Ep. 246: Sunil Deshmukh and Sandhya Sriram - CFO Views on India's ESG Evolution

Tune in to the latest episode Count Me In, where host Adam Larson
brings you an engaging conversation with some of finance's
leading voices in India. We're thrilled to feature Sunil
Deshmukh, IMA’s Chair Elect boasting over three decades of global
business management expertise, and the astute Sandhya Sriram,
Group CFO of Narayana Health, renowned as one of India's Top 100
Women in Finance. 


In this episode, Sunil shares his distinctive perspective on
sustainable finance’s competitive edges, such as improved global
market access and cost of capital benefits. Sandhya, on the other
hand, offers a deep dive into the real-world applications of ESG
strategies within large organizations, while addressing the
intricate issues surrounding ESG disclosure transparency.


With this powerhouse duo, you're privy to a rich discussion that
spans everything from the transformative ESG initiatives at
Narayana Health to the visionary roadmap laid out for sustainable
finance under India's G20 presidency.


Don’t just listen, be part of this enlightening session. Whether
you're a CFO grappling with ESG strategy, or simply intrigued by
the evolution of sustainable business practices, this is an
unmissable dialogue loaded with experience and insight. Plug in
and join us for a compelling narrative where finance and
responsibility converge.


Full Episode Transcript:
< Intro >


 


Adam:           
Welcome back to Count Me In. I'm your host, Adam Larson, and
today we're diving deep into a topic that's reshaping the
corporate landscape in India, ESG, or Environmental, Social,
Governance, factors and their growing influence. We have two
esteemed guests joining us. First, Sunil Deshmukh, who is IMA's
chair-elect and an expert with over 30 years of global experience
in business management. Also, we have Sandhya Sriram, the group's
CFO for Narayana Health, and she is among India's top 100 women
in finance.


 


In this episode, we're not only looking at the current
regulations and the evolution of reporting requirements. But also
how Indian markets are responding to the pressing need for ESG
integration in risk management and long-term sustainability.
Sunil will highlight the rewards tied to sustainable finance, has
enhanced global reputation and reduced capital costs. While
Sandhya will shed light on the practical challenges and
opportunities like achieving transparency in ESG disclosure, and
leveraging sustainable solutions through startups.


 


Get ready to impact the complexities and innovations within the
world of ESG, with insights from the CFO's desk. As the G20 turns
its eyes to India for sustainable finance directives, we, too,
focus on how Indian companies can translate these directives into
competitive advantages. Let's get started.


 
 < Music >


 


Sandhya and Sunil, I'm so excited to have you both on the
podcast, today, as we talk about ESG, and especially ESG in the
Indian market. And to just jump right into the conversation, how
would you describe the importance of ESG integration, within
financial strategies for companies operating in the Indian
market?


 


Sunil:           
  Thank you very much, Adam. A great question, very
relevant question to the Indian market conditions. Before we get
into the formal discussion, I would say that the concept of
triple bottom line was already existing in the world before ESG,
which was coined by John Elkinton in 1994. Where we used to talk
about 3P's, Profit, People, and Planet. I would say that ESG is a
formal expansion of that concept, which has come into the
existence.


 


Now, ESG is in existence in India, I would say right from 2011.
Indian Companies Act Department or, Ministry of Corporate
Affairs, as well as the Securities and Exchange Board of India,
have been coming out with different regulations, different
advisories, guidelines, and some reporting requirements by
Securities and Exchange Board of India, on this topic. 


 


Now, you asked me the question about the importance of ESG in
financial strategies. I would say that in today's world, almost
all companies in their financial strategies start with a concept
of risk management first. And when we talk about the risk
management, one of the most important strategy that comes is the
sustainability. Whether your business is going to be sustained
for a longer period of time or not. And there comes the ESG,
which is of course sustainability pertaining to environment, risk
relating to the environment, risk relating to the social, which
is typically the people. And, of course, the governance, which is
more of a compliance risk based on the requirements of the stock
market or government regulations, and all those things. 


 


So I would say that most of the companies start with integrating
the ESG in their risk management strategy, and from there they
take it. And, in today's world, ESG has become very important not
only from a financial strategy point of view or a business
strategy point of view, but also accessibility to the capital. If
you want to access the capital at the world level or global
market, and if you want to have a cheap capital or affordable
capital as compared to the market prices, I think sustainability
and ESG is going to play a very important… 


 


ESG strategy integrated into a financial strategy, will help the
companies have a competitive advantage as compared to their
competitors. It will also help the companies to have a long-term
sustainability strategy. And we also talk in finance domain, that
every single business is supposed to have a going concern concept
or is a perpetual continuation.


 


So from that point of view, ESG will help companies to look into,
naturally, how long the business strategy is going to sustain and
stabilize. So long-term aspect of ESG is also going to help the
companies in their financial strategy.


 


Other small things, or other very important but small things,
which are helping companies due to ESG is talent retention. The
today's generation Z employees, they don't want to work for
companies which are not following the people strategies or
governance strategies. So talent acquisition and talent retention
is one area.


 


I would say supply chain resilience. In today's world, the Indian
companies use global supply chain. We import a lot of raw
material. So if we have a sustainability strategy, in the global
supply chain, that's also going to help the companies. And,
obviously, the last but not the least is the stakeholder
engagement. 


 


And when I say stakeholder engagement, it could be your
customers, it could be your suppliers, it could be your
employees, it could be government, a municipal corporation, and,
of course, shareholders, investors of the company. All these
stakeholders are looking at ESG as a strategy from a long-term
continuity, as well as comprehensive success formula for the
company.


 


Adam:           
Now, I think that's an amazing overview of where to look at
things from a 10,000-foot point of view, to see how everything's
working within the organization. Now, Sandhya, as a CFO, how do
you perceive your role changing and developing, especially, as
you try to implement these strategies and some of the things that
Sunil talked about?