Finance for sustainability development goals (SDG) is still an area where progress has been inadequate and the amount of climate funding coming is very small compared to what is required, says Sanjiv Puri, Chairman and Managing Director of ITC. Talking in an interview with CNBC-TV18's Parikshit Luthra on the sidelines of the B20 Summit last weekend, Puri also touched upon topics such as inflation trends, the influence of climate change on the global economy, and commenced with an inquiry about how Indian companies could advance the environmental, social, and governance (ESG) agenda.

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Below is the edited excerpts of the interview:

Q: How Indian companies could take forward the ESG agenda?

A: ESG is certainly gaining currency, but we certainly need to mainstream it, we mainstream it into businesses, and there needs to be wider and deeper adoption and there are regulations that are also emerging in this space through SEBI. The facet that has not received sufficient attention is the aspect of adaptation because the world is going to cross 1.5 degrees in the near term —that is what the Intergovernmental Panel on Climate Change (IPCC) says and with that extreme weather events are multiplying. So how do you adapt? Whether it's infrastructure, industrial supply chains, agri value chains, water, and so on so forth? How are we building resilience and adapting to be able to live successfully through the hot new world.

Q: Sustainability was discussed in great detail at the summit. Uday Kotak of Kotak Mahindra Bank was of the view that vulnerable countries would need $4.5 trillion over the next few years to meet their sustainability goals. In your view, when it comes to financing the climate agenda of developing nations, what is the kind of funding, the kind of mechanism we need now?

A: If you look at funding, this is an area where progress has been inadequate and the amount of climate funding coming is very small compared to what is required. Now to accelerate public resources, there are two ideas on the table. One is the facets of how multilateral developmental agencies can play a bigger role in it. The second is, what was spoken about this morning (August 27) on the sustainable development goals (SDG) acceleration fund. And of course, the third that has been discussed, but not sufficiently actioned is how are the developed economies providing resources for the global south, because the cause of emissions lies in the developed economies, the impact has been felt by the global south, in the last conference of the parties (COP) there was loss and damage fund came, but that is only one facet about it.

Now, as far as private capital is concerned, the way to unlock it is to make the economics attractive. Solar is a great example in India, it has become so economical. Now to further accelerate private resources. One, what we have to do is that the development of newer technologies, newer pathways that are being articulated, whether it's storage or hydrogen, and so on and so forth, I think that technology has to be made accessible, either through incentives, viability, gap funding, or made available without IP protection so that it is accessible and economical to people. Second is that wherever there is friction in the regulation that adds cost to it, can we remove that friction? And third is of course, that we have to see how, particularly the MSME segment, which may not be able to make entire investments on their own. So, create some models on a cluster basis where the assets can be on a shared basis.

Q: Right now, we are seeing retail inflation at 7 percent plus; and food inflation at 11 percent plus. This is the government's big priority right now — taming inflation. How do you see this impacting consumption in the country right now, your outlook on consumption?

A: Inflation is on account of two factors. One is external factors and the second is the climate emergency. The world is facing this inflation pressure. India has managed it. I mean, I must compliment policymakers for astute management of this. Of course, when there is inflation, it impacts consumption. As inflation has moderated, we have seen the green shoots of pickup and consumption in the rural aspects. The current inflation that we are seeing right now, is also to some degree transitory because of the weather events in this part of the year— some horticulture items do get impacted traditionally, and we have to monitor El Nino at a tactical level and at a more strategic level we have to build resilience in our agri value chains, both from water perspective and also from agronomy practices. So that the agri-value chains are more resilient. Global demand is not good. So, in India, if you talk about consumption, I think anything that is indexed purely to the India story is resilient. Anything that is more connected to the external is not in a good wicket.

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(Edited by : C H Unnikrishnan)

First Published:Aug 28, 2023 4:31 PM IST