Illuminem
December 18, 2024
https://illuminem.com/illuminemvoicesprofile/praveen-gupta?post=ozone-slayers-reincarnated
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A little over 30 years ago – our world was on a precipice. Growing usage of #CFCs had literally opened up a hole in the sky. Thus exposing a rising number of inhabitants to deadly ozone exposure.
Time magazine of May 17th, 1993 – carried a brilliant two pager (‘Ozone Slayers’) by eugene linden. It highlighted how the mess created by American politics was messing up with the environment.
A visionary that Eugene is – he correctly anticipated a bigger mess in making (then) arising from rapidly surging greenhouse gas emissions (#GHGs).
I am inclined to draw a parallel between yesterday’s mess and today’s. Notwithstanding the much larger scale of the current challenge, the political muddle in the US reads like a replay.
Could we step out of the adverse ramifications, yet again?
Here, I take the liberty of oscillating between the past and the future, in present tense: To ensure we stay steadfast to our belief and responsibilities.
Despite a damning essay – Eugene kept his faith in our ability to course correct by his phenomenal ongoing work.
“I have five kids and grand-kids, I have got to be optimistic” – he says.
Sanctuary Asia
My column: Climate Futures and Beyond
December – January, 2024
By a lucky twist of fate (read markets), the insurance industry has a personal stake in mitigating and adapting to climate change, and inadvertently protecting the environment. The overlapping crises of a warming climate, biodiversity loss, and pollution present grave dangers to life, livelihood and industry. Owing to its expertise over multiple decades in dealing with risks, the industry is well placed to analyse the threats posed by the polycrisis, and suggest ways to manage and mitigate its fallout. The first item on this new column by Praveen Gupta is PFAS, a toxic bioaccumulating substance that has invaded the biosphere, and the insurance industry’s risk portfolio.
The Journal (CII) Op-ed published by Illuminem
December1, 2024
https://illuminem.com/illuminemvoices/dangers-of-the-new-asbestos
With the use of so-called ‘forever chemicals’ beginning to result in lawsuits, Praveen Gupta examines the risks for the insurance markets.
Losses related to per- and polyfluoroalkyl substances (PFAS ) – referred to as the ‘new asbestos’ – ought to serve as a warning for insurers on the regulations and liabilities. However, are the lessons being learnt? PFAS are widely used in shampoo, feminine hygiene products, mobile phone screens, wall paint, furniture, carpets, adhesives, food packaging, cooking surfaces such as Teflon, firefighting foam, and the insulation of electric wire. PFAS are also used by the cosmetic industry in most cosmetics and personal care products, including lipstick, eye liner, mascara, foundation, concealer, lip balm, blush and nail polish.
Blog interview published by Illuminem.com:
November 28, 2024
Dr. Alessandra Lehmen is an outstanding Environmental and Climate lawyer qualified in the US and Brazil. She has an LL.M. degree in Environmental Law and Policy from Stanford, a Ph.D. in International Law from UFRGS and an MBA from FGV. Alessandra is a Postdoctoral Laureate at the Make Our Planet Great Again Program of the Presidency of France.
Alessandra was at the COP29 as Climate Law and litigation expert.
PG: Climate Finance/New Collective Quantified Goal (NCQG) first. Your take please?
AL: Developed nations have agreed to “take the lead” to channel “at least” $300 billion a year into developing countries by 2035. These flows of capital are vital to developing countries and to keep the 1.5-degree goal alive, and, without accounting for inflation, this is three times the Copenhagen 100 bn, set to expire in 2025. However, the new NCQG number if still largely insufficient to address mitigation, adaptation, and L&D financing needs. Amidst intense debate as to whether a bad deal was better than no deal, the new goal was objected by countries like India and Nigeria (but the text was adopted anyway), and was met with disappointment by many developing nations.
Beyond the numbers, there are noteworthy changes in wording as to sources (calling on “all actors” to scale up funds from “all public and private sources”, including MDBs, to “at least $1.3tn” by 2035) and contributor base (encouraging developing countries to contribute to climate finance “on a voluntary basis”). With an aim to close the finance gap, the “Baku to Belém roadmap to $1.3tn”, a last-minute addition to the text, is now tasked with producing a report on how to scale up finance at COP30 in Brazil.
The good news is that, according to the IPCC AR6, “There is sufficient global capital to close the global investment gaps.” The bad news is that there are barriers to redirect capital to climate action.
PG: May I ask what next?
AL: There is much finance work ahead.
First, we need a clear understanding of what actually counts as climate finance, as it can be assessed through several criteria – for instance, by type of finance instruments (e.g., development aid, equity, or debt); whether it is provided at market or concessional rates; by origin (from public, private, or blended instruments; whether it stems from national or subnational governments, development financial institutions (DFIs), private financial institutions or multilateral funds; by direction of finance flows (domestic, bilateral, or multilateral); whether a project is considered only for the elements that genuinely have a climate component, and so on. Another source of uncertainty is the assessment of whether climate finance is ‘new and additional’ under Copenhagen as this is a concept that lacks formal definition and is therefore subject to interpretation. Also, data regarding climate finance flows are gathered through various methodologies, each with its own interpretations, so we need better metrics.
Second, we need to develop models that don’t drive countries further into debt. De-risking is necessary, but non-concessional models that tie developing countries repayment of high amounts of debt service do more harm than good.
Third, at the risk of stating the obvious, we need to review subsidies: according to the IMF, fossil-fuel subsidies surged to a record $7tn in 2022.
Fourth, and perhaps more importantly, to redirect the global flow of capital, economy-wide, to the climate transition, per Article 2.1(c) of the Paris Agreement. Despite efforts by the United Nations to create universal categories that promote transparency and accountability, there is still no consensus on what counts as climate finance, and these ambiguities make it harder to assess the amount of resources that have actually been mobilized, and, most importantly, still need to be mobilized for climate projects. The good news is that, according to the IPCC AR6, “There is sufficient global capital to close the global investment gaps.” The bad news is that there are barriers to redirect capital to climate action.
The report adds that “Barriers include institutional, regulatory and market access barriers bridge the investment gap required for climate action”. So I think securing additional funds for mitigation and adaptation is of course important, but perhaps the primary challenge is to redirect the money pipeline in order to align global capital towards climate.
As imperfect as climate multilateralism is, we’re worse off without it. Either way, in the lead-up to COP30, in my home country of Brazil and where a new set of NDCs is due, we’ll need to ramp up not only ambition, but, crucially, implementation.
PG: Carbon markets – a breakthrough?
AL: COP29 broke a decade-long stalemate and delivered on both Article 6.2 (country-to-country trading) where high-level decisions with regard to authorizations, registries, and integrity/a process to identify and correct inconsistencies were reached; and Article 6.4 (Paris Agreement Crediting Mechanism), with the establishment of a mandate to Subsidiary Bodies to ramp up implementation, mandatory human rights checks, and alignment with the “best available science”. Carbon market discussions are highly technical and complex, and therefore slow, but with the consensus reached at COP29 markets can now finally become operational.
PG: Any progress on Energy transition?
AL: COP28 agreed on much-celebrated “transitioning away from fossil fuels” language, but at COP29 there was no decision on how to implement this transition, and no mention of fossil fuels in the outcome documents.
PG: Any progress on Global Stocktake (GST)?
AL: There was no agreement on how last year’s global stocktake/UAE Dialogue should move forward. Developed and developing countries demanded stronger commitments, but Saudi Arabia opposed the inclusion of specific fossil fuel language. As a consequence, the UAE dialogue was postponed until next year.
PG: Thoughts on geopolitics/governance?
AL: Negotiations were overshadowed by the likelihood of the US pulling out of the Paris Agreement/the Convention, criticism of the Azerbaijani COP presidency, Argentina recalling its delegates, and accounts of Saudi Arabia changing a text under negotiation. There were calls, including by former UNSG Ban Ki-moon, for reform of the COP process.
COP29 delivered a mixed bag of incremental progress and challenges. 2024 is likely to be the hottest year on record, and, according to the ICC, extreme climate events have cost over US$2 trillion in the last decade, a context that make COP29 results look paltry.
PG: Was this COP a flop show?
AL: I won’t join the “Flop29”, chorus: by delivering deals on key agenda items, COP29 is still a step forward, and has the merit of reaffirming the role of climate cooperation in a world fraught with geopolitical and economic tension. By avoiding a deadlock, COP29 prevented a COP29-bis led by Azerbaijan, the no-deal outcome of CBD COP16, and Rule 16 to kick in and postpone the NCQG decision to next year. As imperfect as climate multilateralism is, we’re worse off without it. Either way, in the lead-up to COP30, in my home country of Brazil and where a new set of NDCs is due, we’ll need to ramp up not only ambition, but, crucially, implementation.
PG: Many thanks Alessandra for this perspective. Brazil next! The world would be watching – after all the challenges petrostates as hosts tend to throw up. So hopefully the much desired great leap forward then.
Garrett M. Graff writes in Doomsday Scenario: https://www.doomsdayscenario.co/p/two-scenarios-for-the-years-ahead
November 13, 2024
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Blog interview published by Illuminem
November 8, 2024
https://illuminem.com/illuminemvoices/how-purposeful-is-our-management-education
My interview with the exceptional Dr Raghunathan V.
Whether to call him a maverick or an outlier? This versatile former academic fits no stereotype. After several books of varying hues he has for us a delightful autobiographical to relish. It reveals what makes him what he is.
Raghu commenced authorship with hard core finance, steering towards management, behavioural, semi fiction, fiction. Now lays bare a fascinating assortment (and more) from working life.
Since management education is where he spent much of his professional life – having taught some of the smartest minds – I provoke him to share the good, bad and ugly. The responses are trademark crisp and candid.
Am sure you will not resist the temptation of indulging in The Lion, The Admiral and A Cat Called B. Uma Vijaylakshmi.
Raghu laments “The absence of genuine commitment to sustainability and ESG.” Could management education fix it?
Recently Mark Trexler (please see comments) told me why all students at Arizona State University, beginning this fall, must take a class on sustainability – “is a great initiative, although seems radically insufficient and decades too late in coming!’’
Where does one seek the secret sauce? Remember, the ‘philoseralogist’ (one who collects locks for a hobby) in Raghu has the keys to some very ancient and complicated padlocks in his possession.
Blog interview published by Illuminem
October 29. 2024
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My interview with the brilliant climate scientist and communicator Dr. Phoebe Barnard. I had the pleasure of meeting her recently.
Phoebe champions amongst many things hashtag#bioregionalism. She lives in the Skagit valley – the heart of hashtag#Cascadia – in the hashtag#PacificNorthwest (PNW).
With her vision that is “#regenerative, #collaborative, and #nourishing” she hopes to overcome “the disturbing human supremacy, and cultural arrogance, which also devalues and commodifies both our relationships with #Nature and each other”.
Surely we can learn better from our horrendous mistakes of the last two centuries of western individualism, extraction, profiteering, domination, and entitlement, she says.
The road ahead is short and steep, the odds are long, and the vested interests have sharp teeth and claws. All we need is “a #spiritual and #values change, which will enable economic, social-cultural and political change” believes Phoebe.
Dr V. Raghunathan is an academic, author, corporate leader, columnist, and hobbyist.
He has served as a Professor of Finance at IIM Ahmedabad, President of ING Vysya Bank, CEO of GMR Foundation, besides Director of Schulich School of Business, Toronto (India Campus). Additionally, he has been an adjunct professor at SDA Bocconi University in Milan, Italy, and Schulich School of Business in Toronto, Canada.
Raghu’s books include the The Lion, The Admiral and A Cat Called B. Uma Vijaylakshm; To Every Parent, To Every School; Irrationally Rational; Return to Jammu; The Good Indian’s Guide to Queue Jumping; Beyond the Call of Duty; Duryodhana; Locks, Mahabharata and Mathematics; Ganesha on the Dashboard; The Corruption Conundrum; Don’t Sprint the Marathon and the national bestseller Games Indians Play.
Raghu has one of the country’s most varied collections of old and ancient Indian locks.
PG: The book title sounds intriguing?
VR: Well it is! The Lion and the Admiral find a chapter unto themselves in the book. To know about the Cat called B. Uma Vijaylakshmi, you’ll have to read the book!
PG: It sounds like a sequel to your autobiographical ‘Return to Jammu’?
VR: Well, not quite. For one, Return to Jammu is not entirely autobiographical. While shaping the character of the protagonist, Balan, I drew heavily from my own childhood and those of my friends, blending these experiences to create a new character. The latter part of the book, however, is purely fictional.
The Lion, The Admiral…on the other hand is purely based on my professional memoirs.
PG: The public and private sectors tend to be positioned as one versus the other?
VR: It is generally believed that the Indian public sector is more robust in terms of systems, processes, and employee welfare, while the private sector is recognized for its productivity and efficiency. Unfortunately, neither sector has adequately prioritized sustainability or ESG considerations for the benefit of society as a whole. Just yesterday, someone shared with me in Bangalore that a large lake near CV Raman Nagar was encroached upon and developed by DRDO until the early 2000s.
“The absence of genuine commitment to sustainability and ESG – beyond mere lip service and legal compliance, regardless of how that compliance is achieved – afflicts both sectors”
Additionally, the private sector is rife with issues such as deforestation, excessive water usage, river pollution, air pollution, and the indiscriminate application of chemicals and pesticides. Unsustainable mining practices are another pressing concern. Thus, the absence of genuine commitment to sustainability and ESG – beyond mere lip service and legal compliance, regardless of how that compliance is achieved – afflicts both sectors.
PG: How did early disruptions in life nurture your mobility?
VR: In fact, these are the elements I drew upon to shape Balan’s character in Return to Jammu, rather than in The Lion, The Admiral. However, my personality was certainly influenced by the disruptions you mentioned. For instance, my struggles as a young adult, first in the Indian Navy and later in Coal India, stemmed from graduating at just 17. This early graduation was a result of our family’s move from Ambala to Jammu, which led to an unforgivable miscalculation by my father regarding the appropriate grade for me to be admitted into. Being significantly younger than my peers compelled me to work harder and, perhaps, made me more aggressive in asserting myself, and less adept in physical sports.
PG: How purposeful is our management education?
VR: Indian management schools have produced a wide array of business leaders – entrepreneurs, policymakers, CEOs, regulators, public administrators, and more. Many have been extraordinarily successful, while some have, unfortunately, been equally unscrupulous. Personally, I’m not convinced that management schools have made a significant impact on the ethical values of their students who go on to become leaders. This may be due to two key reasons: 1) By the time students enter business school, they are already adults, and much of their moral foundation has been shaped during their formative years, primarily by what they learned at home on the lap of their parents. And 2) The ethical challenges of leadership often arise years after students leave business school, so it’s hard to determine how much the curriculum really influences their values later on.
“I believe ethical values are largely shaped by the broader society”
While business schools should certainly emphasize the importance of socially responsible corporations, sustainability, and environmental, social, and governance (ESG) principles, I believe ethical values are largely shaped by the broader society. I recall that during interviews for admissions at IIMA, I would sometimes ask candidates a hypothetical question like, “Imagine on your way to this interview, you jumped a red light and were stopped by a traffic cop. The officer is not responsive to your urgency and has you waiting on the roadside. What would you do?” Some candidates were quite “candid” and would respond, “Sir, I’d be practical and maybe slip a 100-rupee note to the cop to ensure I make it to my interview on time.”
I would subtly penalize such responses because I believed that if a 21-year-old already lacked idealism and was leaning toward being “practical,” there was little hope for them by the time they turned 30. On the other hand, I rewarded responses that focused on doing the right thing, as I valued integrity over expediency.
Setting ethics aside, I think the success of leaders from our top management schools has less to do with the education or curriculum they receive and more to do with the rigorous selection process they undergo before admission. The intense competition fosters a cutthroat mindset, and I’d prefer to see a greater emphasis on cooperation rather than competition, both in the selection process and within the management curriculum itself.
PG: What are its shortcomings?
VR: Management education in India dates back nearly 70 years. It is not widely known that the country’s first business school, and indeed the first in South-East Asia, was the Indian Institute of Social Welfare and Business Management, established under the University of Calcutta. This was soon followed by four other universities: Andhra, Bombay, Delhi, and Madras. In the late 1950s and early 1960s, the vision of Pt. Jawaharlal Nehru led to the establishment of the IITs and two IIMs, laying the foundation for IIM Calcutta and IIM Ahmedabad, in collaboration with the MIT Sloan School of Management and Harvard Business School, respectively. As a result, IIM Calcutta adopted a lecture-based pedagogy, while IIM Ahmedabad focused on a predominantly case-study-based approach.
In the years that followed, MBA programs emerged at other universities, including the Xavier Labour Relations Institute (XLRI) in Jamshedpur. However, Indian management education largely modelled itself after the American system. Most of the management literature studied in these business schools remained heavily American in focus. While Indian case studies appeared sporadically over the years, the theoretical foundation continued to be predominantly American, with the U.S. remaining the gold standard for research and management education. Contributions to management theory from India, or elsewhere outside the West, have been limited.
I believe that the adoption of the American curriculum has been somewhat misaligned with India’s specific needs. For instance, many control systems and process improvements are meant to improve competitiveness and efficiencies after the basic productivity issues have first been addressed, as the industrialised world did with shop floors and production lines. If our shop floors lack consistency in workflows, if our tools are not ergonomically efficient, or if our safety standards are inadequate, then concepts like 5S, ISO 9000, Six Sigma, GMP, Lean, or Cellular Manufacturing are of little relevance.
“Even when the CEOs of our largest banks and stock exchanges have been found to be seriously compromised, they have been let off with barely a rap on their knuckles”
In my experience, I can’t recall the last time I saw a shop floor supervisor using a stopwatch to optimize production lines, as the American system presupposes. Similarly, the idea that businesses will face bankruptcy for not meeting their debt service obligations, a common theme in American management literature, does not reflect the reality in India. Here, many defaulters continue to lead a comfortable life without consequence. Our high levels of retail corruption seriously undermine regulatory systems, which on the other hand function reasonably well in the U.S. Even when the CEOs of our largest banks and stock exchanges have been found to be seriously compromised, they have been let off with barely a rap on their knuckles. I could go on, but the gap between the theory taught in our management schools and reality is there for all to see!
PG: You’ve been a maverick or more appropriately an outlier? Did management education prepare you as a leader?
VR: This is by far the most challenging question you’ve posed, Praveen. The first part of your question feels reminiscent of asking, “Have you stopped beating your wife?” It forces me to reflect on whether I even consider myself a leader! In my view, management education provides a skill set that allows individuals to integrate various disciplines and knowledge into a cohesive understanding of how to manage and operate organizations. So, yes, management education has certainly equipped me to navigate the complexities of running an enterprise as a CEO.
Regarding leadership, I often mention that while Dr. Manmohan Singh served as Prime Minister, he was not necessarily a natural leader. In contrast, I vividly remember Anna Hazare, the anti-corruption activist from 2012-13, who was once a mere driver with the rank of Havaldar in the Indian Army, while General V.K. Singh, a General, no less, stood by his side while he was making his foray into politics. This illustrates that rank does not equate to leadership. I may have been a CEO, but whether I was a leader is something I cannot determine myself.
As for being a maverick, if that’s how you see it, then so be it! My perspective is that mavericks often come across as eccentric, and I don’t quite fit that description. However, I have certainly worn many hats: I’ve been an academic for a significant time, a CEO for four years at a bank and 15 years at a large foundation, and a director for seven years at a smaller Canadian business school’s India campus, all while being a long-time columnist and author. Additionally, I have a serious hobby of collecting padlocks! Does this make me a maverick? Perhaps, but I prefer to see myself as someone interested in exploring various facets of life and maximizing my potential.
PG: The opportunity to exercise one’s leadership qualities and judgment probably comes only towards the fag end of one’s career?
VR: I’d like to clarify that my reflections on my experiences in the Navy, as shared in the book, are not based on my current perspective, but rather on how I saw things as a 20-year-old in 1975. As a cadet officer back then, I felt as though we couldn’t even blink without being told to do so! However, the truth – something I didn’t fully appreciate at the time – is that leadership is essential at every level, even for those in lower ranks, like an NCO commanding soldiers or seamen.
For instance, a Havaldar leading a section of Naiks, Lance Naiks, or soldiers, or a Master Chief Petty Officer heading a team of Able Seamen, Leading Seamen, and Seamen, must always prioritize the safety and welfare of their “men.” This responsibility demands leadership skills at every level of command. My earlier comment was more of a cheeky remark, looking for something to blame on the Navy, rather than an accurate reflection of the leadership that was actually required.
PG: Speak up – is there enough evidence in Corporate India? Don’t we need more?
VR: In Corporate India, whether one speaks up often depends more on individual personality than corporate culture. While “sucking up and kicking down” might be a global corporate phenomenon, that’s not the angle I’m addressing here. If someone is forthright, clear-headed, and respectful, most bosses will listen. Few will penalize you for expressing your views politely. However, there may be times when it’s wiser to be diplomatic and share your dissenting opinions in private rather than airing them in a public setting, such as during a meeting.
“Speaking up becomes significantly easier when there is mutual fairness, trust and transparency between both bosses and subordinates”
During my 20 years in the corporate world, I consistently expressed my thoughts openly. Even though I departed from the GMR Group five years ago, after working for nearly two decades, the Chairman, Mr. G.M. Rao still mentions that he misses my presence because I was among the few who challenged his views, prompting him to think more critically.
It’s, therefore, crucial for enlightened leaders to foster an environment of open dialogue. Speaking up becomes significantly easier when there is mutual fairness, trust and transparency between both bosses and subordinates.
PG: ‘Games Indians Play’ and ‘Corruption Conundrum & Other Paradoxes’ – reflect ethical lapses in our ‘chalta hai’ mode?
VR: The two books are quite different, despite some marginal overlap. Our “Chalta Hai” (good enough, or will do) attitude parallels our “Jugaad” mentality. Both have their advantages; for instance, “Chalta Hai” allows us to handle challenges without becoming overly stressed, while “Jugaad” enables us to find creative solutions to immediate or one-off problems. However, on the flip side, excessive reliance on “Chalta Hai” can lead to a lackadaisical approach, causing us to accept lower standards across the board, and preventing us from reaching excellence. This mindset diminishes our awareness of quality and service levels, discourages serious reflection on important life issues, and limits our exploration of better alternatives.
Both attitudes reflect our tendency toward short-term thinking rather than a long-term vision.
Similarly, the “Jugaad” approach often hinders our ability to identify systemic solutions for a broader group of issues, as we tend to focus on solving one-off problems. This narrow focus restricts our creative and imaginative potential, ultimately preventing us from cultivating a more robust R&D mindset.
Both attitudes reflect our tendency toward short-term thinking rather than a long-term vision.
PG: I am grateful for all the wonderful insights from your latest book. And many thanks for generously sharing the nuggets from your amazing experiences.
Blog interview published by Illuminem
October 23, 2024
In this interview Analí Bustos, an upcoming environmental scientist, reminds me: “We do not realise that we are Nature and that our lives depend 100% on it. If our planet is healthy, we are healthy and prosperous as well”.
Over half the world’s total GDP – is moderately or highly dependent on biodiversity and #ecosystemservices.
“The #IPBES Global Assessment estimated that one million animal and plant species are threatened with extinction”, says Dr. Andy Purvis (Natural History Museum). That is a quarter of animal and plant species. Likewise, 14 out of 18 key ecosystem services are in decline.
“These ecosystem services are essential and have no easy substitutes. Despite this, almost US$7 trillion (£5.4 trillion) per year is spent by governments and the private sector on subsidies and economic activities that have a negative impact on nature – including intensive agriculture and fossil-fuel subsidies. This compares to only US$200 billion that is spent on #naturebasedsolutions (just a third of what is estimated to be needed)”.
How finance can be part of the solution to the world’s biodiversity crisis – Emma O’Donnell, Jimena Alvarez and Nicola Ranger from University of Oxford address this riddle (The Coversation).
While the #biodiversitycrisis has been overshadowed by #climatebreakdown, is the tide turning?
“There are high expectations because this #COP16 will define the mechanisms to finance and monitor biodiversity action plans, both globally and nationally”, says Anali who is at the event now in Colombia. Hoping that she returns with same sense of optimism.
The Diversity Blog 