Business Responsibility and Sustainability Report (BRSR) are being implemented in India. The former mandates the replacement of fuel-based energy sources with renewable options like green hydrogen, biomass, and solar power. On the other hand, the BRSR requires listed companies to report on their sustainable contributions across various factors like governance, environment, social issues, customer relations, supply chain, and human rights.
As the world navigates towards achieving the Sustainable Development Goals (SDGs) set by the UN, global investments to the tune of USD 4.2 trillion annually are needed. The financial industry, with assets totaling USD 379 trillion, plays a crucial role in driving these sustainable initiatives. By the end of 2022, global investments in sustainable assets had reached USD 30.3 trillion, with a notable 20% growth in non-US markets.
In India, the growing emphasis on sustainability presents a myriad of investment opportunities across sectors like industry, services, and agriculture. With a focus on factors like ESG criteria, clean energy, and climate control, businesses are aligning their practices with global sustainability goals such as the Paris Climate Agreement and the UN SDGs.
As millennials increasingly express interest in responsible investing, companies involved in clean and green initiatives stand to benefit in the long run. Public and private markets offer opportunities in various sectors including public transport, solar energy, green construction, agriculture, and data analytics.
To ensure a sustainable future, UHNIs and Family Offices are recommended to gradually increase their allocation towards sustainable investments. By working with experienced wealth managers and family-investment advisors, investors can evaluate the ESG commitments of potential companies and ventures.
By adopting a mindful approach to investing in impact-driven initiatives, investors can play a significant role in creating a sustainable future. As Peter Drucker aptly stated, The best way to predict the future is to create it. Let the fiscal year 2024-2025 mark the beginning of a concerted effort towards responsible investing and sustainable development.
