IVCA's Green Future Series Highlights How Leveraging Climate Analytics Can Fortify Investments

Industry body for alternative assets, the Indian Venture and Alternate Capital Association (IVCA), hosted the third edition of its IVCA Green Future Series, which focused on ‘Managing Data & Climate Analytics’. The virtual event called attention to the growing potential for using data analytics in investment decision-making, even beyond the realm of climate financing. 

Data science and artificial intelligence have figured prominently in recent conversations on objective decision-making. Accordingly, the increasing need for evidence-based actionable insights into climate resilience has prompted the field of climate analytics to gain rapid prominence. 

McKinsey stated that 60 per cent of chief investment officers evaluate the ESG considerations and performance of portfolio companies, and 80 per cent keep track of the ESG impact on companies’ cash flows. Most are also inclined to provide greater financial support for companies that can demonstrate an explicit link between their ESG initiatives and their financial performance.

As an expanding number of investors express eagerness for stronger ESG standards, IVCA aims to amplify the advantages of leveraging climate analytics for a more enlightened investment outlook. The applications of climate analytics, however, need not be limited to the sustainable investing spectrum. Bearing in mind how climate change’s impact has pervaded all corners of life, climate analytics has the potential to shape the future of the investing ecosystem in its entirety.

Commenting on the significance of climate analytics, Samir Shah, managing partner of Peak Sustainability Ventures, the keynote speaker at the session, said, “What you measure determines what is important to you. This is very important to understand that over 90 per cent measures by regulators, in annual reports and governing policies were only on financial reporting. Now, regulators like SEBI have mandated for the top companies to have reporting on impacts on environments and social impact, etc. Globally, standards are changing. What that means is that the data regarding climate is becoming important, and good companies move towards this before it becomes mandatory."

The session also featured a panel discussion with industry experts like Aakash Shah, partner of Peak Sustainability Ventures, Aakansha Priyadarshini, co-founder and CEO of Aurassure; Anupam Ravi, SVP, Client and Data Delivery at GIST Impact; and Raj Pai, managing partner of GEF Capital.

The panel discussion explored how climate analytics can be leveraged to fortify investment procedures. Robust climate data could help investors anticipate and curtail risks resulting from climate challenges such as increasing expenditures, fluctuations in demand, and supply chain collapses. 

With the help of climate analytics, investors can also assess the ESG performance of their portfolio companies and determine their capacity to adapt to the progressive transition to a low-carbon economy. Additionally, the use of climate analytics can help policymakers establish updated climate standards and policies to accelerate the shift to a more sustainable tomorrow.

Through the Green Future Series, IVCA aims to bridge the gap between the aspiration for a green future and the practices and strategies that would turn this vision into reality. By enabling the Indian investing and entrepreneurial ecosystem to achieve climate resilience, IVCA aims to accelerate India’s transition into a greener, more sustainable economy and position India as a leader in climate change adaptation and mitigation measures.