InFINeeti Winter Edition 2021 by InFINeeti- The Business & Finance Magazine of IIFT

FOREWORD

Dear Readers, I am pleased to pen down the message for InFINeeti 2021 - the biannual chronicle of Finsoc-IIFT, the Finance Society of Indian Institute of Foreign Trade, Kolkata. This edition has been brought to you at a very important time as world has changed because of disruptions caused by Pandemic. Finsoc-IIFT, th e Finance Society of Indian Institute of Foreign Trade, Kolkata, is a student-run initiative that cultivates the students' interest in finance. The so ciety creates awareness and promo tes student-industry intera ction in the field of finance. The society’s main objective is to make the students awa re by providing them with insights into various domains of the finance industry, such as investment banking, equity research , co rporate finance, retail banking, and microfinance

Dr. K. Rangarajan Centre Head IIFT Kolkata

Dr. (Prof.) K. Rangarajan, is the

Centre Head, Indian Institute of Foreign Trade, Kolkata and Head Centre for MSME Studies, IIFT.

He is an Accredited Management Teacher (AMT) conferred by the All India Management Association

(AIMA) and is a member of several

professional

bodies

including AIMM (Australia).

He is also amongst the Board of Directors of The State Trading

The Indian financial system has fared better in the face of the pandemic, thanks to the prudent govern ment measures, bold initiatives by industry leaders and optimistic outlook of the investors towards the financial ecosystem. Will these measures hold up investor sentiments in the long run? What initiatives do we have available to tackle future events simila r to this and ensure that the different sectors in the economy behave in a more structured manner? The Indian moneta ry framewo rk has fared better even with the pandemic, because of the judicious government measures, striking drives by industry pioneers and hopeful viewpoint of the financial backers towa rds the moneta ry environmen t. Will th ese actions hold up financial backer opinions over the long haul? What drives do we have accessible to handle fu ture occasions like this and guarantee that the various areas in the economy act in a more organized way? This edition is built on the theme that encompasses shared experiences and p erceptions leading to evolving beyond existing horizons in the rapidly changing world. The magazine covers a broad range of topics from impact and relevance of ESG investing, future of alternative investmen t in India, relevance and need of risk management, current valuation of Indian capital market.

Corporation of India Limited (STC).

His expertise includes Business Strategy and Strategic Planning.

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Each issue of this magazine has helped raise the bar even higher, served the studen t fraternity a grea t deal, and helped p resent a variety of perspectives. In this issue of InFINeeti, we try to analyze some of these issu es and provide some interesting insights. We hope you enjoy reading this edition. Wishing all students, a glorious year ahead!

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FROM THE EDITOR’S DESK InFINeeti, the Business and Finance Magazine of IIFT, Winter Edition 2021

Welcome to this edition of InFINeeti. We want to take this opportunity to welcome you to our community of finance and business savvy readers. In this edition, we have tried to bring in perspectives on various topics ranging from the rising relevance of ESG investing and risk management in a post covid world to discussing the future of alternative investments and the relative valuation of Indian market with respect to global market with an aim to primarily analyze how we are trying to build back better. Every article has brought in a new idea and a richer understanding on the subject. We hope they enlighten you readers too.

Happy Reading!

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MEET THE TEAM Senior Coordinators - Finance Society, Indian Institute of Foreign Trade

Aastha Bhatt

Ekta Bihani

Pranay Agarwala

CFA candidate and an avid finance, literature and music enthusiast!

Ambivert. Purposeful. Live for the moments you can't put into words.

CFA Level III cleared, a finance enthusiast who loves to trek and explore cultures and food!

Neelay Kamath

Abhishek Aggarwal

Nipun Vij

Sports buff and a stock market enthusiast who enjoys the thrill of playing poker and chess.

DC/Marvel fanatic, cricket enthusiast, runner and a movie buff with a penchant for traveling and trekking.

Love playing cricket and reading books. Stock market buff and Formula 1 enthusiast.

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MEET THE TEAM Junior Coordinators - Finance Society, Indian Institute of Foreign Trade

Lokesh Roongta

Urvi Mundhra

CFA Level III Candidate. A wallflower who blooms for out-of-the-box conversations and whose love for nature is channelised through a paintbrush.

CA by profession, entrepreneur by choice. Lost & found traveller, love to capture what eyes don't see .

CFA Level II cleared. A kid at heart, finds solace in staring at the sky with music on.

Abhinav Jain

Mayank Agarwal

Subham Sinha

Do the best you can and don't take the life too seriously.

Go the extra mile it's never crowded.

Stock market enthusiasts loves to learn new things.

DESIGN TEAM

Navya Sodhani

Shalini

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Amritanshu Swaroop

Surbhi Saini

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CONTENTS InFINeeti, the Business and Finance Magazine of IIFT, Winter Edition 2021

Decrypting the future of Alternative Investments (Cryptocurrency, NFT, REIT, etc.) in India

ARTICLE 1 – by Bharat Kumar, Keshav Mahavidyalaya, University of Delhi

ARTICLE 2 – by Indrani Pal, IIM Bangalore

ARTICLE 3 – by Shivika Garg & Bhanu S, MDI Gurgaon

ARTICLE 4 – by Tanmay Agarwal, S.B.S.C., University of Delhi

What is the impact, relevance and way forward of the rising implementation of ESG Investing in many companies?

ARTICLE 1 – by Sarthak Dave, S.B.S.C., University of Delhi

ARTICLE 2 – by Akshay Chore, IIFT Kolkata

ARTICLE 3 – by Kinjalk Shukla & Tushar Dixit, NITIE Mumbai

ARTICLE 4 – by Sanjana & Abhijit, DoMS, IIT Madras

ARTICLE 5 – by Tushar Singla & Harshal Rao, NMIMS Mumbai

Relevance and need of risk management in a post COVID world and desired steps undertaken to mitigate those risks

ARTICLE 1 – by Vansh Chawla, Sri Venkateswara College, University of Delhi

ARTICLE 2 – by Kausthubh Bhaskar & Abhinav, IIFT Kolkata

ARTICLE 3 – by Meher Kaur, NMIMS Mumbai

ARTICLE 4 – by Rajat Jindal & Shalini Pathak, IIFT Kolkata

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Decrypting the Future of Alternative Investments By Bharat Kumar, Delhi University

Ever thought when someone comes to you with a currency which is not a national currency being authorized by the respective nations but a different currency altogether and ask to trade in it? That is what is known as alternative or complementary currency. Alternative Currencies are those currencies or means of exchange which are developed in response to any financial crisis or for any social issues whereas complementary and community currencies are one of the for ms of alternate currency, they are circulated in a specific area, exchanged between a group of people who accept to trade in such currencies apart from the national or multinational currency. Alternative currencies can be created by any individual, corporation, etc. they can arise naturally if people begin to use and trade in it as a currency. The reasons for the development of such alternate currencies are to build more stronger business relationships, growing collaboratively and to improve interest in the wellbeing of the community. They are developed so that it encourages the economic stability as they keep capital in that territory and hence it is one of the simplest ways to make use of available local resources and enhance the community. Developing economies have a very positive outlook if any alternate currency is setup as it provides a lot of people an opportunity to do transactions and generate livelihoods in such a country where especially the national currency is suffering. In such situations local people believe that new money brings an opportunity to strengthen the economy.

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Developing nations, as such does not have any threats as these currencies were set up in order to remove existing threats which possessed to be way more dangerous, so it already fulfils those gaps for developing economies. Now talking about developed economies, it possesses very less advantages for them as inflation is already stable and majority of the capital is already with them. The economic benefits of the alternate currency systems are less for developed nations, if alternate currencies are promoted as local currencies, they possess a restriction for them as they cannot be spent outside the community. In case of developed economies, the local economy faces rising costs, the economy loses the ability to effectively devalue the currency to regain and set for fight with the other competitors. This over-valuation of currency may lead to a fall in exports and shall ultimately hinder the economic growth. There are always great disputes over alternate currencies by different people-in view of economists the alternate currencies are normative conceptions of money as through conventional economics they treat such currencies only as a non-monetary phenomenon or as merely insignificant and marginal just as an alternative linked to the authorized currency. According to public policymakers. They see alternate currencies of great deal as they bring a lot of features and resolves the socio problems. If seen for a local economy, these currencies have a very great beneficial effect on local economies as consumption is taking place inside a local monetary and territorial space and there is no outflow of capital. This combination between microcredit and local currency will lead to a particularly powerful creational tool as we can then finance the productive activities which are inside that region. Due to use of these alternate currencies generates the leverage effect which also increases the logics and tools which are coming up from the social and solidarity economy. Hence the financial institutions remark alternative currencies to be quite useful but wher eas for central bank it is quite difficult to manage the national currency if the alternate currency is widely used in that nation as the flow of money gets disturbed, so it is quite difficult for them to manage and have negative outlooks for alternate currencies.

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In views of economics the money supply should not be allowed to come from any private source. Monetary inflow from other sources constitutes a violation, and then in that scenario the alternative currencies are meant to be forgeries but in literal terms this currency is altogether different and henc e it is difficult for national currency to suffer from oversupply due to which it will not cause inflation.

We as a whole community need to think why alternative currency is important as they resolve social and ecological issues. Money is a lever to start new and local economic activities. After post capitalism people seeks to leverage by connecting peers in a way of more equitable distribution of income for makers and creators. The sharing economy basically deals in cross transactions so that everyone can grow.

Though when the monetary system is made more complicated due to additional payment options there will be some transaction fees but for local currencies the transaction fees are usually kept lower in comparison for other currencies so hence the transaction fees for normal currencies will also decrease with passing time and hence ther e will be very less appreciation of foreign currency and hence national currency will be deprecated but this is considered to be for very less change.

Keynes once said that money is a connection between the present and the coming future hence the growing use of alternative currencies is one of the indicators of things to come. It is seen that the real progress on social and environmental goals is occurring at the local level only and not at the global level. Our advice to communities and business networks that seek a monetary dimension to their transition effort, is to adopt alternative currency. They can even provide systems for financing long term projects as well.

The exchange rates of the super naturalized and super ordinated alternative currency will decrease but relation between the exchange rate of the national currencies itself keeps ultimately more or less the same.

If we want to strengthen the economic activity and be socially beneficial and also environmentally sustainable there is a need of hour to do transition to a more fair and sustainable societies which requires a transition from credit issued by banks. Alternate Currency show the correct image of currency transition, because it offers exchange which does not rely on the petty bank issued interest.

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“The Impact, Relevance and way forward of the rising implementation of ESG investing in many companies?” While transparency and accountability are obvious challenges, the relevance of ESG investing cannot be

overstated. It’s here to stay, and that’s good! Sarthak Dave, Economics (Hons.) SBSC,DU (2020-23) Context

The Approach

For Starters, ESG (Environmental, Social and Governance) metrics are a certain mix of criteria’s that are adopted by a socially conscious investment firm to screen out their potential investments. Environment criteria basically refers to how a particular company deals with the environment during its cycle of production and distribution as well as how eco-friendly is the final product. Social Criteria is the one where the company’s relations with consumers, employees, suppliers etc is taken into account. And finally, Governance here means the nature and attitude of the top management towards shareholder rights, audits and most importantly stakeholders.

To begin with, many mutual funds and brokerage advisors now offer products that employ the ESG Criteria. One potential benefit of this screening for investors is that investors can just simply avoid companies whose practices can lead to risks in environment and governance. On a strong ethical note, such a metric analysis really sets a nice precedent because it now begins a trend where businesses will tend to realize that they have a part to play in the larger society as well. Seeing such a non-financial analysis being used for deciding potential Unicorns has many people cheered up and optimistic for times to come, however, the critical questions still remains whether such developments will withstand recessions and tough times like the one where we all are living today. Legally speaking, ESG metrics are not mandatory as a part of Financial Reporting Process (there are renewed demands to provision for displaying though), however, numerous institutions, like SASB i.e. Sustainability Accountability Standards Board and Global Reporting Initiative (GRI) are working to define standards and define materiality to facilitate the necessary incorporation. The point is clear; the growing trend of ESG metrics is undeniable and is affecting investments decisions of today and tomorrow. A quick rundown of the stats shows that globally, the percentage of r etail and institutional investors that apply ESG principles to a quarter or more of their portfolios jumped from 48% in 2017 to 75% in 2019. In 2018, sustainable investing assets totaled $14.1trn in Europe and $12trn in the United States. By 2025 ESG assets in the US are expected to hit $35trn. A r eport by Bank of America Merrill Lynch revealed that a portfolio based on buying stocks in companies ranking well against various ESG metrics would have beaten the broader market by 3% every year for the last five years. ESG investing is becoming an integral part of financial strategies as it allows investors to assess risks and opportunities, see the larger picture when making capital allocation decisions and transition their investments as the world begins to move to a low carbon economy.

Note that all potential to be invested company’s may not or may just partially meet any particular criteria. Therefor e, it is now up to the investor to decide what’s more important for him. For example, Boston-based Trillium Asset Management, with $2.8 billion under management as of March 2020, uses a selection of ESG factors to help identify companies positioned for strong long-term performance. Deter mined in part by analysts who identify issues facing different sectors and industries, Trillium's ESG criteria include avoiding companies with known exposure to coal mining and those a certain percentage of their revenues from nuclear power or weapons. It also avoids investing in companies with major recent or ongoing controversies related to workplace discrimination, corporate governance, and animal welfare, among other issues. Now, having known what ESG metrics mean, let’s dive into the fact as to how do they matter and what is there relevance in today’s investment scene

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Take Two Further, ther e are 10 key ESG principles used by Refinitiv to measure a company’s ESG performance. These include environmental factors like environmental innovation, resources usage and emissions, social factors like workforce, human rights, workforce and health and safety and governance factors like shareholder rights, board structure and corporate social responsibility (CSR). Those who are against such a criterion(s) are the ones who have just simply and blindly assumed that this results in a lower shareholder value and see these trends as a threat to capitalism and the larger financial markets. However, as the Merrill Lynch report stated, those companies are performing better off than those not complying with the ESG metrics. The focus must shift from Shareholder Capitalism to Stakeholder Capitalism.

The above case highlights the present scenario and gives a peep into the future, clearly stating that ESG metrics are a must for a sustainable global economy. And while it is true that recognition, transparency as well as accountability are obvious challenges, their relevance in today’s investment scene as well their importance in the future cannot be overstated.

Conclusion To conclude, ESG metrics are the talk of the town of the asset management world. Many investors and thought leaders are predicting that this would soon become the norm and default setting up in the investment process. A striking example is that of BNP Paribas Asset Management (BNPP AM), which offers several specialist ESG Funds but and rightfully so aims to meet ESG criteria’s across its product range. Helena Viñes Fiestas, the company’s Head of Sustainability Research, is responsible for making sure that happens. Viñes Fiestas was recently instrumental in establishing BNPP AM’s sustainability center and sustainability committee (which is chaired by its CEO). The center coordinates ESG integration within investment teams, as well as product development, communication and marketing. “Sustainability and everything around it have become critical and a pillar of our strategy,” says Viñes Fiestas. “Until recently, our head of ESG provided research on the issues to funds. But we have changed it so that ESG work is now integrated in all teams. ”To assess the ESG credentials of all the companies the firm invests in, Viñes Fiestas’s team has developed its own indicators. These start with information that the company’s external research partners glean from corporate sustainability reports. The team ranks companies according to these indicators, and then filters them into a matrix sorted by sector and sub-sector, market capitalization, and geography.

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Decrypting the future of Alternative Investments (Cryptocurrency, NFT, REIT, etc.) in India Indrani Pal, IIM Bangalore

Considered as the 4th biggest economy in the world, India has seen its share of struggles with the onset of pandemic and its aftermath as well. The effect still prevails. Now the big question is how and when the GDP will get back to what it was pre-pandemic or will it rise to a higher point altogether. All the 4 components of GDP- Consumption, Investments, Net exports & Government Expenditure, have seen a wide variation during the past two years. In terms of investments in various sectors like Roads, railways, infrastructure etc, Government has pushed to drive investments of up to 20-25% in the next fiscal year.1 But what about private investments? According to the W ealth expectancy report, 2021, Covid-192 has pushed the public in India to look more into the jobs/areas that are future-focused. This as a result has changed the priorities of people in general. Since the 2008 crisis, investors have learnt how important it is to have liquidity.

Opinion Let us talk about each of the investment forms and see what is in store for us in the future. NFT is currently one of the trendiest investments amongst the youth. These are basically linked to a specific asset having unique attributes. They can be used to establish ownership of digital assets such as gaming skins all the way up to tangible goods. What you need to know is how and when to invest in these NFTs. You must remember to not buy these tokens at peak times because then you will end up paying inflated amount which is the “gas fee”. With the help of NFT projects like “CryptoPunks” you can “flex” your demonstration of owning an exclusive fraternity. There is a huge scope for this kind of investment right now. Visa also recently welcomed CryptoPunks to its collection. Larva Labs, the developer of CryptoPunks has also signed up with United Talent Agency to explore film, games, television as well. Nex t if we look at the cryptocurrency in particular, we need to see the ongoing trends in the country to evaluate the health of the currency. NASSCOM in its recent reports has said that the Crypto industry could add upto $184B of economic value to India

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The crypto investment in India has seen a huge surge. Chain analysis, a blockchain analytics firm claimed that there was a remarkable leap from $923 million to $6.6 billion in the last year’s investment growth. This clearly is a green signal for all the would-be crypto enthusiasts out there. The Government has loosened its stand and is coming up with suggestions to make bitcoin a proper asset with the proposal of crypto regulation bill.

If we look at REITs, we need to know the various types of REITs that are present in space currently and see the relevant statistics to know which will bode well for us in the futur e. First is the RETAIL REIT which includes investing in strong rented retail outlets that have good balance sheets. Second is Residential REITs. These include the ones that own multi-family rental apartments. Here several factors like growth of the location of the buildings, economic conditions of the tenants, vacancy rate, etc. Third is healthcare REIT. These include investment in healthcare industry which comprises medical centers, nursing homes, clinics, hospital etc. Final type of REITs is Office REIT. Rental income is received via long-term leases. This again depends on several factors like employment rate, vacancy rate, economic conditions, growth of the industry in which the office falls in. Finally, there are mortgage REITs. This type of investment is done in mortgages instead of equity. Now the big question is what the scope is for investing in these REITs in India. Looking at the current situation, the best bet can be put on Healthcare REITs and Retail REITs. Given the pandemic, the healthcare sector everywhere in the world including India has seen a big boost. In the upcoming bills, we can definitely expect strong investments and push for development for this sector. The demand side is also going to be bulked up because people have now become more health conscious and tend to get regular check-ups, if we talk in a small scale. We also saw how with the population burst in the last decade, ther e has been increase in consumerism manyfolds. This has given huge slices of market to big retail players and made way for the small contenders as well. Be it e-commerce retail outlets or brick and mortar stores, the demand for rental space is going to increase gradually.

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This again is a strong indication to invest in the same. If we talk about the office REITs, it can be a risky one as after the pandemic, the organizational behavior has changed drastically with the offices going on a hybrid mode of operations where not all the space will be used all the time. This can significantly affect the rental income. There are other alternatives of investments as well which include private equity, private debt, hedge funds, commodities, collectibles and structured products. From the perspective of investment landscape in India, it will majorly depend on the goals of the investor. These goals can be broadly categorized into short-term, medium-term and long-ter m goals. Out of the set mentioned, structured products can be one of the best options to explore for high net-worth-investors who are looking for low risks in the coming future. The portfolio is easily customizable, and they offer good diversification which can be commendable in the current dynamic market conditions. The different components of the structured products include bond, equity and derivative. So, according to the risk, one wants to take the components can be decided upon flexibly. The story of investment can’t be summed up in a single article. If we pull out one string, there will be more interconnected strings. As the days pass by, new trends are going to come. We need to latch on to our everyday observations to actually decrypt the future of investments. Thus, its not about just selecting the correct portfolio, it is also about knowing what the investor knows and where his/her perspectives stand.

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Decrypting the future of Alternative Investments (Cryptocurrency, NFT, REIT, etc.) in India Shivika Garg, Bhanu S MDI Gurgaon

An investment could be defined as a saving intended to serve the purpose of capital appreciation/generating income. Investments are an important cog in the financial ecosystem of an economy. They transfer excess liquidity from investors and supply it to enterprises in need of capital, equalizing the surplus and deficit, earning returns for investors and providing capital to enterprises that need it. This cycle of flow of surplus funds is the foundation of economic activity.

An introduction to Alternative Investments An Alternative Investment is an investment in any asset class excluding the traditional investment avenues like stock, bonds and cash.

How they have performed so far Alternative investments have always brought good returns to investors who were prudent. For example, the securitization of housing mortgages was actually a good idea. It was a novel and radical idea and brought investors good returns before its assets lost credit quality. The investments in Private Equity fund in India has sharply increased from ₹ 62.55 billion in 2015 to ₹ 508.98 billion in 2020. The CAGR for the same has been 42% approximately. Despite the slowdown in 2019 and Covid-19, Global PE and M&A investors continued to gravitate towards India with ever increasing investment values.

Series 1

2015

36.22

2015

62.55

2016

84.71

2016

135.69

2017

102.66

2017

162.87

2018

124.73

2018

234.45

2019

177.08

2019

362.66

2020

236.9

2020

508.98

Investment in REIT’s have also increased sharply post 2015, from 36.22 billion in 2015 to 236.90 billion in 2020. This asset class has shown a CAGR of 36%. They do provide a favourable return but do not pass on the benefit of capital appreciation to the investors, which is why the r eturn is less as compared to what it is if someone invests in Real estate directly. In contrast, it allows investors to diversify their portfolio and invest in real estate even with small amount of money. As of now, India allows investment in only Commercial REIT’s.

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In general, Indians are increasingly investing in alternate assets to diversify their portfolio. The investments have increased from ₹419.60 trillion in 2015 to ₹2000 trillion in 2020. The investments in this avenue has increased sharply with a CAGR of roughly 30% overall. A phenomenal increase in investment in risky assets, which is surprising for a country like India where majority of investors are risk averse.

Opinion- Future of Alternative Investments Bitcoin As pension funds, treasuries and retail investors forage the markets for the next goldmine and venture into uncharted waters, there are unfortunate r ealities that are being overlooked. The threat of new entrants is very high in cryptocurrency and investing in currencies that derive value just from perception, demand and hype might be a folly. Viewing cryptocurrencies in this light, they qualify as a medium of exchange, but their value is heavily derived from the perception of the entities trading them and the markets as a whole. According to various research papers and articles published (even by the IMF and The New York Tines), Bitcoin was a perfect medium of exchange for illicit activities on the dark web where the users could get away with using Bitcoin as a currency, as it is near impossible to trace it back to them. Close to one-half of Bitcoin transactions (46%) wer e found to be associated with illegal activity and approximately one-half of Bitcoin holdings (49%) through time wer e found to be associated with illegal activity This fall in illegal Bitcoin users after 2016, as per the research article, is evident from how ransomware attacks later started demanding Monero, Ether eum and Zcash instead of Bitcoin payments. This might give a new shadow dimension to national currencies and opening up of a new chapter in financial crime. Since Bitcoin can be traded across borders and has exchanges in almost every country, anyone from India can sell INR to buy Bitcoin, and transfer it to anyone abroad who can then exchange it for their national currency, effectively skirting the legal currency exchange mechanism, and acting as a pseudo exchange mechanism which can bypass the authorities. This also means every single law passed to prevent money laundering, terrorist financing and other illicit financing (like FATCA, CFT and AML related) is now moot.

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We have witnessed how Elon Musk’s tweets about dogecoin drove the price up by unnatural percentages which fell equally steeply. This is the result of the open hand of the market in an unregulated currency.The Chinese govt banned all cryptocurrencies in 2021 September for this same reason, that allowing freerange cryptocurrencies into the financial ecosystem is basically analogous to relinquishment of financial regulation and authority.

However, RBI’s steps to ban crypto trading were reversed by the Supreme Court; a step, which in our opinion, is a case of sheer judicial overreach. How is an independent body expected to regulate the national currency, prevent money laundering and ensure a stable economy if it is handicapped by judicial overreach?

Alternative investments as an avenue for tax evasion- NFT Although alternative investments have their own risks and rewards, undiscovered avenues of parking money can sometimes surpass their purpose of capital appreciation, harbour tax evasion and money laundering. For example, expensive paintings, collectibles and antiques are some of the avenues where illicit funds are parked. NFTs are units of data stored on a blockchain. While NFTs are non-replicable, the asset they authenticate can be replicated and is hence fundamentally different from cryptocurrency. For instance, if I own an NFT of a picture of a sunset, there could be a thousand other people who downloaded the same picture and possess it. However, by virtue of the authentication given by the NFT, I could prove that I am the actual owner of the sunset picture .Sales volumes of NFTs hit $10.7 billion by the third quarter of 2021, compared with $2.5 billion in the first half. It is surprising how much value is being attached to a token representing a reproduceable commodity while the world is reeling under economic distress. Amortization of these NFT as an intangible asset could lead to tax fraud, and undue understatement of income. Extending our argument about the efficacy of an investment avenue that derives its value from pure perception, investment in NFT is bound to be unpredictable and volatile.

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Conclusion We believe that the Blockchain Technology is as fundamental as the invention of the wheel or fire, and can act as a great investment avenue. As more and more public applications are made which are realistically priced, technologies (like Bitcoin and NFTs which are just a few of the many applications of blockchain) which have practical applications are the nex t big thing in the technology space. For example, blockchain tokens can be used to unify the global payments system and international transactions which currently is time consuming. NFTs could be used in exchange rate mechanisms. Investment in such regulated and transparent securities is an excellent alternative investment arena. While we assess the future of alternative investment arenas, it is paramount to consider that the success of any investment destination depends on government policy. Favourable government policy could drive investments towards it and an unfavourable policy would drive investments away from a destination irrespective of how innovative or lucrative it is. furthermore, in failed economies like Venezuela, Argentina, etc, wher e citizens have lost trust in the government and the currency, cryptocurrencies like bitcoin are being adopted by the people as a universal payment mechanism, and an alternate to their failing currency. Looking back, alternative investments have time and again beat past logic to establish new paradigms in returns as well as risk perception and will continue to prove wrong skeptics and it is no surprise if they continue to do so.

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What is the impact, relevance and way forward of the rising implementation of ESG investing in many companies? Akshay Chore, IIFT

ESG (Environmental, Social and Governance) also known as “Sustainable Investing” is an investment discipline which aims at considering environmental, social and corporate governance (ESG) criteria to generate long-term competitive financial return and positive societal impact. In ESG investing, investments are made with consideration of the environment, human well being and the economy. This is based on the assumption that the financial performance of the organizations is affected by social and environmental factors. The concept of ESG investing is not new. A few centuries back, religious and ethical beliefs influenced investment decisions. Muslims followed investments that complied with Sharia law, which included prohibitions on weapons. In England, the roots of sustainable investing can be traced back to the Quacker and Methodists community. They refrained from investing in businesses involved in dealing with tobacco, alcohol and gambling. First socially responsible mutual fund was launched in the USA in 1971 known as PAX World Balanced Fund, which avoided investment in companies which were profiteering directly or indirectly from Vietnam War. Under the guidance of the United Nations, a paper titled “Who Care Wins” was published in 2004 and the term ESG was first coined in this paper. ESG investing officially entered mainstream investing discourse following the release of the Principles for Responsible Investments (PRI) in 2006. The PRI is the largest global network of institutional investors backed by the United Nation, pledging to incorporate ESG into the principle of investment. . In recent years there has been a significant growth in ESG investing around the globe. COVID-19 pandemic has encouraged this trend notably. Since ESG firms are more resilient, the market disruptions and uncertainty caused by the pandemic in 2020 has led many investors to invest more in ESG funds. In fact, the last quarter of 19-20 saw an inflow of $45.6 billion USD into these funds globally. Currently $30.6 trillion sits in the sustainable funds worldwide and this is predicted to grow to $50 trillion in next two decades.

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The growing trend is also because it has been seen that Portfolios incorporating ESG and sustainability also frequently perform better in the long-term than those that don’t. For example, Morningstar, a US based fund, found that over a period of 10 years, 80% of blended equity funds investing sustainably outperformed traditional funds. They also found that 77% of ESG funds that existed 10 years ago have survived, compared with 46% of traditional funds. The boom in ESG investing can be attributed to a wide range of factors. As supply chains are becoming more complex ther e is an awareness of human rights, social and labour issues and other risks for the business world. Growing concerns about environmental issues like climate change also influence the decisions of investors. Some of the groups like youngsters and women wer e previously less involved in traditional investing, the heightened engagement of these groups has also contributed to the ESG investing boom. It is very important that organizations adopt forward-looking ESG practices if they want to r emain competitors in their industry and contribute to the common good.

Industries which are slow to adapt to these changes are facing increasing criticism and pressure from investors, stakeholders, and concerned citizens alike. For example, in May 2021 ExxonMobil and Chevron faced pressure from their shareholders to reduce the companies’ contributions to climate change, also in another matter a Dutch court ruled that Royal Dutch Shell cut greenhouse gas emissions by 45% by 2030. Legal obligations for these industries are also expected to progressively tighten after the COP26 summit.

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Impact of ESG investing

Relevance of ESG investing

For companies, ESG leads to value creation in five essential ways: 1.Top Line Gro wth: Organizations can attract B2B and B2C customers with more sustainable products and achieve better access to resources through stronger community and government relations 2.Cost Redu ctions: Strong ESG can lead to effective utilization of resources leading to saving in costs. Also, lower energy consumption and reduced water intake will save costs 3.Regulatory and Legal interventions: Companies can earn subsidies and government support. Strategic freedom through deregulation can be achieved 4.Productivity Upliftment: Gr eater social credibility helps in attracting talent and boosting employee motivation 5.Investment and asset optimisation: Enhance investment returns by better allocating capital in the long ter m and avoid investments that may not payoff in the long-term because of environmental issues

ESG investing entails a wide scope of issues including:

For shareholders, ESG focused companies have potential to generate more wealth by: 1.Lower Risk: ESG focused companies have a good risk management mechanism that lowers the probability of occurrence of any extreme event 2.Improved Valuation: Strong ESG practice leads to lower cost of capital and higher cash flow which in turn translates to higher valuations 3.Improved financial performan ce: ESG integrated businesses generally have competitive advantage over others which translates to higher profitability and free cash flow to the companies ESG is creating opportunities for those at the forefront of change. Looking at the movement of global investment, billions of dollars are flowing into the energy transition.

Year

Storage, Electrificatio Renewable Total n, carbon Energy Amount capture, other

2004

$33B

$0B

$33B

2008

$157B

$25B

$182B

2012

$239B

$24B

$263B

2016

$277B

$101B

$378B

2020

$304B

$197B

$501B

Environmental Social

Governance

Working Business ethics conditions GreenHouse Equal Executive pay Gas Emissions opportunities Resource Board diversity Human rights depletion and structure Waste and Employee Bribery and Pollution diversity corruption Water and Health and Political energy safety lobbying efficiency Child labour Deforestation Tax strategy and slavery Community Biodiversity Compliance engagement Climate Change

Not all ESG issues are given equal weightage while investing. Just like every investor in the market has different motivations and values, organizations also prioritise the ESG issues according to their business strategy. Environmental, social, and economic circumstances of the time influence the priorities of the organizations. Companies take decisions of ESG based on what is more important and material to a company given their industry, geography, and specific circumstances. Some prominent ESG issues influencing investors include:

•Human rights issues within the supply chain of the organization •Organizations’ efforts to mitigate climate change and other environmental disasters like biodiversity loss. •Diversity at workplace and equal opportunities. For example, what proportion of the organization's employees identify as minority groups?

(Source: Bloomberg NEF, BP Statistical, energy storage, electrified transport and electrified heat. Data as of June 30, 2021.)

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Way Forward:

(Source: PWC June 2021global consumer insights pulse survey)

From the above graph it can be clearly seen that customers are more and more supporting the companies which are having sustainable processes or having environment friendly products. This trend can be seen across the world. ESG investing is still young and will grow in the future. The first step is changing the mindset, which is clearly happening and continuing to happen. The nex t logical step is changing behaviour and that requires active ESG investing. Active ESG investors actively engage with portfolio companies to induce change to better the environment, social aspects and governance. Many countries are bringing regulations and policies which are designed to ensure that the cost (taxes, tariffs, caps, etc.) of ignoring the element of sustainability is higher than that of the returns accrued otherwise. Hence a push from top to down in form of policies and regulations will result in pull from bottom up as a natural consequence.

Opinions If we look at the environment factor alone, it is high time to increase the ESG investments let alone the social and governance factors. To increase the confidence in ESG, consistent methodologies will be required. Since regulations vary by country, there is no one criteria that may be used across countries. Investors around the world are considering a range of factors while making decisions. This range has become much broader, reflecting this gradual diffusion of more holistic and progressive ESG values into the investing arena. Looking at the numbers, it is fair to assume that ESG investing is becoming mainstream. Some may argue that it is ‘too little, too late’ we as humans need to slow the effects of climate change in any way we can. Mobilising the business world to help in this endeavour is one real way to make a significant difference.

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What is the impact, relevance, and way forward of the rising implementation of ESG investing in many companies? Kinjalk Shukla, Tushar Dixit, NITIE, Mumbai

Environmental, Social, and Governance (ESG) investing has exploded in popularity over the last decade, with some estimates estimating that the value of professionally managed portfolios that incorporate key parts of ESG investment to approach USD 17.5 trillion globally. Investor’s increased interest in ESG variables reflects the belief that environmental, social, and corporate governance issues – including risks and opportunities - can have an impact on an issuer's longterm performance. As an increasing number of institutional investors and funds include diverse Environmental, Social, and Governance (ESG) investing strategies, forms of sustainable financing have risen significantly in recent years. While the mainstreaming of sustainable finance is a positive step forward, the vocabulary and practices connected with ESG investment differ significantly. One reason for this is that ESG investing has grown from socially responsible investment ideas to become its own type of responsible investing. Shifts in demand from throughout the organisational finance ecosystem have sparked ESG investing, driven by both the search for superior longterm financial value and a need for better alignment with values.

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ESG criteria and investing have received a lot of attention over the last few years, thanks to at least three causes. 1. According to recent industry and academic studies, ESG investing can help enhance risk management and lead to returns that are comparable to traditional financial investments under specific conditions

2.Growing societal awareness of climate change risks, the benefits of globally accepted standards of responsible business conduct, and the need for diversity in the workplace and on boards of directors suggests that societal values will increasingly influence investor and consumer choices, potentially affecting corporate performance. 3.Ther e is considerable momentum among organisations and financial institutions to shift away from short-ter m risk and return perspectives and toward investment performance that better reflects long-term sustainability. There is mounting evidence that financial sustainability must take into account broader external issues in order to maximise long-term returns and profitability while lowering the likelihood of conflicts that erode stakeholder trust. The public sector has increasingly become interested in ESG investing. Many central banks in advanced and emerging market nations have committed to incorporating environmental, social, and governance (ESG) evaluation.

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Impact As demand for ESG ratings, indexes, and funds grows, the finance industry is responding by developing additional products and services. The number of companies claiming to provide ESG ratings has increased. ESG indexes, stock and fixed income funds, and ETFs already number in the hundreds, and the number is growing. ESG investment is now possible through low-risk products such as money market funds and passive smart beta ETFs, as well as hedge funds that combine sophisticated synthetic techniques with ESG alpha investing. Green transition and renewables funds are available to investors looking to position themselves for the transition to a low-carbon economy. In this regard, financial markets have demonstrated their ability to adapt to investor demand in a transparent and customer-centric manner.

Dimensions and drivers of ESG investing over the last decade, the number of assets under management that include some element of ESG evaluation and decision making has increased dramatically. In the United States, ESG investment now accounts for more than 20% of all professionally managed assets, adding more than USD 11 trillion. Industry data on a broader spectrum of ESG practices in Europe implies a value of about USD 17 trillion. ESG investment funds and ETFs have risen to over USD 1 trillion in the United States, but less so in Europe and Asia, due to institutional and retail investors' need for pooled investments and liquidity. ESG products, such as ESG funds, have also grown in popularity, with over USD 1 trillion in assets under management.

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According to Morningstar's statistics, which includes both open-ended and exchange-traded funds, the number of funds launched using ESG criteria jumped from 140 in 2012 to 564 last year. Morgan Stanley conducted a study of 120 institutional investors and found that 70% have incorporated sustainable investing criteria into their decision-making, with another 14% actively considering it.

According to surveys, institutional investors and professional asset managers are largely interested in using ESG to compete on risk adjusted returns and risk management. According to a 2019 BNP survey of institutional investors and asset managers, more than half of those polled want to integrate ESG for better long-term returns, followed by company reputation. Less than 30% do it for philanthropic reasons or to diversify their product offering. Other financial sector polls show that end investor’s desire to increase corporate and other issuer’s alignment with social and moral factors has fuelled growth in ESG investment and a shift away from solely commercial investing. Only around 20% of those who pursued these solutions did so primarily to increase their financial returns or lower their investment risks. Millennials are driving both contemporary ESG and impact investing, according to various surveys, but Generation X is also actively backing this move.

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These cultural trends reflect a rising realisation of the significance of realigning global financial systems toward sustainability in two key areas: climate change and development ethics: Investors, financial markets, and financial institutions are increasingly influenced by increased attention to the need for finance to better absorb the possible implications of climate change. Following the Paris Agreement in 2016, several international organisations examined the need for international finance to aid the transition to low-carbon economies by devoting resources to modernising infrastructure, renewable energy, and moving away from brown industries. The increased demand for ESG tools that can assist measure and benchmark these activities is being driven by society's demand for higher ethical standards of economic growth through finance and business operations. The UN Global Compact, which stresses 10 principles linked to ethical standards connected to human rights, labour, anticorruption, and the environment, is a significant set of standards for ESG, and particularly the social pillar. Furthermor e, investors who want to match their investment strategies with ethical global development goals like the Sustainable Development Goals are looking for investment solutions that might assist them do so. ESG financial ecosystemThe growth and institutionalisation of ESG approaches and methodologies calls for a thorough understanding of the various contributors that have contributed to the institutionalisation of the ESG financial ecosystem. The focus is 1.An intertwined network of financial intermediaries and analytical service providers 2.An array of non-government government, private sector and international organisations that are influencing the emerging practices in ESG investing. Ecosystem of ESG finance The rise and institutionalisation of ESG methods and techniques necessitates a detailed grasp of the many contributions to the ESG financial ecosystem's institutionalisation. The focus is on1.An interconnected network of financial intermediaries and analytical service providers2.A diverse range of nongovernment, private sector, and international organisations that are influencing growing ESG investment practices.

Way forward New frameworks have aided in the definition of a wide range of difficulties. Despite their differences in depth and sector focus, frameworks all have one thing in common: • Environmental protection • Promoting equity • Building trust and stability

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Executives in the financial services industry should think strategically about how their companies can respond to environmental, social, and governance issues. Today, the industry has an opportunity to use innovative technologies and form new alliances to address key societal concerns, create new markets, and earn profit in conjunction with a variety of stakeholder groups, all while actively rebuilding trust in institutions. Climate adaptation, additive manufacturing, the changing role of work, and addressing inequality are just a few of the most credible and consequential problems that lie ahead. Instead of thinking about ESG in vertical silos (E, S, or G), leaders should take a multidimensional approach to assess the risks and possibilities in all three areas, as well as across the larger tasks at hand.

Opinion What instruments can financial services organisations bring to bear in order to safeguard the environment, increase equity, and ensure stability, recognising that the jobs to be done are complex? Managing the shock of another biothreat, or addressing the potential around reforming education, necessitates a well-equipped tool belt.The industry plays five fundamental roles. They are: •Facilitating value exchange and liquidity •Providing a means for the secure storage of wealth •Offering mechanisms for risk management •Facilitating investment across multiple parties •Maintaining trust and confidence to drive economic growth This cross-pillar view of opportunities is useful in assessing potential risks.

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The Impact, Relevance and Way Forward of the Rising Implementation of ESG Investing in Many Companies Abhijit Rathod, Sanjana Kumar, MBA, DoMS, IIT Madras

Introduction In the strategic world of business decisions, Environmental, Social, and Governance (ESG) Investing underpins the premise that these factors form valid grounds towards investment choices. It is an investment strategy based on holistic grounds for judging a given company's financial returns and impact.ESG investing goes beyond the acronym and hinges on sustainability, a gray area in terms of interpretation and implementation. Some decision-making parameters are resilience, ethical business practices, resource utilization, corporate governance practices, health and safety stances, biodiversity, and the list goes on. To make investment decisions, global fund managers keep an eye out for readings on ESG indices (S&P 500 ESG Index, S&P Europe350 ESG Index).

Rising Implementation of ESG Investing: On a global scale, the percentage of investors (retail and institutional) applying ESG principles to at least a quarter of their portfolios increased from 48% in 2017 to 75% as of 2021. The given projection predicts that ESGmandated assets will make up half of all the professionally managed invest ments across the USA by 2025, driven primarily by client-side demands.With emerging developments in AI technology and the regulatory landscape, ESG assets should Continue to grow at at a rate of 16% (CAGR), reaching up to almost US$35 trillion by 2025. Portfolio Decarbonization Coalition, a United Nations-sponsored group, has put forth $600 billion towards the funding of green projects and investments.

Undeniably, each country will have its unique way of incorporating ESG investing norms in its welfare agenda. Closer home in India, the ecosystem is yet a nascent one. BSE has three sustainability investing indices - S&P BSE Carbonex, S&P BSE Gr eenex, and S&P BSE 100 ESG. Even though the adherence to the indices is now more prevalent than before, the exercise is more thematic than a tailor-made solution. Some ESG funds launched in the last fiscal year FY2020 are Aditya Birla Sun Life ESG, ICICI Prudential ESG, Kotak ESG Opportunities, Quant ESG Equity Fund, Invesco India ESG Equity, and Mirae Asset ESG Sector Leaders ETF.

Relevance of ESG Investing: The investor's side of the story: In today's knowledge-based economy, the IT and Financial Services sectors enjoy the highest market capitalization. Interestingly, very little of their assets are tangible. Instead, most of their market cap consists of intangible factors like the brand, IPs, innovationdriven ideas, and employee welfare. Consider the following graph to uphold the past 40 years worth of data-based observation:

Consumer association with brands

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Opinion: Is it really fulfilling the purpose? Is it all rosy in the world of ESG investing? No. The investing fraternity is slow in the uptake. The issue of diversity (or the lack thereof) offered by ESG shares still remains. Most companies that align with the criteria are primarily focused on large-cap stocks, thus limiting the diversification prospects of investor portfolios. The ecosystem gets barred from small-cap, mid-cap, and non-US-based companies. Again, ESG mutual funds focus on developing strategies less inclusive of specific industries, and hence, tobacco and oil industries are left out. Yes, these industries should be avoided from the environmental and social standpoint, but this exclusion also increases the risk of investors only parking their funds in a single industry. The next doubt that comes to mind is whether or not the investors are r eally invested in the cause and not just committed to the profits and reputation associated. However, apart from this, other persistent factors as below must be considered: The pr ecision of ESG ratings: This refers to the inconsistency in investors' interpretation of ESG investing. The problem also manifests itself through the rating agencies that apply varying degrees of importance to each of the three individual factors, exacerbated by the lack of transparency in the process. It is crucial to an investor so they can align their investment objectives with an opportunity.

Materiality per industry segment: Different industries have different ESG footprints. Hence, while traditionally, Governance factors have taken precedence in evaluation by financial firms, the 'E' and 'S' in an intra-industry setting changes based on a company context. Example: In the energy industry, material factors included in oil and gas upstream would be flaring, transportation, pipeline integrity, and thus adhering to the 'E'. However, for a midstream company, critical factors would be the emissions and asset integrity of the plant. Therefore, a more granular workflow of a company is essential. Conclusion: It is implicit knowledge that a larger-scale global engagement in these lines will be through changes on a policy level. The ESG regulators and the framework providers have worked endlessly to ensure the development of the practices, but further analysis can ensure that progress does not come at the cost of market fragmentation and that the integrity of the market and investors is untouched. Perhaps the words of Peter Drucker, "The best way to predict the future is to create it", now ring truer than ever.

Inconsistent KPIs - Sour cing of data: ESG data itself is non-standardized. Given that most companies are just getting used to these reporting norms, they are yet to adjust to the new ways of sourcing data. Albeit, faults persist even if a uniform rating rationale was observed. The way forward: How quants can help: Quantitative investing processes (traditional/ alphaoriented/ ESG investing) have a clear edge in making decisions and can help with drawbacks:

Data sourcing: Most ESG datasets are in the form of big data and need advanced statistical and machine-learning techniques to help with processing and transformation to gather actionable insights. Portfolio construction: A correct diversified portfolio is the key to success as an investor concerned with financial and non-financial objectives. This duality is taken care of when we quantify the potential trade-off. It helps in processing alternative data and leverage ML procedures to provide suitable suggestions.

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Decrypting the future of Alternative Investments (Cryptocurrency, NFT, REIT, etc.) in India By Tushar Singla & Harshal Rao, NMIMS Mumbai Opinion During the last decade, Environment, Social and Governance (ESG) investing has become a top priority across the companies around the globe. In 2019, out of 500 S&P Companies, around 86% reserved the space for ESG repor ting and metrics in their Annual Statements. As per a BCG report, in India Assets-under-Management (AUM) for ESG themed funds has increased by 2.5x in FY21, amounting to $650 million in comparison to $275 million in FY20. ESG investing is well-poised for shaping the investment horizon across multiple asset classes in the future as key stakeholders like Customers, Employee and Investors have been laying emphasis on ESG investing. ESG has been consistently garnering WorldMedia’s attention as over 4000+ media articles have been identified and published related to ESG investing. ESG investing has been making headlines as over 3000 companies have taken the pledge for net zero emissions from their operations by 2050. For Global Sustainability, ESG investing is promising but factors affecting ESG investing still needs to be comprehended and understood well by Institutions and Corporates

Shareholders’ value. As a result, Investment companies’ pledged AUM stood at around $103 trillion in 2020, growing by 14x. Talent retention and high Attrition rates are cause of concern for most companies. According to a BCG report, 67% millennials prefer working for Employers having Societal impact which shows ESG investing maybe the missing piece in the Jigsaw puzzle of attracting and retaining top-notch talent. Key Metrics There are innumerable metrics being used by different corporations, research houses, firms and corporations to assess the impact of ESG investing. Thus, choosing the most relevant ones remains a key challenge. Some of the following Metrics have been chosen diligently which may pave the way for ESG investing. These metrics have been obtained from Morgan Stanley Capital International (MSCI), Dow Jones Sustainability Index (DJSI), Refinitiv database and Sustainability Accounting Standards Board (SASB). These are divided into Environment, Social and Governance. Environment 1.

Understanding relevant stakeholders impacting ESG investing for Companies is of paramount importance. Key stakeholders like Customers, Shareholders and Employees play a significant role in Strategic decision making of ESG investing for Companies. Customers around the world have been keeping a close eye on the companies they usually buy their product from and are shifting to more sustainable & nature-friendly products. Clients are now seeking ESG commitments before deal making, especially for long-term investing. Investors’ aka Shareholders are looking beyond wealth generation and

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Net Zero and Portfolio Strategy – Companies must analyse the implications for Green growth and decarbonization. Investment rationales are being weighed on sustainability efforts and carbon neutrality approaches. Carbon change remains a top concern among 72% of Institutional investors as per a Bank of America survey. Corporates are demanding Net Zero disclosures before deal making. Sustainable Energy resources – Automobile companies are moving towards E-Vehicles while plastic producers are streamlining operations through the lens of Sustainability. Green Energy is a key metric of major rating agencies. Refinitiv and MSCI place a weightage of 5-19% on Green Technology. Sustainable resources are enabling top-line growth and are expected to generate $550 Million of revenue for corporates.

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3. Waste Management – Being proactive about Waste management can provide a competitive advantage and save billions via cost reductions. As per a Mckinsey report, 3M has saved $2.2 billion via its ‘Pollution prevention pays (3Ps)’ program by redesigning equipment and reusing waste from the Production. Waste management has been getting a weightage of 5 % in rating agencies ESG methodologies. Social – 1. Skills development – Upskilling is the norm of the hour especially post-pandemic. Digital skills will be the differentiator between good and great companies. In-house training and sessions boost employee productivity and satisfaction. As per London Business School’s Alex Edmans, Fortune’s “100 Best Companies to work for” generated 2 .33.8% higher stock returns over their peers for a 25year horizon. 2. Human Capital Management (HCM) – HCM includes Employee well-being, engagement, Pay-rolls and retention. Growth of any company lies at the heart of a stellar working culture, and it stems from Human Capital Management. As per Edelman Trust Barometer, around 52% investors consider HCM as a significant metric for ESG investing. 3. Diversity & Inclusion (D&I) – Studies have shown strong correlation between diversity on the executive teams and likelihood of strong financial outperformance. Companies prioritizing Inclusion are on the course of long-lasting growth as Investors are keeping a close eye on D&I in C-Suite and workforce. Governance – 1. Robust Crisis management – Crisis Management frameworks have been gaining popularity among businesses. This both external and internal-value proposition enables corporates to achieve strategic freedom and curtails regulatory pressure. For certain industries like Pharma, BFSI value at stake can range from 25-60% and, if not strengthened, can cause a dent to the bottom-line. 2. Corporate Governance – Reliable Management and competent Boardroom composition can entrench the investors confidence in a company. Good governance practices enhance transparency and keep regulatory watchdogs at bay. ESG ratings place high weightage on this metric, with a varying range of 20-30%.

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In India, Corporate governance rules are set Companies act in association with SEBI’s regulatory norms. It also entails disclosing Financial linked incentives and management pay structures. 3. Work Ethics - Ethics are moral principles that provide guidance and promote a Culture of Integrity. Strong Ethical Culture fosters trust of investors and leads to efficient global Capital markets. Standards of Ethics can help to recognize the significance of Situational influences like what other people are doing around them and can save business reputations

Environment

Social

Governance

Net Zero and Portfolio Strategy

Robust Crisis management

Sustainable Energy resources

Human Capital Management (HCM)

Corporate Governance

Waste Management

Diversity & Inclusion (D&I)

Work Ethics

Way forward ESG investing can deliver promising investment returns by allocating capital in less stranded assets. Companies are disclosing new ESG norms alongside heightened social activism. However, in case of ESG investing a Do-nothing approach will be an eroding line, not a straight line. It is difficult to align and embed ESG goals with the desired outcomes. But there are ways in which one can get ahead of the future curve and navigate the way for a comprehensive ESG investing.

A. Goal-Oriented roadmap – Large companies can have multiple ESG investments which can be a muddle at once. ESG investing should be timebound and clearly defined. Reporting standards must be laid down and areas of improvement must be highlighted. ESG goals profile must also be set keeping in mind the corporate life cycle. B. Aligning Purpose and Vision – ESG investing purpose must be aligned with the company's vision. The core message must be delivered by CSuite and higher management. ESG investing must be tied to business strategy especially for Investment and financial services firms. Like Infosys has aligned its ESG, ‘Shape and Share solutions that serve the development of businesses and communities’.

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C. Real Evaluation – Getting the ESG investing wrong can lead to massive value destruction. Overdoing can drain time and focus while underdoing can lead to market capitalization decline. Leaders should critically evaluate ESG investing against all the set metrics and returns must be benchmarked as per industry standards. D. ESG investing as an impact lever – ESG investing can go beyond core businesses to address the investment risks and strategies. ESG investing can deliver 360-degree impact while delivering superior returns across the value-chain and addressing all the stakeholders concerns.

In the current scenario, achieving proficiency in any field is an evolutionary process and ESG is no exception. ESG investing can be part of core business and can solve persistent Societal & environmental problems. With focus on resilience and the above mentioned four-pronged approach, companies can focus to emerge stronger and follow sustainable ESG investing practices.

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Decrypting the future of Alternative Investments in India By Vansh Chawla, Sri Venkateswara College, DU

Rightly said, “Turning a blind eye shall never bring about a worthy change”

The buzz word on everybody’s minds and feeds today is none other than cryptocurrency. Bitcoin and other cryptocurrencies have been mounting swiftly in India in spite of a restricted atmosphere presented by the Central Government and the Reserve Bank of India. But what does it mean about the future in hold for such alternative investments in India? The future of alternative investments like cryptocurrency in India is likely to be significantly more complicated, as they are currently unlicensed & unregulated by any government and this very subject is what we’ll explore in this article.

To point out the lesser known, Indian Crypto consumers are quite different than those in the Western world or in fact to the ones in Southern Asia since they do not own their digital currency but trade it as often like people use stocks to buy a piece at an auction. In fact, this is where many start-ups see potential since buying something without knowing its value can turn out risky because you may lose control of your money even if you keep close tabs on prices. It's too early by any means to say that Indians will not continue this trajectory and evolve. India is the second-largest country in the world with over 1.32 billion people and an estimated internet population of 240 million. In a country that has become so accustomed to the digitalisation and who’s recent most notable economic growth is owed to the digital revolution, cryptocurrency’s adoption would be a strategic step in siding from the less progressive nations and aiming to join the rather forward-looking world. Cryptocurrencies can be traded on unregulated exchanges. The government has warned people about investing in cryptocurrencies, but it hasn’t banned them outright. Since the Indian government has refused to legalize it either, it has taken a cautious approach to regulating digital currency. However, the Security and Exchange Council of India (SEBI) has expressed its dissatisfaction with companies that deal with and own any form of cryptocurrency, time and again.

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According to sources, an interagency group led by former Finance Minister Subhash Chandra Garg recently filed a report calling for a cryptocurrency ban and RBI digital currency authorization, with the exception of government-issued virtual currencies. Union Finance Minister Nirmala Sitharaman said on August 16 of this year that the Union government will soon have to pass legislation regulating cryptocurrency and its growing market in India.

The Reserve Bank of India (RBI) has consistently highlighted private cryptocurrency and the impact of this growing unregulated decentralized financial activity as a potential threat to the country's financial stability. In case we end up with a regulated crypto space in India, the government will take all measures to prevent the use of these cryptocurrencies to fund illegal businesses in order to promote a healthy crypto ecosystem. Nischal Shetty, CEO of Indian cryptocurrency exchange WazirX, stated that the delay in introducing cryptocurrency laws shows that the government is not in a hurry to make a decision. Although it is possible for the Indian government to ban cryptocurrencies, this move would push India at the very back amongst nations that would, in future show support for this new-age currency. A rec ent dispute between the Reserve Bank (RBI) and the Apex Court (SC) over their views on cryptocurrency trading remains a source of serious confusion and turmoil.

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Both r egulators have several different views and judgments about trading this type of currency and their impact on the economic and financial health of the country. This draws additional attention to the big question of why India cannot regulate these currencies in the same way as other countries, through tax law changes, the Foreign Exchange Management Act (FEMA) of 2016, etc. And even through the appointment body such as RBI or (Securities and Exchange Board of India) SEBI in this business as the introduction of the digital rupee does not guarantee that ther e will be no fraud or money laundering.

The world has already started embracing cryptocurrency, with major corporations such as Microsoft and Amazon accepting payments for some services in cryptocurrency. Moreover, the RBI (Reserve Bank of India) too, in a positive step, has given its approval to 11 companies for bitcoin trading activities. While this does come off as a progressive move, there still needs to be an increase in transparency and accountability before we can see cryptocurrencies being used more widely in the Indian economy.

A bar on cryptocurrency in India will mean that you just won't be able to convert local currencies to shop for cryptocurrencies or exchange cryptocurrency for cash. Most trading platforms have pre-emptively followed this recommendation, and a few have even forbidden users from transferring their tokens and coins to personal wallets or other exchanges.

The political landscape in India is taking shape very similar to what we have seen in other countries where cryptocurrencies are regulated. With the right rules and incentives, cryptocurrency and blockchain technology can help India achieve its goal of becoming Atmanirbhar. Although the government has postponed the country's cryptocurrency regulation, and might be underway in preparing to introduce the Indian digital currency to counter private virtual currencies, the common man is optimistic about the future.

Alternative investments are well known to be high risk, high return investments. They are not typically suitable for the novice investor. Cryptocurrency is an emerging form of alternative investment that has gained a lot of popularity but since It also does not have any intrinsic value, people should be rather careful while investing in it. My personal opinion on this chaos grounds as the following: The Indian economy is at a crossroads as it moves from agriculture to service-led model. The service industry, as of now, is not fully developed and the contribution of the industry to GDP cannot be ignored either. Investment in alternative assets like cryptocurrency can help an emerging economy like India's to make up for the shortage of capital and easy access to finance across all sectors.

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Relevance and need of risk management in a post COVID world and desired steps undertaken to mitigate those risks By Abhinav & Kausthubh Bhaskar, IIFT Kolkata

Reshaping your risk management possibly does not guarantee being able to forecast the next major disruption. But, whatever comes your way, you'll be better prepared to give a more effective organisational response. Uncertainty can be dangerous, but embracing it with clarity and speed is the most effective w ay to gain a competitive advantage. Risk m anagement is an integral part of a successful company strategy, not something done at a later stage, but prior, to be prepared to soften the fall.

Risk management is often misunderstood or wrongly conceived of as a compliance job, even after 20 years of constant upheaval. While compliance regimes may operate well in a relatively static environment for known risks with clear implications and proven mitigations, COVID-19 has showed that the environment is everything but static. COVID-19's impact was impossible to forecast because risk isn't a well-behaved house guest. And any senior executive, board member, or risk leader whose company has thrived despite, or even as a result of, the COVID-19 problem should be aware that things will be different next time. One of the true possibilities this crisis gives to risk executives, executive teams, and businesses is the ability to upgrade and reposition risk management to undertake a risk reboot. Not in the sense of reset your device as in the IT world, but reimagining the concept of risk management with a different lens. To help face a highly uncertain future, it means reinventing, rejuvenating, and re-energizing risk management and all of its parts. This reboot has resulted in a risk leader's agenda and mandate as well as a risk management function that are tailored to the major risks that the company faces as it pursues its purpose, mission, strategy, and goals. The paradigm shift in risk management can be ignited by some guiding principles like; building trust among stakeholders, elevate the role of risk management, generate and disseminate risk intelligence. Risk executives must think more ex tensively and thoroughly about the organization's ecosystem of stakeholders in order to cultivate stakeholders' trust. Customers, employees, the board, vendors, partners, investors, the media, the community, and society at large all have requirements and expectations, and relevant risk programmes are designed to meet those needs and expectations.

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When a business and its stakeholders have complete trust in one another, they become risk management partners, alerting one another to developing risks, working on mitigation, and adding value to each other. This has been demonstrated through customer councils and preferred supplier programmes, as well as among extended business partners, where critical stakeholders are "brought inside the company" to strengthen connections and develop confidence. Viewing the stakeholders more deeply positions a risk leader to: •

•

• •

•

Identify all stakeholders in the organization's ecosystem and their relationships with one another, not just with the organisation Recognize the complete range of threats that could jeopardise the organization's capacity to meet the requirements and expectations of each group Clearly state what each stakeholder group requires and expects from the company Understand the interconnectedness of stakeholder expectations and the ways in which stakeholder groups affect one another, as well as the risks that are linked with them To avoid being perceived as a naysayer, challenge management on potential faults in a strategy, failures in execution, and areas where the organisation might break, while pointing out potential opportunities, solutions, and fixes Ascertain that the risk programme proactively monitors, mitigates, and manages risks that may have an impact on the organization's capacity to meet stakeholder expectations, as well as the trust and confidence of key stakeholder groups

Many businesses are unaware of the costs of risk management or the benefits it offers or could bring. By discovering new possibilities to offer value as well as addressing present and future thr eats, risk management may be reinvented to enhance its role. This boosts risk function confidence by giving more relevant data, including predictive data, and resolving the compliance problem produced by the requirement to establish new controls, processes, and reports in response to new regulations.

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A successful policy change also necessitates support from the C-suite and board of directors, as well as the presence of the right risk leaders. Most risk professionals have solid technical competenc e when it comes to leadership. They are experts in compliance, cyber, health and safety, legal, and other risk fields, and can define and calculate inherent and residual risk. They, on the other hand, tend to speak in terms of risk rather than business. As a result, they communicate in ways that fail to highlight true thr eats to senior executives, perhaps jeopardising their credibility. When a crisis hits and there's a lot of uncertainty, management needs a clear picture of what's going on now and in the futur e. The risk leader and risk function, on the other hand, frequently lack access to data, analytical firepower, and the ability to communicate with management and the organisation in real time or near-real time. A successful risk reboot provides the risk leader with immediate access to risk and performance data, as well as analytical tools and reporting methods including data visualisation. It is equally important that the risk leader be prepared to provide early warnings of emerging risks, along with recommendations and an action plan, to further support decision-making—perhaps with the help of risk-sensing technologies, predictive analytics, and scenario planning. Risk leaders can use scenario planning in particular to clearly depict the impact of potential risk events on certain stakeholders. It allows managers to have a better understanding of the whole range of options available as well as the if-then consequences of each decision. Scenario planning also allows executives to identify potential signals that, if present, could reveal the nature and impact of potential hazards, as well as the trajectory of future events. Scenarios, on the other hand, should be utilised not just to play out scenarios, but also to

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incorporate genuine risks into the decision-making processes of businesses. The more data a company feeds into scenario planning, risk monitoring, risk sensing, and predictive analysis, the more useful those tools become. Risk evaluation and management should be tied to a company’s core decision making and go beyond the existing matrix in the following ways: 1.Static annual records must make place for constant horizon-scanning for early indications of change and corresponding action timelines in a world of accelerating problems. This necessitates a data-driven strategy that adjusts not only processes but also culture. The goal of doing the above mentioned is to take a value – based, dynamic risk management approach

2.Risks and opportunities must be considered in their whole. Events rarely happen out of nowhere and leave no trace; they usually involve a complicated web of probable causes and far-reaching consequences. A cross-functional team of exper ts, both integrated into the C-suite and engaged regularly with the front line, should gather intelligence on these 3.These findings should inform strategic planning, financial forecasts, investment feasibility, and the way business models and capital allocation decisions are made. When risks are linked to underlying assumptions and their impact ranges are quantified, this type of decision-support becomes more effective

4. While plans may need to be altered during difficult times, developing them is still beneficial. Key stakeholders are brought together to discuss alternate realities and escalation patterns as part of planning for continuity and effective crisis response. Close alignment across a company, from shareholders to the board of directors, to our senior leadership, and all the way down to business planning and the capital decision framework, aids this

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5.Cultural flaws are at the root of many of the most costly risk and integrity failures. It is vital to encourage and promote open, healthy discourse about risks and risk-taking. A strong tone at the top is the first step, but the desired culture must be carried out every day at all levels of management, as seen through recruiting, rewards, and misconduct decisions

Risk executives should boost collaboration across various risk functions and harness new technologies and tools to develop an agile approach to COVID-19 and the new normal that will emerge. These solutions can assist the organisation quickly give risk insights to support informed decisions by boosting the speed and accuracy of data collection and analysis. COVID-19 has served as a timely reminder that pandemic risk exists and can drastically alter a company's risk profile. It has also made plain that businesses must have a plan in place to manage and monitor all major risks, and that they must be prepared for those risks to rise in the future, no matter how implausible that seems at the moment.

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Risk executives must assist in the management of the changing landscape while also having a place at the table with other senior management members. They must also ask the correct questions now in order to promote a future recovery... and plan for the next significant risk event. Every company needs to have their own process, instead of following a skeleton created by some organization that faced a particular crisis in a certain era. Risk management has been severely underrated during the good times. Given the justice to being the need of the hour in the pandemic, risk management is much more than external blows. Having an appropriate process in house, will help a company eliminate so many internal chaos, and help focus on the larger picture of building a brand and turning the wheels profitable.

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Relevance and need of risk management in a post COVID world and desired steps undertaken to mitigate those risks By MeharKaur, NMIMSMumbai

The Covid-19 pandemic was an epidemic no one saw coming. Even with the rumours of China going under lockdown spreading like wildfire, only a few truly understood the Calm befor e the storm. These individuals mitigated the risk to a large extent by taking the required precautions in time and indeed benefited as an ounce of protection is worth a pound of cure. While the others laid back and saw their plans crumble to pieces. The key difference in both these parties was not that of being the early bird but of accurate risk management. The period of pandemic was an eye opener for many to inculcate risk management in their operations and reduce risk to a large extent. While not all risks are as peculiar as the pandemic, it is essential to be equivalently prepared for the both the seen and unseen with due diligence. Risk management has been a vital component of any business even before the pandemic but with the pandemic even the best laid plan has gone to astray. This period had reiterated the need of risk management and the need for it more than before as we step into the Post Covid Era. To essential understand the need for risk management, it is important to understand that one should always Hope for the best but prepare for the worst. Nothing in life goes as planned and although optimism is necessary, it is also advisable to have back-up plans in hand in case things go south. It not only prevents one from being blind sighted and reduces uncertainty to a large extent but also ensures successful planning. Furthermore, it cuts costs to a large extent and ensures that the reputation of a business is maintained. It acts as a blanket of protection and provides agility to unforeseen circumstances in the dynamic environment. In the volatile, uncertain, complex, and ambiguous (VUCA) environment, nothing is predictable. Although a lot of damage can be contained with the right strategy, you can’t unscramble a scrambled egg. The key to mitigating the risk is to understand it timely otherwise lack of vision could lead to a lack of business. The following graph highlights the process of risk management:

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In order to be on the gr eener side, one must start by identifying the risk. While most rely on historic data and past trends to predict future risk, the pandemic has proven the need to reevaluate the strategy and weigh future possibilities with equivalent importance. While no one can predict the futur e we can take hints from our surrounding. Our business environment being unstable it is important to take into consideration even environment external to our own business. For instance, during the period of Covid-19 in China a lot of business turned a cold eye to the turn of events simply because their businesses were unaffected by the occurrence of a pandemic in the country. But only a few months later, these businesses were hit hard to what they termed as irrelevant.

After the risk has been identified it needs to be analysed. This involves understanding the scope of the risk and the resources the company has to undermine it. Key risk indicators need to be calibrated to provide a “red flag” prior to a risk event occurring. The risk needs to analysed from the perspective of each stakeholder and they impact it would have on them. By leveraging company’s resources and using modelling tools the risks need to be broken down into smaller segments and then studied both as a whole and in parts. This would ensure better understanding of the risk and provide a bigger picture into the endangers. This step is crucial specially during the post covid time and has helped a lot of companies recover from covid damages. Companies who have correctly analysed the risk have also been able to dive into indication of damages from adjustment risks and have devised plans accordingly. Once the risk has been analysed it needs to ranked. Not each risk is equivalently catastrophic and on the based of

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severity of losses each risk might portray it needs to be ranked from highest to the least. Ranking of risks helps in prioritising the limited resources and ensuring their optimum usage. By ranking each risk as per the business environment and the companies positioning, companies were able to control the jeopardy of risks and allocate their resources efficiently. For example, Mumbai Mirror one of the prominent newspaper agencies decided to print papers weekly instead of daily and turned to online mode as their primary medium of business during covid. They wer e able to do so because they studied the initial impact of Covid and their resources and saw decreasing users, rising competition, shift in need, uncertain government decision regarding lockdown as some of most prominent risks. Upon ranking the same, the first decided to user online medium as a secondary source of income but later decided to make it as their primary source. Next step is the treatment of risk. In order to accurately treat the risk multiple viable solutions, need to be devised and be run in a prototype environment. The impact needs to noted and the solution which provides the most relief should be selected. The treatment should be taken keeping in mind all stakeholders and how they would react to it. For example, As Paytym launched its Initial Public Offer (IPO) in the period of new normal, despite its IPO being oversubscribed by retail investors it saw a massive crash in share prices. Upon being question Vijay Shekhar Sharma, CEO compared the fall to that of Tesla’s. After the r esponse the shares have again seen a rise in price.

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He was able to make such a comparison because he had already anticipated the risk of the initial crash and was prepared with a response of increasing shareholder’s confidence.

The last step of risk management is to monitor and review the risk. While a correct action has been taken as per the circumstances it is not necessary that the action would always be correct even after the circumstances change. In order to be certain and control risk even in the future it is ideal to reassess the risk and the treatment and change the strategy if the risk goes beyond the ascertained level. For instance, many companies had earlier halted new hiring and laid off employees as a response to the uncertain covid environment are now ex tensively hiring employees. They are doing so because the circumstances have changed and they see the economy recovering at a phenomenal rate. In my opinion, the period of Covid has proven that while several risks cannot be completely eliminated their severity can be mitigated to a large extent. It has been an eye opener for many organisations and has acted as an opportunity in disguise. When the going gets tough, the tough get going is exactly what the post covid era has bought upon. Most companies are now not only dedicated towards risk management but have also reinvented the way they manage risk. A risk managing culture has been embedded in these organisations in order to treat any risk from its core. More power and autonomy have been provided to each stakeholder in order to prevent chronic damages. Indeed, Adversity and loss make a man wise.

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Reimagining risk management in a post Covid world By Rajat Kumar Jindal & Shalini Pathak, IIFT Kolkata

closely managing suppliers. Toyota was a pioneer in implementing just-in-time as a waste (and subsequently cost) reduction measure. Other companies that adopted the just-in-time system have struggled to deal with the crisis due to minimal inventory levels, leading to a global shortage of automobiles.

Introduction The necessity of a multi-fa ceted approach to risk management against multi-sector disruptions Risk management used to be something of an afterthought only for the largest enterprises able to dedicate specific functional departments to it, or consult outside parties. However, the pandemic has brought organizations’ readiness to implement Business Continuity Practices (BCP) at the very forefront of investors’ minds. BCP not only means maintaining operability, but also competitiveness in such uncertain times. To approach this subject and its relevance in the modern business environment, let us consider the multiple facets that a business needs to consider when implementing its risk management practices and the various steps that should be undertaken, along with studying instances of companies successfully dealing with the pandemic woes on the back of their strong risk considerations.

Toyota, having suffered major supply chain disruptions due to a Tsunami hitting its major production center in Japan in 2011, had experienced the importance of hedging against supply chain risk first-hand. It had, hence, refined its inventory practices, separating the different primary goods required for production based on importance. It recognized about 1,500 parts that were necessary to secure alternatives for or to stockpile, and ensured a monitoring system for its suppliers to predict shocks in advance. A decade later, this practice has been put to the test, and Toyota is riding out the wave strong. By bolstering inventories for goods vulnerable to shocks, such as semiconductors, it ensured that even during the pandemic, it was able to fulfil orders much better than its counterparts. As Toyota CFO Kenta Kon has said, as part of the company’s business continuity plans, it keeps as many as four months of stock for some crucial components such as chips.

Managing Supply Chain Risk Waste reduction alongside stockpiling of critical tier 1 and 2 goods for hedging against shocks

One of the worst hit aspects of business due to the pandemic was the supply chain. Business practices like just-in-time manufacturing have been shown to be the most vulnerable. However, while most companies are still struggling to get things back on track, there are others who have managed to avoid the worst effects. Let us take a look at the automotive industry - Chip shortages may cost the industry $60 billion in sales this year. Still, Toyota has avoided much of the disruption by

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Operational riskImplementing BCP measures fo r continued operations in spite of resource shocks

It is critical to have an emergency plan in place to

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maintain business sustainability. In the current circumstances, it is essential to respond quickly in order to limit damages and other risks, as well as to prepare the organisation for the COVID-19 pandemic's future development and various scenarios. Infrastructure, cyber, personnel, business, operational, and communication risks are all covered by business continuity management, which aims to help organisations handle new challenges and risks while maintaining operational and production continuity. It is important that the organizations change with time and stress test their capacity to respond to complex operational challenges, including reducing the impact on clients and vital services. Some major responses to accommodate operational risks in the FMCG sector include HUL's expansion of the digital footprint, which will make buying safer and more convenient. After one of the worst years for beverage producers in the country due to covid-induced lockdowns, the Paper Boat brand is extending its distribution channels and concentrating on onlineonly releases. Cognizant, a major IT giant, recorded a 33% attrition rate in the quarter ending September 30 this year which is significantly higher than the industry average. Failure of the organization to recognize the changing demands of employees and preparing for the talent gold rush in time during the pandemic led to this historically high attrition rate, significantly impacting continued operations and revenue growth forecasts.

which may often result in permanent loss of revenue - never being able to recover from the pressure put on working capital and liquidity. It is important to ensure that an organization has dedicated treasury management functions. This is true across sectors, as businesses face a cash crunch throughout the value chain. Organizations must ensure to have proper KPIs for accurate projection and benchmarking of cash flows. Outstanding payments should be closely tracked, credit limits with customers must be as tight as possible, and invoice management should be efficient and accurate. Digital transformation plays a key role in implementing these measures, cutting down on manual efforts required for payments and making invoice management streamlined and accurate. Digitization also allows for accuracy in predictive mapping of cash flows and liquidity requirements as well as centralization of treasury management practices - which would allow for better use of scale, and avoid adverse effec ts of fragmented local solutions that are generally costlier to maintain and difficult to monitor.

This is backed up by a JP Morgan and EuroFinance study, which indicates that around 90% of respondent companies are seamlessly adopting APIs, Robotic Process Automation (RPA), AI and ML. Several companies have realised this, and FinTech has become one of the fastest growing sectors in the past year. Companies like Visa, Intuit, SoFi, have all moved towards involving more digital technologies in financial practices, and have spent upwards of $5 Bn, in a few cases, on acquiring FinTech companies to facilitate this. Technological disruption, market changes Investing in the fu ture of technology, Adapting to change in customer preferences

Financial Risks Digital transformation of treasury practices and liquidity forecasting

In times of uncertainty, managing liquidity is another pressing problem brought on across sectors by Covid. Due to several factors hampering business operations, companies face prolonged periods of poor liquidity

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Considering the fast-paced world, it is imperative for the organizations to stay relevant. It is only with technological advancement that a company can achieve sustained growth. This need has surged in the post-pandemic world where e-commerce played a massive role in easing distribution channels. With this realisation, conglomerates like the Tata Group are investing in the super app. Reliance Industries is also trying to create a super app by using the features of local search engine JustDial, which it just purchased. These moves are

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as much a seizure of opportunity in the e-commerce space, as they are a form of risk management against any disruptive startups that may threaten long running business practices of these giants.

Sustainability was already at the forefront of the packaging value chain prior to the COVID-19 catastrophe. Consumers were becoming increasingly aware of the industry's environmental impact, and this prompted companies throughout the world to r espond. FMCG and retail firms pledged rapid action to improve the sustainability quotient of their packaging as a significant part of their value offering. In several countries, however, hygiene considerations took precedenc e over the push to eliminate single-use packaging during the early phases of the epidemic. McKinsey conducted a poll to understand this shift in consumer opinion.The results (in graph below) showed that the pandemic has raised food safety worries, particularly in the hardest-hit nations.

Concluding Remarks and Takeaways The risk management techniques and technology across industries are entering a new era, and measuring metrics, procedures, and technologies will have to be reinvented. This will necessitate a significant redesign of risk technology. This is also a chance to combine numerous point solutions, deploy cloud technologies, and update and improve model implementation technology. As digitization becomes ever more important, the industry will foresee major improvements in Liquidity Risk and Market Risk Models, as well as Regulatory Reporting, from the ALM and Market Risk Management teams in terms of technology and measurement. In the end, this opens up the possibility of automating and industrialising a target-operating paradigm for risk management. No longer is this function an afterthought for businesses, but is increasingly becoming essential for sustained growth.

The organizations need to be mindful of the changes in the customer prefer ences across the world. For instance, the concept of “going green” or sustainable practices is gaining momentum. This "eco-awakening" is occurring not just among consumers in high-income nations, but also in poor and emerging economies, with a surge of 24% in Indonesia and a staggering 1200% in Ecuador. In Brazil, a staggering 96 percent of poll respondents consider environmental degradation to be a severe concern. It is with these changes that Maruti Suzuki Toyota India has opened its first vehicle scrapping facility in Noida, which has the potential to scrap and recycle approximately 24,000 ELVs each year.

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Decrypting the future of Alternative Investments (Cryptocurrency, NFT, REIT, etc) in India By Tanmay Agarwal, Shaheed Sukhdev College of Business Studies, Delhi University Warren Buffet believed that the mantra of becoming rich was to be fearful when others were gr eedy and being greedy when others were fearful. This truly reflects the sentiments of thousands and millions of Indian investors who help channelise millions and crores of funds into the Indian markets. Undoubtedly, the Indian Stock market is one of the largest stock markets in the world and is on the path to becoming the 5 th largest by 2024 as predicted by the American investment and financial services giant, Goldman Sachs. However, the times are changing and so is the investment market. With growing digitalisation, the market has now become more dynamic and adaptable to the rising technological trends. The rise and emergence of alternative investment avenues like Cryptocurrency, NFT, REIT, P2P, etc in India is a testament to the above statement.

The above data based on the report of Mordor Intelligence r eflects the growing use of digital assets in the world. The r eport also suggests that the AsiaPacific market is the fastest-growing market in terms of usage and investments in assets like cryptocurrency, NFT, etc. with a CAGR of 18.46 %. Now, the question arises- Why are people gradually shifting to digital assets in India? There are many reasons for the same. First, the return of investments in these digital assets has been impressive. For instance, the value of Bitcoin, the largest cryptocurrency in terms of market capitalization, has grown leaps and bounds from 1$ in 2011 to 60,000$ in 2021. Ethereum is yet another

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example whose prices have been surging over the years providing enough incentive to investors to invest in these digital assets. Second, these digital assets are very liquid enabling investors to withdraw their money as per their wish. This also makes it a lucrative destination for investment. Third, the virtual world has no time constraints. In other words, the market is open 24x7 for investors. Last, ease of investing is another advantage of investing in these assets. The absence of an intermediary enables investors to open their accounts with ease. Online verification prevents wastage of time and simplifies the entire process of investing. Just like every coin has 2 faces, so does investment into digital assets. In addition to advantages, there are also many limitations associated with it. Liquidity is one of the largest drawbacks. These assets are highly volatile meaning that investors can lose everything in the digital asset sector. Also, it is an unregulated sector which means that no law or rule is governing the usage of cryptocurrency. Although countries like El Salvador have accepted cryptocurrencies as legal tender, many countries still hesitate to take this step. In fact, Nepal and China are two among many countries that have deemed cryptocurrencies as illegal. After all, not everybody believes in the famous dialogue of “risk hai toh ishq hai”.

Though the future of alternative investments is unpredictable many experts believe it to be more technologically and digitally inclined. Famous personalities like Jack Dorsey, Mike Tyson, Maisie Williams, Mark Cuban and Snoop Dogg have shown immense faith in digital assets, some through its very infancy. In fact, Elon Musk, CEO of Tesla, announced the company’s intention to accept Bitcoin as payment. Also, ther e has been a shift from active investing to passive investing with people now buying and holding portfolio strategies for long-term investment horizons, with minimal trading in the market and adopting a “set it and forget it” mentality. Though the entire segment of digital assets and alternative investments has immense opportunities, there are also a lot of challenges and barriers it has to withstand and overcome to increase its coverage, usage and

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and trustworthiness. Even now, Indian investors remain wary of investing in these markets due to the lack of control and jurisdiction of the Indian Government over these digital assets. Also, the constant threat of these investment avenues being banned or restrictions being imposed on these assets looms largely over the Indian investors. For instance, ther e are a lot of speculations of private cryptocurrencies being banned by the Indian Government. However, with every passing day, we often come across advertisements and banners of companies encouraging people to actively participate in this virtual market. Many companies and start-ups like CoinDCX have been set up and are indulging in the business of digital cryptocurrency exchange. Even their tagline “Futur e Yahi Hai” speaks volumes of the way the investment market is changing.

Year

18-35

36 and above

2017

66%

34%

2018

70%

30%

2019

69%

31%

2020

70%

30%

The Indian Market, of late, is also witnessing greater participation of women investors. Investing is no more a “men’s only club”. Women constitute about half of India’s population and their participation is critical to boosting the economic potential of our country. Another interesting trend has been witnessed in the age of investors

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The findings of ETMONEY, a fintech company, revealed that around 70% of their investors belong to the age group of 18-35 years while only 30% are aged above 35. With youth now gradually being the more prominent investors, the use of digital assets is likely going to increase and more investment avenues are likely to emerge. Though many people may have contrasting views regarding the emergence of alternative investment avenues, it cannot be ignored that these have the potential to significantly transform the Indian markets and revolutionise the entire finance and investment sector. The latest trends validate the above statement but it is still unknown what the future holds for these productive avenues. After all, the “wait and watch” approach is all we can adopt at the moment.

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