Moneycontrol Pro Panorama | How green is my investment?

Dear Reader,

The Panorama newsletter is sent to Moneycontrol Pro subscribers on market days. It offers easy access to stories published on Moneycontrol Pro and gives a little extra by setting out a context or an event or trend that investors should keep track of.

Climate change is serious business.

Ask the HSBC executive who quit after he was suspended by the bank for a speech that attacked policymakers for overstating the risks of climate change.

In a speech in May, Stuart Kirk, the head of responsible investing for HSBC Asset Management, had said that “there was always some nut job telling me about the end of the world”, in reference to the climate crisis.

It’s a line that might well be stolen from Donald Trump. The HSBC brass, however, was not impressed with the speech which was titled ‘Why investors need not worry about climate risk’.

While investors might not be losing sleep over climate change yet, they are keeping their eyes open for investment opportunities that will fetch good returns while also help save the planet.

One of these opportunities lies in electric vehicles, which are gaining a lot of funding. Last week, Reuters reported that automakers and suppliers now expect to invest at least $526 billion in EVs and batteries from 2022-26, citing a report by consultant AlixPartners.

We are seeing some of this activity in India as well. Yesterday, Mahindra & Mahindra announced that impact investors British International Investment (BII) will buy a 4.8 percent stake in its new electric vehicle unit for Rs 1,925 crore. This closely follows similar announcements by Tata Motors and TVS Motor Co.

Today, Moneycontrol also reported that Tata Technologies, a global product engineering and digital services company, has initiated preliminary steps to evaluate an initial public offer (IPO) on the back of accelerated demand in electric vehicles.

While such investments are only bound to increase, how effective are they in actually tackling climate change?

A new study by the Boston Consulting Group says that from an emission cut point of view, it is far better to invest in plant-based alternatives to meat than other green investments.

“For each dollar, investment in improving and scaling up the production of meat and dairy alternatives resulted in three times more greenhouse gas reductions compared with investment in green cement technology, seven times more than green buildings and 11 times more than zero-emission cars,” says this story from The Guardian, citing BCG.

We might not be big on fake meat in India, but our traditional achaar (pickle) is a great way to combat climate change as well as inflation, writes columnist R Srinivasan. While not quite calling for a National Pickle Mission, he says that there are important policy lessons to be drawn from traditional food practices. Read more here.

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Ravi Krishnan
Moneycontrol Pro