The Council of EU Chambers of Commerce in India had organized its 29th Annual General Meeting on Wednesday, September 29, 2021 on “Lessons from EU for Indian Corporate on the ESG Agenda” 

The Council of EU Chambers of Commerce in India held its 29th Annual General Meeting on Wednesday, September 29, 2021. The theme was “Lessons from EU for Indian Corporate on the ESG Agenda”. The AGM was attended by EU and Indian Embassies officials, MDs & CEOs of European Companies and Indian member companies of the Chamber.

The speakers were Ms. Renita Bhaskar, Minister Counsellor, Head of Trade and Economic Section, Delegation of the European Union to India, Mr. Raghav Raj Kanoria, Managing Director, India Power Corporation Ltd., Mr. Sudip Mall, Managing Director, Huhtamaki India Pvt. Ltd., Mr. Dibirath Sen, Managing Director & Head, Banking North India, HSBC Ltd. and Prof. Subhasis Chaudhuri, Director, Indian Institute of Technology, Bombay. Mr. Ashok Barat, Past President of, EU Chambers, moderated the session.

Mr. Manish Bhatnagar, President, EU Chambers welcomed all the speakers. He thanked the Guest of Honour Ms. Renita Bhaskar for gracing the AGM. He also thanked all the member companies, Governing Board Members, Past Presidents, Diplomats of European member States, business representatives and bureaucrats for attending the Annual General Meeting.

He initiated his remarks by highlighting how the Chamber plays an important role in enhancing the bilateral relations between India and EU. He also talked about the importance of the theme on Lessons from EU for Indian Corporate on the ESG Agenda’ which is extremely relevant and we are in dire need of looking into essential investing and sustainability.  Even though it might not fetch immediate returns currently but it will benefit all of us in the long run and generations to come. In India still ESG is at a very nascent stage, there is much more room for growth.

We all are recovering from the COVID pandemic, and in my opinion it has emphasized that both public and private sector need to factor their strategies and impact of their externalities.

On behalf of Governing Board and myself, I must place on record that the Chamber received support from EU Ambassador to India, his Excellency, Mr. Ugo Astuto, Ambassador to India and his office, other Embassies and Consul General’s office for all the support extended to the Chamber.  I would also like to thank and express my sincere appreciation to all Board members and other member companies for extending their support and cooperation during my Presidentship. Finally, I would like to thank the good work done by our Secretariat. I have no doubt in coming years Chamber will scale even greater heights, thus further cementing better trade relations between the EU member nations.

Dr. Renu Shome, Director, EU Chambers announced the election results. She congratulated Mr. Manish Bhatnagar and Mr. Peeyush Kaushik for being re-elected as the President and Vice-President of the Chamber respectively. She presented the activities of the Chamber for FY 2020-2021.

Dr. Renu Shome and Mr. Manish Bhatnagar released the Activity Report of the Chamber for FY 2020-2021 that was later circulated to all the attendees and member companies.

The Guest of Honour, Ms. Renita Bhaskar, Minister Counsellor, Head of Trade and Economic Section, Delegation of the European Union to India addressing the attendees spoke about EU-India trade and investment relations. She mentioned that the bilateral trade is around 100 billion Euros, and EU FDI flows into India represents around 11 percent of Indian FDI. She also mentioned that it is a joint recognition for growth from both the sides and they are consequential which are stopping trade relations to reach its full potential. Issues are ranging from increase in custom duty to things related to restrictions in public procurement, regulatory matters related to non-tariff.

Regarding trade from India to EU, better things can be facilitated by India. Therefore taking into account this context, in most recent meetings, Indian political leadership and EU political leadership decision was taken collectively to do something together and make a marked change. The leaders agreed on some set of outcomes like restarting the trade negotiations for balanced and ambitious Free Trade Agreement, to start negotiations for standalone investment protection agreements and also to start trade negotiations for geographical indications.

Apart from this she stressed on the need to find solutions on longstanding market access barriers, because trade negotiations take a long time. She also spoke about the impact that the pandemic had on businesses and the supply chain, there is more need to do technical work and address that to working groups to talk about regulatory corporations.

Mr. Peeyush Kaushik, Vice-President, EU Chambers thanked Ms. Renita Bhaskar for enlightening the attendees on the efforts made by the Delegation of European Union to India to strengthen the bi-lateral trade relations between India and EU. He also extended his sincere thanks to all the embassies officials and member companies and the work done by our Secretariat led by Dr. Renu Shome.

Mr. Ashok Barat, Past President, EU Chamber moderated the Panel Discussion. He initiated the panel discussion by complimenting the Chamber for choosing a topical subject not only in a contemporary sense but also for the long-term existence of this planet and our well-being. ESG has got three elements – Environment, Social and Governance. He further highlighted that we will only focus on two elements Environment and Social as enough has been talked on Governance and we have fairly active firms, advisory committees and timely discussions.

He started the panel discussion by highlighting a few examples on how Europe has been front runner in many of the things. First the whole process of transfer pricing for companies in trade and commerce, legislation originated in Europe. Second interesting thing was introduction of accounting standards, over the years different countries had different accounting standards, for consolidating the whole process globally for accountants the IFRS – international accounting standards has been come off from Europe.  In recent time whole concept of data privacy originated from Europe, they have the most advanced legislation which is been used for the bell weather which is used for determining the relevance for data privacy, policies guidelines and other practices. Last but not the least the minimum corporate tax for global companies which are operating and allowed for tax planning jurisdiction also has been originated in the Europe.

Mr. Barat opened up the first question to Mr. Sudip Mall, “there is no disagreement that being a responsible corporate citizen is the only way to create a sustainable business model, acceptable to consumers, lenders, employers and all of the stakeholders. In fact employees when they come for senior management positions interview they ask about your environment consciousness. But developing countries have constantly draping with this problem, if we adopt the western size of consciousness for environment and other practices, will it destroy my competitiveness? Or will it make my services and products so unaffordable, that a large mass of people who actually form a large part of our consumers will get deprived. In fact in the last few months, poor experience that Sri-Lanka experienced because of moving to organic agriculture cruse has only increased the fear and problems. Mr. Sudip you might be seeing this debates, so what are the things you do to resolve such debates?

Mr. Sudip Mall started with the purpose; he stated that our purpose clearly revolves around ESG agenda; which says that we protect people, planet and food. If you see our value, the first value is care and it clearly says that we care for our employees, customers and for our communities. But once it is in purpose and values, we have learned from our parent company that we clearly articulate in numbers for ESG agenda.  For example in our 2030 ambition we clearly say that 100% of packaging would be either recyclable or either reusable or compostable. We will be 100% carbon neutral. He concluded by saying that it should be embedded in the culture of the company from senior most positions. He also talked about Net Promoter Score (NPS) for our employees and customers, further stating that companies which promote NPS are doing 100% better than the industry.

Moving forward to Mr. Dibirath, Mr. Barat asked him 2 questions. First is “what pushes companies to adopt an ESG strategy despite this risk? Is it the compulsions of the regulations or own conviction or pressure from lenders to investors?”

Mr. Dibirath answered by saying that, there are a few factors in the response of a particular enterprise to the ESG initiative. There is a tectonic shift, and why is it happening, some of the factors are capital. Capital has the power to bring change.  From that perspective, they have globally said that they will move away from any non ESG. Today’s customers are for more demanding in terms of GEN-X, they ask questions, like what is the process you follow in getting the product to market. Coming to the Indian context, the change which is happening is too slow, but there is never the less change happening, and that change is visible at the top gear of the market.  He further stated that a lot will be changed in terms of zero net emissions, as at a global level many companies have voiced their net zero plans within a certain time period.

When you as a lender look at an institution what are the things you look for to take up the makeshift, this is the selective effect or cosmetic effect?

Most important thing in terms of HSBC was that we would want to be first a market leader, because we believe that this will be the differentiator in the long run compared to our peers. For being a global financial institution there is absolutely no question that we want to be a leader, for that we have announced that we would invest around a trillion dollars in the space. We also have our own net zero journeys which have been spelt out to the public. He also further added that not only we provide green loans but also other small local banks.

The next question was put forward to Mr. Raghav, “Technical institutions will have to play a very big role, so besides the normal research and the academic part of their work, very large part of it will have to be application, so that they will use the technology and give to Indians to be able to adapt?

Mr. Raghav gave his perspective with respect to power sector; he stated that around 50% of the carbon emissions are emitted from the power sector around 2.5 billion ton annual emissions. As more industries are turning towards being green and energy compliant, the power sector has taken a lead and pushed by the government initiatives. Even close to 2040, the energy emissions will be close to 35% dependent on coal, because of the way it is structured from the current 70% which is quite major shift. Further he mentioned that technical and educational institution’s play a very big role in understanding what is adopted globally, basically catering to Indian customers can be implemented in a very cost effective manner and can be implemented faster.

Mr. Barat asked Prof. Subhasis Chaudhuri “does he think that Indian technology institution and educational institution provide with the support or kind of things he is looking and does have a wish list?”

To which he answer that, if we look at particular technology today, it may be not affordable today, but maybe after some years if you persist, it becomes very affordable. For Example – solar cell. We try to train our students in terms of thinking attitude, no solution is unconstrained.

Further Mr. Barat had a discussion with panelists on gender sensitivity, social infrastructure which is rooted in social customs, traditions. On this Mr. Sudip Mall commented saying that this generation is very ESG aware. But to make this Social factor more prominent, we have to work on the three things, workplace, marketplace and the community. Further he also added that this generation feels pride if they know that they are cared and valued by their employers. If it is a fair place, the returns are very much more.

Mr. Barat commenting on this asked Mr. Sudip and Mr. Raghav, if their voice would be strong and their conviction confident for workers working in remote areas, while the social factor may be true for corporate offices, would you be confident for workers working in very remote areas, are they so gender sensitive, are the women workforce safe?

On this Mr. Sudip spoke about their plants which are in extreme interiors of north east, he shared that he thinks they have good values which the company is encouraging and treating fairly, and also the company cares for them. In companies CSR budget, we empower the local area manager, to do work around the plant. Mr. Raghav also agreed on this and mentioned that us being in a power sector, if we don’t have the social factor in mind we will be irrelevant in the next few years.

In concluding remarks Mr. Barat said that there is scope for the Chamber and some task force should be put in association with EU to help in policy making on environment and social part.

The Panel discussion ended with an interesting Q&A session.

The AGM was concluded by Mr. Peeyush Kaushik and formally proposed a vote of thanks. He thanked all the attendees, governing Board Members, member companies and sponsors- Platinum Sponsors– Punjab Chemicals & Crops Protection Ltd. and Shri Bajrang Alliance Ltd. Gold Sponsors– BNP Paribas, India, ICICI Bank Ltd. LPS Bossard Pvt. Ltd. All Cargo Logistics Ltd Silver Sponsors– SKF Seahorse Ship Agencies Pvt. Ltd., Philips India Ltd., Indus Finance Ltd., NRB Bearings Limited, HSBC India, India Power Corporation Limited, Rama Industries Ltd., August Consulting (India) Private Limited, Technocraft Industries (India) Ltd. and Export Credit Guarantee Corporation of India