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Sustainable Investing: A New Growth Engine for Asset Management Firms

 

Kiran Kumar Komma

Domain Consultant, Capital Markets Industry Advisory Group, BFSI, TCS

Karthik Dhinakara

Head - Capital Markets Industry Advisory Group, BFSI, TCS

Shifting the asset management landscape

With the global focus on climate change and sustainability, the asset management industry is seeing a growing band of socially conscious investors drive a shift towards options that incorporate environmental, social, and governance (ESG) factors. This shift to sustainable investing offers asset management firms an opportunity to push asset under management (AUM) growth. Firms will need to build investment portfolios that balance the traditional goals of financial returns and long-term ESG impact.

To achieve this, firms will need to:

  • Navigate a rocky path to sustainable investing

  • Formulate a holistic strategy encompassing key business areas

  • Enhance capabilities in investment research, portfolio management, and risk management including climate scenario analysis

  • Leverage ecosystem capabilities for ESG data, engagement platforms, climate scenario analysis tools, and technology solutions

With increasing push from investors and regulators, a switch to socially responsible investing is inevitable, even if challenging.

 

About the author

Kiran Kumar Komma
Kiran Kumar Komma is a domain consultant with the Capital Markets Industry Advisory Group in TCS’ Banking, Financial Services, and Insurance (BFSI) business unit.
Karthik Dhinakara
Karthik Dhinakara Ram leads the Capital Markets Industry Advisory Group in TCS’ Banking, Financial Services, and Insurance (BFSI) business unit.