An interview with Darshita Gillies: COP27 – Delivering returns on climate investment through education and stewardship

Darshita Gillies is the Founder and CEO of Maanch, a leading B-corp and impact management platform. Maanch is dedicated to providing SaaS & advisory solutions around ESG & sustainability data to investors, asset managers, corporates and donor-advised funds.

Darshita recently attended COP27, which took place in the Egyptian coastal city of Sharm El-Sheik. Beaumont Bailey’s Director – Investment, Amanda Floyd, spoke to Darshita about her experience at COP27, the highlights and outcomes, what it all means for investors and the crucial role of stewardship and education if we are to succeed in collectively tackling climate change.

What was the mood of the event and what were the key outcomes?

If I had to summarise COP27 in two words, it would be intense and insightful. Intense because it was such a large event comprised of sprawling designated zones for non-profits, government, innovation and numerous fringe events, plus there were so many conversations to be had. Insightful, because it gave real perspective on the scale of challenges ahead. It was great to see increasing representation from the private and investment sector. 40,000 people attended and a lot of them were from the private sector, which is a good sign.

There was some tension but an overwhelming feeling of solidarity to resolve the issues at hand. The key takeaways, from my perspective, were the importance of technology in tackling climate change issues and the critical role of stewardship and education. There were also some notable regulatory outcomes for investors and government alike. 

One question that really stood out was, ‘how do we finance the transition to support developing countries?’ There isn’t an overnight, Rolls Royce solution, to suddenly fix the challenge we have, but for any business in the data and tech space, there is a massive opportunity to work with the industry and help find solutions. Technology does hold the key to solving a lot of this and it’s not just me saying this, we heard it from government, business leaders and non-profits.

What were the key outcomes for investors?

There were three key discussion points from the summit that directly impact investors. The first piece of advice that I heard on a number of occasions was that investors need to work to de-risk or de-carbonise their existing portfolios, as well as think about investment strategies in the future. The big question is, how do you invest in green growth?

The second important outcome was the discussion about how investors track change. What are the KPIs to measure and evaluate what is working or not and what role will technology play in this? We must aggregate the data in order to understand which are the sunrise sectors for long-term green growth.

The third key takeaway was the understanding that for futuristic investment, we need strong governance for investors. We need to answer questions around how do investors make decisions, how do they see insights from data and how do they come together to make decisions? 

What regulatory outcomes do investors need to be aware of?

There are some positive and important regulatory changes that investors need to be aware of. The Corporate Sustainability Reporting Directive (CSRD), which aims to strengthen and extend the scope of the existing EU reporting requirements, now applies to over 50,000 companies worldwide. CSRD values sustainability metrics alongside environmental performance, paying particular attention to the ‘S’ in ‘ESG’ (employee health, human rights, bribery, anti-corruption, diversity) and reporting for all businesses involved will begin in June 2023. This directive is important because the data collected will provide a benchmark for future sustainability targets.

In addition to CSRD, the US has announced that all suppliers will be adopting CDP environmental impact framework reporting, which will enable the evaluation of carbon generated by the supply chain. This will include the reporting of scope 3 emissions, which includes all indirect emissions that occur in the value chain.

To what extent will stewardship and education play a role in future success?

Stewardship is one of the best routes to unlocking climate action and de-carbonisation through the listed supply chain – strong stewardship is crucial to success. Maanch’s primary client base is asset managers who engage with listed portfolio companies on ESG issues and we are already seeing a massive rise in stewardship. More than 200 asset managers have signed up for the stewardship code, which requires institutional investors to be transparent about their investment processes, engage with investee companies and vote at shareholder meetings. Voting will be crucial in driving change and asset managers can influence company decisions by voting on environmental decisions. At Maanch, we want to join the fragmented voting ecosystem. This will give further transparency around how asset managers are driving their decision-making and how these companies are responding. Through working with listed companies, green practices have the potential to permeate mid-cap and high-growth companies as they become commonplace and trickle down.

Execution is going to be key to future success in all of this. The reality is that businesses need to build capacity to drive the transition. If there is one action that can solve a lot of the challenges to deliver the most return on impact and investment, it’s climate education.

If you would like to get in touch and find out how Beaumont Bailey can support your ESG resourcing strategy, please contact us at info@beaumontbailey.com or via our web form here. If you would like to find out more about how Maanch can support your business in its sustainability journey, reach out to Darshita for a free strategy call here: Set a meeting.