[Green is the new gold: Investors flock to sustainable opportunities in 2024]
India, in alignment with developed nations, is ramping up efforts to promote sustainable economic growth. New regulations such as the Energy Conservation (Amendment) Bill 2022 and the Business Responsibility and Sustainability Report (BRSR) have been introduced to propel this shift towards sustainability.
The Energy Conservation Bill focuses on mandating the replacement of fuel-based energy sources with renewable alternatives like green hydrogen, biomass, ethanol, hydro, and solar. This move targets industries and large commercial and residential buildings to transition towards cleaner energy sources.
On the other hand, the BRSR requires listed companies to report on their sustainable contributions across various factors including governance, environment, social impact, customer relations, supply chain practices, and human rights.
This push towards sustainability in India is creating attractive investment opportunities for local businessmen and investors. Many businesses are recognizing the significance of sustainable practices that align with international agreements such as the Paris Climate Agreement and the United Nations Sustainable Development Goals.
Despite challenges posed by the global pandemic, the world is not on track to meet its 2030 Sustainable Development Goals targets. However, sustainable investments are gaining traction, with an estimated USD 4.2 trillion annual investment needed to achieve the SDGs.
In India, the younger generation is actively engaging in responsible investing, driven by a desire to address climate change and promote sustainable development. This shift presents unique opportunities in areas such as public transport, renewable energy, green construction, agriculture, and data analytics.
High-net-worth individuals and family offices can play a crucial role in supporting sustainable investments by gradually increasing allocations to companies focusing on reducing their carbon footprint.
As investors navigate the evolving landscape of sustainable investing, wealth managers and family offices can provide valuable guidance in assessing ESG commitments of potential investments and monitoring their adherence to sustainability goals.
Creating a sustainable future through responsible investing is becoming a priority for many, emphasizing the power of capital allocation in driving positive change towards a more sustainable world. Let’s make FY24-25 the beginning of a transformative journey towards a greener and more sustainable future.
