Week 38: It’s time for ESG 2.0 – Interview with Ravi Chidambaram

Dear all,?

The past week has been a week of burning bridges. I don’t know if you have ever witnessed a bridge collapse, or if you have ever seen a bridge being burned, destroyed and ravaged. The scenery is overwhelming. It cuts through you.

Bridges have a deep symbolic meaning in our lives. They connect people, cultures, dreams, history, time, feelings, friends as well as foes. We are collectively witnessing a time where bridges are getting pretty much, burned. Symbolically as well as literally.

Maybe we have come to that point where we just don’t know where to go anymore, and having bridges does not make so much sense. But we need them like never before. Some new bridges will need to be built and they will need to lead to other places, other times, other destinations. To other ‘us’. We need that, and we need it so badly given where we are.

This past week I have met many people with sparks in their eyes, bridge builders, and it gives hope and strength.??

Interview with Ravi Chidambaram

This week we will dive into some of the solutions available to improve the delivery on ESG commitments made by so many. We know that the delivery part has been pretty week and that ESG in a sense, when done for real, can provide much, much more.

I had the pleasure of interviewing Mr. Ravi Chidambaram. He is the Founder and President of TC Capital. He is also the Executive Director and Co-founder of RIMM, a SAAS-driven sustainability management platform, that helps companies and fund managers improve their sustainability reporting and performance.?

Ravi has been active in sustainability for many years, as an Adjunct Professor in Sustainability at Yale-NUS College.

But first and foremost, Mr Chidambaram is a bridge builder!?

SB: The ESG industry is in many ways on the crossroads in terms of what value it really creates? What is your view on what needs to be done the next 3-5 years??

RC: It's clear that ESG 1.0 is a failure on multiple fronts. One is the way it has been abused by large companies and asset managers through image and greenwashing for monetary gains. Second is the fact that if ESG was supposed to be a corporate and shareholder-led initiative to make the world a better place, it has failed miserably, no matter what metric you choose to look at.?

It’s definitely time for ESG 2.0. One that uses far more sober, comprehensive and transparent analytics in determining what is “good” and what is “bad”. One that makes allowances for seemingly bad companies to become good over time or indeed the reverse. One where regulators come down hard on those still stuck in ESG 1.0. One that holds companies accountable to impact measurement, going beyond high-level disclosures and targets, instead quantifying impact in a societal and financial sense. One that codifies how ESG metrics can be reported and interpreted.?

SB: At RIMM, you’ve developed disruptive solutions to help companies on a number of ESG issues and strategies. What is unique about your solution??

RC: First of all, we at RIMM approach ESG from the perspective that it is simply another critical business function like CRM, finance or operations. We believe it is inevitable that ESG over the next few years will be integrated into firms large and small just like any other key business practice would be and impact a company’s bottom line in the same way. Hence, we do not make grand pronouncements on how we suddenly turn you into a “Sustainability leader” that the entire world will admire overnight. Good ESG is a slow and incremental process, like any other business practice adoption.?

That’s why our SaaS tools – based on advanced tech, data science and research –?focus on daily productivity and applications. We have many “lego style” building blocks in assessments, scoring, analytics, carbon, impact and reporting that firms can use interchangeably to make their sustainability management easier, faster, better and cheaper.?

We also believe strongly in the “stack” approach where companies can tackle ESG challenges using multiple tools.?

Why the “stack” approach? Here’s an example: a bank that wants to approve “ESG friendly” trade finance for an SME may insist that they assess their sustainability data using multiple standards, verify that data via an audit, and issue a full report.?Or an OEM may insist on a carbon audit, an ISO certification and an impact report before certifying their supply chain as “sustainable”. All these use cases end up using multiple ESG building blocks but provide one seamless solution for a client. We believe this will be the winning approach to supporting sustainability management at companies. It will not be enough just to do carbon measurement or a report. These functionalities all need to be integrated and indeed even customised to really add value to a client.?

SB: What has the response been so far from clients and prospects???

RC: So far the response has been encouraging. We have signed up a number of pathbreaking co-development projects with fund managers, banks, insurance companies and manufacturing companies to develop customised, industry specific “stack” solutions. This paves the way for us to “productise” these solutions and go deep into industry verticals to gain market leadership.?

All the insights we gain from these co-developments helps us improve our core My CSO platform. My CSO has all the functionalities in one SaaS tool and will be sold on a mass market, subscription basis from October 2022. It will become our signature product and is meant for companies large and small all over the world.?

SB: What are the main hurdles??

RC: As always in any new and emerging field like ESG, the hurdles are mainly the ignorance, indifference and inertia of clients, especially in emerging markets like parts of Asia. You can’t imagine how many uninspiring conversations we may have in a day!?

We consider our platform to be more “grown up” and conceived with ESG 2.0 in mind but sadly many people we deal with are still adolescents when it comes to their thinking about sustainability management.

So in some ways we feel we are a bit on an island as a service and product but we are encouraged on the growing traffic to our island.?We are confident the market is moving our way, especially in the wake of the discrediting of ESG 1.0, so we will continue to maintain the strategy we have adopted.?

But equally, like any start up, we also need to execute better, faster and in scale, to seize the “Zeitgeist”. And always be mindful of the competition.?

SB: Currently your focus has been in Asia. When will you expand to Europe and US??

Europe is very much on the cards. We plan to open an office there by October 2022.?We already have a number of investors and clients from Europe. The US is likely for 2023. We are speaking to a few strategic partners there and hope to work out distribution and licensing arrangements there.

Have a great building bridges week!?

Kind regards,

Sasja

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