http://www.thediversityblog.com
May the Cosmos conspire: My hope is that you will not take pure air, clean water and productive soils for granted as my generation did. That you will, instead, respect and venerate these as the priceless gifts as our ancestors did.
Praveen Gupta: In the last 5 decades of your involvement with Nature – what has indeed changed for good?
Bittu Sahgal: Two specific developments offer me hope.
First… young people from the four corners of the earth have witnessed, and are convinced, that our climate crisis is a direct result of the unfettered use of fossil fuels, coupled with the destruction of species diversity contained within Earth’s diverse biomes and ecosystems.
Second… our young realise that better planet management, and cooperation, will offer the long-term food, water, social and economic stability humans desperately need to survive the trials of life.
PG: What needs to desperately change with due urgency?
BS: Humans must accept, with humility, that adapting to bio-spheric imperatives, is a better survival strategy than relying on the nascent, untested technologies currently being deployed by us to refashion Earth’s biosphere.
It’s an anthropogenic climate misadventure. The result of believing that humans have become the gods we invented.
PG: How would you define the Climate Crisis that many around us still refuse to recognise?
BS: It’s an anthropogenic climate misadventure. The result of believing that humans have become the gods we invented. Climate economist Lord Nicholas Stern, Head, London School of Economics’, India Observatory, put it best in his landmark 2006 report, The Stern Review on the Economics of Climate Change: “Climate change could lead to the greatest market failure ever.”
PG: Your message to the young?
BS: My generation of elders are less wise than they claim to be. They are colonising your ecological future. But it is not too late to restore Earth’s balance. Working with nature you can and must start on the long road back to planetary stability by flowing with nature’s tide, instead of fighting to change its flow.
“Climate change could lead to the greatest market failure ever.”
PG: Your vision for the next 50 years?
BS: Charles Darwin’s stark ‘adapt or die’ prediction, coupled with Richard Dawkins’ Magic of Reality will become the mantra to reboot our planet.
As the COVID-19 pandemic proved, skies will turn blue again and rivers will run clean. Forests will regenerate. And the oceans will slowly begin to stabilise Earth’s climate. History will record how ignorance, avarice, arrogance and apathy combined to push Homo sapiens to the very edge of disaster. Stability and stasis will replace economic growth as the holy grail of long-term sustainability.
Economic choices have always been determined by scarcity and choice. And survival has always involved actions based on risk analysis. My generation has left you a world with fewer choices and greater risks. But it’s still a beautiful planet and you will still wake up each morning to the wonders around you. My hope is that you will not take pure air, clean water and productive soils for granted as my generation did. That you will, instead, respect and venerate these as the priceless gifts as our ancestors did.
PG: Many thanks Bittu for sharing these pearls of wisdom and hope. Here is wishing you A Blessed & Happy New Year!
Drawing from this timely story by Zuha Siddiqui for http://www.thethirdpole.net
December 26, 2022
Not too long ago, Karachi like Mumbai was part of the erstwhile Bombay Presidency. Cyril Radcliffe’s masters – wary of India’s proximity to Russia – did not wish an independent India access close to the Middle East’s oil. That is all history. Despite being on either side of the border, we continue to invite the wrath of climate forces. What’s reportedly been happening to Karachi gets dwarfed by Mumbai. The exposure to two other port cities – Chennai and Kolkata cannot be missed either. Author Amitav Ghosh tells us in his book ‘The Great Derangement’: “The reality is that ‘growth’ in many coastal cities around the world now depends on ensuring that a blind eye is turned towards risk.’’ Most residents generally remain blissfully ignorant as to where the seven islands – that constitute Mumbai – begin and end.
Banks continue lending for the ongoing asset buildup frenzy as do insurers concentrate the risk they carry and investments they make. Mangroves are under pressure, so is whatever remains of the green cover. An exploding population, rise in number of vehicles, resulting pollution, plastic menace, et al – will only aggravate with sea level rise. Ghosh, backed by scientific research, continues to warn us about the increasing frequency and severity of cyclones on the west coast. Its possible ramifications for the two nuclear facilities in the close proximity. Needless to mention concentration of country’s financial services and likely challenges in evacuating the population in event of an emergency.
“Karachi is among the world’s least liveable cities, ranking 136th out of 140 on the Economist’s Global Liveability Index. Warning signs of the impending climate crisis have been compounded by local authorities’ reluctance to mitigate its harmful effects by building climate-resistant homes and buildings, and ensuring the upkeep and maintenance of the city’s storm-water drains, which are choked with plastic waste”. Can we afford to lose sight of what Zuha Siddiqui has to say in thethirdpole.net? Or is it, “our collective inability to come to terms, or even imagine, the catastrophe that is currently staring us in the face from climate change. Depending on how bad it gets, present generations will remember our failure to confront reality with bafflement and probably rage”?
#strandedassets #climateemergency #biodiversity
My column for Illuminem: December 22, 2022
https://illuminem.com/illuminemvoices/a4bd0ef7-2486-4061-97c2-4586a505448f
An introspection and contemplation on what we stand to lose and at what price?
My year end column for illuminem draws heavily from the brilliant Maria Popova. We furiously continue to lose what we have. But do we really know all that we have? The magical biodiversity continues to unfold, reveal and amaze.
Rupert Read tells how “Avatar 2 should make us completely rethink our relationship with the planet”. He rightly warns that the #cop15 accord will be a paper tiger unless there is the will to implement it.
Marlene Greenhalgh shares some harsh truth. “The grave danger of the orgy of mutual self-congratulation that met the announcement of the Montreal accord is that it will encourage complacency among the public. It will give them (us!) the story that we all want to hear: that things are going to be ok; that we can safely outsource worrying about this more-than-issue to our governments; that they have this covered… Optimism of the intellect is not what we need at this time. For it amounts to little more than wishful thinking writ large. What we need is courage: to look the very difficult truth in the face. And a profound determination: to work together to start to build a different system; and to pressure this system we live under to transform”.
Daniel Christian Wahl has a time-tested prescription: “One way to rediscover the practices that helped Homo sapiens survive for over 200,000 years is to pay more attention to #indigenous wisdom and traditional place-based knowledge (where it has not already been completely lost). Indigenous human cultures are an expression of generations of co-evolution of humans within the ecosystems they inhabited… Cultures that have managed to survive for millennia within their bioregions have a lot to teach us. Over the last few hundred years we have developed the unfortunate habit of dismissing such knowledge as antiquated and calling such cultures ‘primitive’. Hypnotized by the apparent benefits of scientific and technological progress we made the mistake of dismissing traditional ecological knowledge that underpinned human survival for most of prehistory”.
Whatever, we continue to lose is not coming back. “Humanity is a weapon of mass extinction” to quote the UN Chief.
No form of insurance would protect us from that!
The Chartered Insurance Institute Journal: December 16, 2022
https://thejournal.cii.co.uk/2022/12/16/redressing-balance
My blog for the Chartered Insurance Institute Journal on #lossanddamagefund – which finally saw light of the day at the #COP27 – after three plus decades of discussion and negotiations. The insurance industry has been muted, thus far, in its response. While insurers have no role here, there is a room for synergy and a scope for learning. Climate losses are not the monopoly of #GlobalSouth alone. 2022 has demonstrated the firepower of ‘Mother Nature’ pushing back ‘Father Greed’. #GlobalNorth has borne a significant brunt.
Hardening insurance premia for natural catastrophes only evidence the fact that these losses are hurting #insurers and #reinsurers. Scientists tell us it can only get worse as global temperatures rise. Just that the small island nations and the lesser developed countries have been impacted for virtually no fault of theirs. Experience from handling of loss and damage portfolio could provide significant learning to the insurance industry in areas of adaptation, mitigation and resilience building. Needless to mention the likes of climate modelling, scenario planning and product development.
Loss and Damage would not only be a boon to the vulnerable countries but also signals a long overdue transformation of the global multilateral financial institutions. From Bretton Woods we could be in for a Bridgetown Initiative as envisioned by Barbados Prime Minister Mia Amor Mottley. The tireless and heroic work of island nations in particular has got us here.
Tyrone Hall, PhDRoger-Mark “R-M” V. De SouzaAngelique PouponneauKera Sherwood-O’ReganMairi DuparLisa McNamara
http://www.thediversityblog.com
Meena Raghunathan has a rich experience of 35 years in the development sector. Much of it as a part of Centre for Environment Education, an NGO. She founded Corporate Social Responsibility (CSR) function for a major infrastructure group – with a focus on Education, Health, Skill Training, and Livelihoods. Meena serves on corporate and non-profit boards. She has considerable exposure and experience in corporate strategy and policy making.
Meena has several publications to her credit including the most recent book DOING GOOD: NAVIGATING THE CSR MAZE IN INDIA (Harper Collins). She teaches Ethics, Sustainability and Responsibility, and has played a quasi-academic role – developing textbooks for various levels, including the first textbook on Environment for the Undergraduate level. She has also contributed to key policy documents including India’s official submissions to the Earth Summit, Rio de Janeiro, 1992, and World Summit on Sustainable Development, Johannesburg, 2012.
Apart from her outstanding work in the development space, Meena is also highly regarded for institution building and setting up related systems & processes.
PG: May I ask what is the paradox of doing good and being good about?
MR: Let me talk about the situation in India. As you know that the law mandates that large companies, must spend an average of 2% of their net profits of the last 3 years on CSR. The menu of thrust areas of allowable CSR activities is also specified.
The CSR activities are usually done with good intent and also have good impacts – I have no doubt about that. What concerns me is that CSR, which is supposed to move business-thinking from profit towards purpose, from shareholder focus to stakeholder inclusion – that is completely ignored. So when a company spends its 2%, and spends it well so as to see some good changes, say in local schools, or in women incomes, it is as if it is socially responsible. This confuses the issue – as if social responsibility is about spending some part of the profit, rather than worrying about how the profit is made. So a company that is not very careful about the pollution it causes or the disruption to the local community that it creates, can still tick the CSR box by spending 2%.
This is the contradiction of the spirit of CSR – when companies spend the mandated 2% on one of the ‘allowed list’ of activities, the Law is satisfied and everyone starts believing that they are socially responsible. However, social responsibility manifests when businesses make their core business decisions, ensuring at the very least that they do no harm to their neighbours, to the environment, to society. But the CSR Law de-links this critical connection. So as far as core strategic and operational decisions are concerned, it is business as usual. And then, as a completely separate activity, 2% is spent on some social development activity.
The Law asks companies to pick any activities from the list of allowable activities. There is no stress on materiality. The CSR activity can be completely de-linked from the negative externality that the company causes. For example, a corporate may be depleting local groundwater resources or causing pollution. But it may be spending its CSR money on training rural athletes. Ironically, a vaccine manufacturer wishing to inoculate a target population would not entitle it as a CSR activity.
This to my mind is ‘doing good’, not ‘being good’. ‘Doing good’ as in ticking a box by spending a specified percentage of profits. But ‘being good’ is about a business introspecting and moving its world view from a profit focus to optimizing economic, social and environmental outcomes; moving from a shareholder perspective to a stakeholder perspective; making a shift towards business decisions with communities, society, and the environment as core considerations, rather than seeing them as externalities to be managed; a shift from management processes to governance standards.
It is about how profits are made, rather than how they are spent. To me, this is a critical issue, and one that the law and its implementation are confusing. Hope this changes soon.
‘CSR is a vague and intangible term which can mean anything to anyone, and is therefore effectively without meaning.’
PG: In your book you mention that there is no clear, unambiguous, and universally-accepted definition of Corporate Social Responsibility?
MR: Indeed! The term itself was coined in 1953 by American economist Howard Bowen in his book Social Responsibilities of the Businessman. Since then, many academics, practitioners, policymakers, and institutions have given their own definitions, but not one of these is universally agreed upon or used. The understanding of CSR is contextual – it differs from country to country, from decade to decade, company to company, and stakeholder to stakeholder. I agree with Peter Frankental (2001) of Amnesty International who goes so far as to say, ‘CSR is a vague and intangible term which can mean anything to anyone, and is therefore effectively without meaning.’ I must refer to the work of an academic, Alexander Dahlsrud (2006) here. He decided to statistically examine thirty-seven widely-used definitions of CSR. He makes the point that ‘none of these definitions actually defines the social responsibility of business’! However, he does find five widely prevalent threads across these definitions: the Stakeholder, the Social, the Economic, the Voluntariness, and the Environmental dimensions.
PG: Does the law further complicate this situation?
MR: Indeed it does. It even misses some of the five dimensions mentioned in Dahlsrud’s analysis mentioned above.
The Law of course does not define CSR, but it implies that carrying out an activity related to Education, Health, Women Empowerment, et al is CSR. So if we come to more updated thinking on CSR, we can see it does not go by most definitions – e.g., one given by the academics Andriof et al. (2002) which defines CSR as the ‘recognition that day-to-day operating practices affect stakeholders and that is in those impacts where responsibility lies, not merely in efforts to do good’, or the UNIDO definition: ‘Corporate Social Responsibility is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders.’
I feel that the way forward is to have a serious multi-stakeholder review of the law, given not only these concerns but the changing business environment. ESG is gaining huge importance. How do we make CSR something that pushes businesses towards a more holistic stakeholder perspective? How do we put it at the centre of strategic decision making? How does CSR relate to ESG? We have the Business Responsibility and Sustainability Reporting requirement for the top 1000 companies. Right now, it is a completely disjointed piece of reporting – from my experience, there are 5 different departments filling different sections, without any effort to reflect holistically on what it all means. The law will complete 10 years in 2024. So this is the right time to carry out such an exercise of reflection. And worry how to move from ticking boxes on environmental, climate change and social issues, to really internalizing the spirit of responsibility with regard to these.
PG: We have had a tradition of philanthropy, there is also a wave of new gen philanthropists. Then there are do gooders ‘below the radar’ who will anyway continue doing good – CSR or no CSR?
MR: Yes, India has a rich tradition of philanthropy. For instance, I believe the Rig Veda has a chapter devoted to charity, dharma, karma, reverence for life, and recognition of the interconnectedness of life. All religions do in fact stress on giving. However, scholars like Pushpa Sundar lament that there is not adequate research on our philanthropic history. But some trends are clear. During the late nineteenth and early twentieth centuries Indian businesses grew significantly and newer ways of giving became dominant. Essentially led by very wealthy individuals who had made their money from business. In fact, some scholars say that in the early nineteenth century, apart from the Western world, the CSR concept was significantly developed only in Japan and India.
The British Government definitely did not appreciate any support to the Independence struggle. But many industrialists supported the movement, both overtly and covertly.
Those were the times of the Raj, and the British Government definitely did not appreciate any support to the Independence struggle. But many industrialists supported the movement, both overtly and covertly. I would like to quote my favorite example. When Gandhiji first came to Ahmedabad, he set up his ashram at Kochrab. He invited a Dalit couple – Dudabhai and Danibehn – to come and live at the ashram. This led to considerable agitation among the ashram’s neighbours as well as many funders, leading to a financial crisis which forced Gandhiji to think of shifting the ashram. And then one day, in Gandhiji’s words: A car drew up near our quarters and the horn was blown. The children came with the news. The sheth did not come in. I went out to see him. He placed in my hands currency notes to the value of Rs 13,000 and drove away. I had never expected this help, and what a novel way of rendering it! (Mehta, 2019) This gift saved the Ashram. It is well known that the ‘Sheth’ was Ambalal Sarabhai, one of the foremost industrialists of the time. However, neither he nor Gandhiji ever admitted this!
Jamnalal Bajaj was another example. He was considered Gandhiji’s fifth son and adopted all his values – from ahimsa (non-violence) to his dedication to the poor, to his commitment to locally made goods, and his patriotic spirit. Bajaj was an active member of the Congress party, and gave up the Rai Bahadur title conferred on him by the British and joined the non-cooperation movement. Importantly, Bajaj, in line with the trusteeship concept propounded by Gandhiji, felt that inherited wealth was a sacred trust to be used for the benefit of the people, and dedicated most of his wealth for the poor and underprivileged.
It was private philanthropy that led to the creation of institutions like the Indian Institute of Science (IISc) in Bengaluru and Tata Institute for Fundamental Research (TIFR), Mumbai. It is said that J.N. Tata mooted the idea of contributing to an institute like IISc as early as 1898, long before Carnegie’s endowment to set up a technical school (today’s Carnegie Mellon University).
Bain’s India Philanthropy Report, 2022 says it is ‘often an emotional and impulsive decision’.
No less is individual giving. A lot of it used to be to and through religious institutions, but now it is getting more and more secular. However, this is not very organized. Bain’s India Philanthropy Report, 2022 says it is ‘often an emotional and impulsive decision’. The reports says that since 2015, it has been growing 5% every year, and totaled to INR 28,000 Crore (1 crore = 10 million) in 2021. But the report forecasts that with the rapid growth of our middle class and the increase in the number of donors, this will soon start to grow at about 10% annually and contribute one-fourth of total private giving by FY 2026. I would think that it is more – we in India, don’t often talk about our giving. And also many people are giving more and more, which may not all be captured. For instance, many people support the children of their staff to get a good education; they help out during health emergencies; they help them build houses. So I think there is much more than we can account for.
We have Azim Premji, the Nilekenis and Kiran Mazumdar Shaw who have signed the Giving Pledge, but so many other high net worth individuals, who are contributing to some facet of development or the other. But in India, we have a middle-class equivalent of the same – the ‘Living My Promise’ is a pledge many are taking to ‘give back at least 50% of my wealth to charitable causes of my choice while I am alive or in my will’.
Another interesting facet is giving by ‘old’ business families, and the newgen entrepreneurs. Mark Sidel (2000) refers to a phenomenon he calls ‘Bengaluru philanthropy’ (because Bengaluru-based IT companies have typically led the phenomenon). This is the philanthropy of the new-economy companies. It is led by individual first-generation entrepreneurs who have created their wealth themselves and therefore are not shackled by family pressures on how much they may give to social causes, nor are they bound by family traditions on what to support and how.
The journey of achieving compliance to CSR law has not been too difficult. Most companies are today spending what they are supposed to, and are ticking all the boxes. But that does not mean the spirit of CSR has taken root.
PG: ESG is not too well embedded here – does that make the task of CSR more onerous?
MR: ESG is the buzz word, and companies are rushing to show their credentials! Whether it is the optics or the spirit, it is difficult to say.
But I would say that ESG and CSR are not two journeys. There is only one journey – to becoming a more responsible business; of moving away from a sole focus on profits, to one towards purpose; of not putting shareholders at the top of the heap, but paying due respect and attention to all stakeholders, including the environment; of embedding good governance.
The journey of achieving compliance to CSR law has not been too difficult. Most companies today spend what they are supposed to, and are ticking all the boxes. But that does not mean the spirit of CSR has taken root.
At one level, I think, on all these issues, compliance and ticking of boxes will happen over the next few years. But about the spirit, it is a much more difficult journey, which will need a very serious change of mindsets.
Are children staying in school? And even when they are, are they learning? Results on these fronts are worrying, says Meena.
PG: Your work with children’s education – one of the most vulnerable segments of our society – what is working and what is not? How could CSR help?
MR: The issue of getting children’s education right is really crucial for our country. Some things have worked – we are able to show pretty close to 100% enrollment. But what happens after that is the big, big question. Are children staying in school? And even when they are, are they learning? Results on these fronts are worrying.
A huge chunk of CSR spending goes to education – in the first 6 years after the law was mandated, 30% of the total CSR spend went towards this cause. Some of it goes towards physical infrastructure of schools around a business; some towards improving quality of teaching-learning through training of teachers, deployment of extra teachers, or learning aids, kits; sometimes towards computers and e-learning. Sometimes it is in the domain outside the school – e.g. providing after-school tuitions. Or it may be target individual students, eg., towards providing scholarships for meritorious students. Or actually adopting or taking over or building new schools. Sometimes these are large scale – with corporates taking up whole districts. Sometimes it is just a few schools. They are working at one level and not working at another. So if I work with 5 schools, they may actually show good results. But are those results sustainable once the company withdraws? Are they scalable, replicable, adaptable? And is there the willingness in the system to do this?
There are many ways CSR can make a difference – does the company want to innovate and create new models? Does it want to work intensively and make a difference here and now in a small number of schools? Does it want to bring change at systemic level?
I think that every company must set their objectives thoughtfully, with clearly stated impacts that they wish to achieve. And put in place best processes and systems and implementation mechanisms. But we must recognize and respect that different companies have different resources, different ambitions, different challenges. I think even if a company works with 2 schools and improves learning of 100 children, that is great. If another sets out to work with 10,000 schools and is able to improve their performance, that is great too. They are both making a difference.
I also think that there needs to be special attention to the pre-school age, ie, under 6 years. Currently, the anganwaadi system is more of a child-minding and feeding approach. The focus has to shift to proactive educational inputs – education that is not only the 3Rs, but lays the foundation for holistic development of the child, intellectually, socially, psychologically, physically, every which way.
PG: Grateful for all these wonderful first hand insights, Meena! My best wishes for all your ongoing endeavours.
http://www.thediversityblog.com
December 2, 2022
Amongst the many – at the recent Sanctuary Wildlife Awards 2022 – I was honoured by the iconic Bittu Sahgal with a spotlight and a generous mention:
“PRAVEEN GUPTA
Former CEO, Insurance Risk Expert and Climate Impact Observer.
After a pioneering lifetime spent at the very top of the insurance sector, you have made it your life’s mission to wake economists, actuaries and investors who have grossly underestimated the risks posed by the climate crisis.
Your lucid and credible communications are read by thousands which is changing the very fundamentals of risk estimation caused by cyclones, floods, droughts, crop failures, landslides and even future pandemics. Human rights and ecological justice sectors have begun carrying your message to those most affected… the victims young and old, and investors who now hesitate to throw money into stranded infrastructure projects. You are making a phenomenal difference”.
In doing so, with a single stroke, Bittu mainstreamed Insurance into the world of Nature and Biodiversity. Something long overdue. Over 4.3 billion people, more than half the world’s population, depend upon #biodiversity for their livelihoods. They are among the most impacted by climate change. Insurers must focus on the good they can do rather than aid and abet the loss of nature and biodiversity…
ILLUMINEM: November 24, 2022
This column: https://illuminem.com/illuminemvoices/7e4e4d55-09d9-4fb3-8e18-88585cbb2123 covers some chinks in the armour that came up for discussion whilst the #COP27 was on. ‘Loss and damage’, only one to surface inside the ring, ensured an exothermic end to the COP. “A fund for #lossanddamage is essential – but it’s not an answer if the #climatecrisis washes a small island state off the map – or turns an entire African country to desert, warned UN Secretary General António G. “It didn’t quite deliver”, believes Alessandra Lehmen. And this strong pronouncement from Thomas O. Murtha: It’s “just monetizing a crisis for profit”. Handing over an empty bucket, to the most vulnerable of countries in #GlobalSouth, was bound to evoke strong responses, such as these. Is anyone surprised?
Prognostics of a few tools coincidentally popped up whilst the COP was on. For instance, climate #modeling failing to capture strengthening wintertime North Atlantic jets and impacts on Europe is under scrutiny. #Pricing and #reserving shortcomings’ ability to aggravate and trigger #existential crisis for insurers – just when they need to be most stable. As a consequence, they could be flying blind in an adverse climate change situation.
Tamara Close, CFA focuses on ‘climate proofing’ investment concerns. Prof. Shiva Rajgopal, on the other hand, analyses top ten U.S. P&C insurers vis-a-vis Axa, which he considers as the current gold standard in Climate risk management. His grave reservations translate into a three-part sequel for the Forbes. Must also mention the Blended Finance Group’s release of its pathbreaking report ‘Riding the Dragon’ as the theatre of the absurd unfolded at Sharm-al-Sheikh. #Anthropocentric misadventures in the #ESG arena (#greenwashing, and its ever-growing manifestations included) will invite serious wrath in the form #fiduciary#breaches and #litigation.
With vested interests slowing and blocking desired measures, are we headed for one last resort? These words of author Robert Christie may just turn out to be prophetic: “The only potential leverage that seems to remain is for the mobilization of large populations to form social movements that are too big to fail. That may be very difficult to accomplish, but it will become increasingly feasible as global conditions become much worse and political regimes become more unstable”.
Blogpiece republished by Climate and Capital Media, Australia: Interview features as the top story.
REPORTS AND ANALYSIS | | Nov 8, 2022
Former international insurance CEO, Praveen Gupta, a thought leader on financial governance and risk, looks at the RBI’s climate change consultation process in the context the global finance sector’s and regulators’ approaches to climate risk, drawing on examples from various world economies.
