Sakshi Bansal on Emerging Markets and ESG Challenges

Humanitarian psychologist, Sakshi Bansal is a strategy consultant and sustainability advisor for Arup and the recipient of The Diana Award – the highest civilian award for humanitarian work across the globe.

She is also the world’s first UNESCO Kindness Leader based on her work as the founder of Project LEAP, a social service project with over 300 volunteers based in India, Sri Lanka, Nepal, pan Africa and throughout Australasia, who deliver capability development training to climate activists and sustainability leaders around the world.

Would you say that organisations have a greater understanding of the value of ESG  and now see how environmental, social, and governance criteria go beyond simply ethical concerns?
To answer that we first need to look back at where and how ESG originated – I think it’s really about for the first time how consumers, citizens and civilians changed the way organisations operate. If we look at Pepsi for example, some time ago it became increasingly difficult to continue to operate and sell products that weren’t good for your health. As such, consumers started to say we’re not going to buy these products anymore. That led to a drastic shift in how Pepsi operated and how the products they sell were made. It was clear there was consumer demand for better Pepsi products and as a result their products did indeed change to become healthier.

This type of behaviour is exactly what makes investors sit up and take notice, this then becomes a deciding factor when it comes to investing in a company or in the growth of a company.

This has now led to the growth of ESG, which is essentially an acronym for environment, social governance. And it’s a set of factors that investors look at before they decide whether to invest in a company or before they decide whether a company and their investment will sink or swim.

What are the factors that underpin the very wide criteria of environmental, social and governance?
For me it is more about what ESG enables. How it enables organisation to link good performance – good, healthy financial performance – with doing what’s right for environment, people and the planet. To then mobilise money behind these often very lofty ambitions.

A shift in thinking for ESG means rather than concentrating on how to sell 160,000 cans of Pepsi in Indonesia but looking at how are you going to manufacture the 160,000 cans of Pepsi in the first place to better benefit the environment, people and the planet. It’s the early stages where ESG has the impact.

I also believe that out of the three, the social and the governance are tricky – people haven’t got sufficient attention on social and the governance, people struggle to define what it really means!

Where do you think the biggest intersections are between the built environment and ESG and where are you seeing the most common trends in that space?
Energy efficiency of our buildings and their carbon footprint has become incredibly important. The industry is looking hard at what are carbon emissions, how do we measure them and how can we reduce our cardon output. It’s also about decommissioning our buildings and re use of materials to minimise waste.

Is this the case globally or does it vary across regions?
Presently my focus is on growth of emerging markets and I can certainly say that emerging markets have some very obvious challenges when it comes to building methods and carbon emissions.

One of the major challenges is unlocking finance or gaining access to finance. Particularly when it comes to renewables and giving way to hydrogen. All of these programs that we know are good for the environment and sustainable are still very new to some regions and not yet supported as they are in other parts of the world.

Finance is needed to power R&D. New ways of working requires an ability to take risk which is a privilege of the Western World, and absolutely not something you can do without finance. It requires a lot of investment and in capability and trust in capability. So I think all of these things that we need to make the sustainability side of built environment happen, depend on access to finance.

And just as important it’s a about knowledge and skills, the skills gap is often talked about, but it is very real. There is a considerable lack of skill in industry to enable ESG strategies to be delivered successfully.

You have talked about fundamental principles of finance, resources and skills, what are the next steps to getting this baseline right in order to see progress?
No single person can solve this. No single discipline can solve this. It’s s not an economist job to solve it. It’s definitely not a bureaucrat’s job to solve it. It’s about different disciplines coming together. And that’s what I’m really passionate about is getting different disciplines in a room and seeing what emerges, because that is really when we start thinking about solutions that will last.

I would really like to say that wherever people are in their career journey, early, mid or senior, it doesn’t matter. Wherever people are in terms of their educational journey, or expertise journey, or whatever discipline they are from – sustainability is not a choice and we need to take it upon ourselves to contribute to it. I don’t want anybody to wait to be told to start being more sustainable, or wait for things to go wrong before they take actions, it is time to take action now.