ESG focus will help drive growth for Indian technology firms .When

In line with what’s happening globally, India too is witnessing an increasing focus on ESG. Assets under management (AUM) for ESG themed funds rose to $650 million in FY21 from $275 million in FY20, a 2.5X increase. The report, ‘The Next Big Leap’ towards ESG maturity in the tech sector, said that over time, ESG could emerge as a key differentiator in large tech deals.

The opportunity is very large, said Sangeeta Gupta, senior vice president, and chief strategy officer, Nasscom. “Some of it will be embedded in the hardware or products, and some will be in services and solutions, and that’s where you are seeing companies looking to invest in and build practices in this domain already,” she said.

Further, the adoption of ESG initiatives by tech companies was being driven by certain external factors. Several large global enterprises are demanding that their vendors adopt certain ESG goals if they want to pitch for their business. There’s a clear business imperative for companies to invest in ESG, said Gupta. Further, investors are also asking startups to define an ESG strategy, which is also pushing them to focus more on adopting these as a part of their larger strategy

Gupta said that while the larger companies already had clearly defined goals and an ESG roadmap in place, it would work with the smaller firms to help them work these into their strategic priorities and start the journey towards adopting it internally, as well as creating solutions for customers. Alongside sharing best practices, she added that it was important to understand what practices would be relevant to the company, depending on its size and its business priorities.

Nasscom is also working on creating appropriate measurement metrics for the Indian market and work on how it can showcase these initiatives to make it a clear differentiator for the Indian tech industry. Some areas companies are currently focusing on include carbon footprint and green technology, diversity and inclusion and skilling and business ethics and compliance, and risk and crisis management.

Almost two years have passed since Larry Fink, the chief executive officer of BlackRock Inc., declared that a fundamental reshaping of global capitalism was underway and that his firm would help lead it by making it easier to invest in companies with favorable environmental and social practices. Lately, he’s been taking a victory lap
“Our flows continue to grow and dominate,” Fink said Oct. 13 of so-called ESG, or environmental, social and governance funds, and similar investments. On the same conference call with analysts, he added: “BlackRock is a leader in this, and we are seeing the flows, and I continue to see this big shift in investor portfolios.

What Fink did not say is that BlackRock drove a significant part of that shift by inserting its primary ESG fund into popular and influential model portfolios offered to investment advisers, who use them with clients across North America. The huge flows from such models mean many investors got into an ESG vehicle without necessarily choosing one as a specific investment strategy, or even knowing that their money has gone into one

In short, an apparent BlackRock-led rush of investors into ESG in the past two years has been something of a self-fulfilling prophecy, at least when it comes to the biggest such fund on the planet, a BlackRock exchange-traded fund that trades under the ticker symbol ESGU, according to data from BlackRock and Morningstar

A Bloomberg Businessweek investigation published earlier this month revealed that the ratings BlackRock cites to justify the fund’s sustainable label have almost nothing to do with the environmental and social impact companies in the fund have on the world