Hello and welcome to Episode two of Lomo, the video interview series organized by the alumni Ice not, and our is leading to improve yours the student's knowledge in a variety of domains through the knowledge and experiences of our own Alex. For episode two, we have with us, Mr Nations Malhotra, founder and ceo of the medicine, a platform that enables social change. And so there's an alertness of S IBM unit from the batch of 2000 where he did his NBA in sales and marketing.
So it's also a graduate of the China Europe International business, where it is in here, good in finance and the University of Michigan, where he has done a master's in public administration. So has non extradition of variety of companies that primarily needed. It'll be fine itself or what, and it's like you don't have yeah, thanks God for some other time, as I've been saying for, it's a pleasure and an honor to be here, but it has a case just two minor corrections. I went to China. I did.
My degree in general is computerized, but I do you know this but my isn't it, Mr Michigan before school my sister construction so fantastic distance. Before I start, I just shared. I want to just document your little patriot. What you're doing here is going to be very relevant, not only from students of s IBM or you know, universities. It's going to be pretty probably because our parents are going to be going out a lot of problems. Sustainable finance.
And I want to also thank you for putting up very powerful questions are very interesting and very impressed just to get you on the middle. The middle one is a partly the platform. Negotiation changes, but within the government, and you know it's basically predominantly into media and learning. It's going development work in tech, and it's walk some confidence between the so it's very well integrated.
It's used, inspired by assembling, filling development goals and also get a few more things like renting art culture music. Now there's a lot of things have been cooperative. The mission of the start of the vision to start with Monday, one of the largest, which is the largest platform time. Yeah, something training and education, other things, but you don't really like because we also everybody you just can't speak learning models, you know, at least, and now it's free. It's a great sport.
Venue. Article begins to learn What if you got to build it into steam? Really? Not to learn from nomics Finance statistics Evacuation. Another complicated away. Thank you. Witness. Just go to www the Middle Brook Park for the W W W. Thank you so so their audience as you hard. So I said no. Have you got the mineral dot? Watch you and also, as you mentioned it, Tech, and particularly for leadership, is something that is gaining a lot of prominence today.
And there's a huge, huge thing going forward. So the steps you are taking with them, the railroad is definitely Mm hmm. Or inspiring for us as well as, well, it's something really inspired. So, uh, unless combination for this injury next week efficient already, uh, donation, we get right into the topic, which is sustainable finance. Uh, it's something that is all the rage in recent times. So could you please tell us about the concept of sustainable finance?
How is it different from conventional finance? Because that's a very good question. That's a great question to start with when you're talking about Sustainable finance incorporates E S G within its themes. So when you're taking these themes, it's very similar to I would say, conventional finance. When we're talking about sustainable finance and I'm not talking go deep, I would keep it into two parts.
One would be, of course, we're talking about different kinds of sustainable bonds, sustainable debt we're talking about. There could also be loans included in that and also got a bit of equity. The other could be impact bonds, which very few people maybe don't include it. But I, for my part, the middle has included titles as a part of sustainable finance. Looking at debt or loans or equity. It's exactly the same as the convention part.
However, the difference is what, like I said about the E S G. So you are trying to incorporate, uh, you could say an intersection. There could be other environmental. So you have climate finance, which comes out you have when you're looking at the society or social. When you're looking at the social aspect on E. S. G. You are looking at equitable education. You are looking at, you know, very different themes. For example, climate could also be transport and then governance.
You know, you're looking at various aspects of governance when you're looking at these three aspects and the finance, which is dedicated or targeted. You know, there are a lot of when we go deep, we'll discuss it. Uh, what are the, You know, different aspects. But when we are talking about sustainable finance, we are actually talking about these aspects. They have to be doing something which is bettering the environment, but better in the social groups of the people.
Or it could be the governance. There could be things which ones should be covering all of them. But more or less, it should be related within these themes. Responsible investors, which is what you are looking You are taking into good those social aspect along with the financial aspect, right? Right now, dog beer. So foreign M b A student who would want to pursue sustainable finance as a career? What would your recommendations be?
Okay, so this is something which I actually want you to cover in there. And we can do that. I could talk about it. And what we can discuss it now. I think we can take it at the last message. We can take it towards the end. We can take that towards the end. So then, uh, you shed some light upon some of the various aspects that come under the umbrella of sustainable finance. Uh, could you tell us a bit more about that in detail? So talk about sustainable debt.
So when you're talking about sustainable debt, you have, like, I talked about climate bonds, which could be green and blue bonds. Whenever I'm talking about green, it's also includes blue, but blue could also be separate. But talking about green it's basically related with the environment. It could be, you know, greenhouse emissions could be one better transportation focusing on renewable energy. When you're talking about green, it's either into climate mitigation or climate adoption.
These are the two basic aspects which Green does look at or when we look at you. Taxi money, which is like very in depth. It has taken biodiversity, has taken other aspects. For example, we could talk about renewable energy, sustainable energy, which how much you know, biodiversity. So these are the things now which are part of green bonds. It could also be as a separate part of blue bones because the first blue bond was done for marine ecosystem, and there are different aspects of it.
One part when you're talking about green bonds and, like you talked about social bonds now the other social bonds, which was the largest increase in 2020. If you see I think it was a about a tenfold 1000%. So now when we're talking about social bonds, it goes to the aspects of helping humanity, which technically is not only related to environment.
For example, if I am bettering environment, I'm also helping humanity because there's been research shown and that if you keep the climate the way it is going, it's going to end up people in more in poverty. So it's all interrelated. Or whenever I'm talking about social bonds, it's very specific into certain aspects to check out the boat building old age homes.
Now that is something which will go in social impact building schools, which are very quotable, our quality health care just to give you a few examples. Now, these are two aspects. The third point is sustainability. Bond sustainability blond includes both these teams and the recent invention, which has happened in sustainability linked bonds. These bonds are gone except sustainable. Ding all the three, which I talked about green bonds, social bonds and sustainability bonds.
They are actually linked by the proceeds. Now the proceeds of when you're raising these bonds are going to be used. That is the predominantly importance of these bonds. That's how you characterize these bonds or sustainability linked bonds looks at the sustainable factors. It could be KPs or in external credit rating, which is we definitely are the holistic linked to the CSR activities or not. So this is one of the major differences and sustainable in bonds.
Think organizations which came out and we will come to the Welcome to that at later it as we go forward. One part No. These are bonds which are very similar. Recently, I actually attended a webinar where we should also know some of the major plays like, you know, I see Emma is one of the major place which comes out with these guidelines.
So they were talking about, you know, what's the difference between oh, the sustainability linked bonds could be different, maybe over a period of time, also attract a lot of money from corporate, so that could be thing which we could also for these bonds and conventional bonds. Now this is where we can come out with the difference. They're predominantly very similar. If you're looking at a bond, the bond is going to have a Cuban. Of course, the bond size.
Now let's look at the bone size if if I'm looking at the global capital markets the bond size about $100 million a little bit more than $100 trillion. And if I compare this now, the green bond market is like really going up. But still, it's less than 2% during one person. I don't know exact figure, which was reported bond market, which would be 2020. The figure was about $1.7 trillion.
So if you look at the global market size, which is about 110 200 but I'm not exactly sure how much is the global bond market size, but it's very close just to break over one person. You can understand the difference between the two or, if you look at they have the same coupon rate. If you're looking at the bonds that one good parties like the green bonds, which are putting a shoe right now they're at a premium. So what? I'm talking about a premium.
What I'm saying is like, Let's say I have a 20 year conventional bond and have a plenty of green bonds. Uh, the coupon, which I'll pay on uh, one of a similar operation, will be less, which means, as you are much more healthier for, you know, you're a better credit rating to play less people, you know. So the years will be less, you know, at the time when you're issuing the bonds.
So that is a great aspect because green bonds you could give out less as an interest payment and people Still, it's highly subs. Uh, subscribe. So this is a huge development, which is happening, and this is like now you have a fair bit of understanding that you're looking at very similar instance. The other part, which will be impact bonds. No impact bonds are characterized as quasi derivative instruments like pay for success. These are social impact bonds, development impact bonds.
Now, this is a very good example of private public partnership. The whole part of when you're looking at sustainable finance you have on Oh, I see. The figure says that a. You need at least know about $6 trillion. You want to go close to 2030. Sustainable weapon goes because of the pandemic. That figure could have gone on because that figure, I think it's from 2018. That figure would have gone up No. One of the reasons why Sister Durbin wants.
And you know the World Bank wants to come in, or the largest European investment bank. Or you can talk to the I. M. F. Why, for example, I FC specializes in what is getting a public private partnership to the to the to help the underserved market. So basically, you have what is doing as market failures you have. Also, government failures were in, you know, the government and the public private sector does not want to address, which is, the less there is part of the people of the society.
This is where you are. Actually raising, which is a recent phenomenon, is in the social bonds because the sustainable bonds predominately started as climate wants. You have nonprofits like climate bonds Initiative C B I, which is one of the biggest nonprofits, which is a very defining force and a champion periodically in this particular sector.
When you're talking about green bonds, if you fail a bit of an idea of what the bond market and it's pretty similar when you come very, at least in the structure. Not as you also have a bit of structure products coming in system building bonds, which I'm going to talk a little bit as we go forward. I talk about end product in detail, so that's very interesting. So a lot of innovation is coming, but that is exactly similar.
Only thing is going to be useful holistic process, which is what and that's defined by principles. So, at least for green, born of social bond and sustainability born there, there are really sustainable in bonds also has principles. These principles and you too, sort of obeying a framework of what they would constitute as these bonds now. Sorry. So I was talking about impact bonds.
No impact bonds are of two types which gives public private partnerships have social impact bonds, and there's an impact bonds. Republic Bank bonds are very similar to social impact bonds. The only difference is in low and medium countries with an income countries, and secondly, these bonds have the pair, which is actually non government entity. So social impact bonds were first came out with social finance in UK, where the government entity was there.
And so the books on the concept When you have a private and a public partnership coming in, you want to address a change, you want to see that change coming. If that change comes in and we call that change as an intervention, you want to change to come and you'll do a set of interventions, maybe one intervention or set of interventions, and you want to see that outcome. And now you're gonna pay if you achieve that outcome. So you could say it's like a cozy or digital option.
You could say a call option where Okay, this, uh, it's one. I'll get a payout. Zero or not other doesn't sort of strictly work that way. You put a lot of countries also call it, call it pretty much way.
But of course, here is if I want to do something, I'm pretty much not take a very a sort of a mile, which I can cover if I won't give an outcome, which is so difficult to reach that I don't get anything activating Social impact bond you The outcome pair is a government, and a great many backbone or compare is a nonprofit. Now we educate girls. It was, you know, implemented in India. These are, but they're not very. It's a very small size. You're looking at the corporate sustainable finance.
When you're talking about, we're talking about these bonds. The third pocket, which I could keep, is impact investing. Now, impact investing is like private equity. You want to go in and you want to You know, it could be like in the earlier part, like a venture cap, or you want to actually be in the growth side and try to give money to a company, which is more like a social entrepreneur. So when we talk about impact investing, take this, you know, in detail.
So these are the three aspects which I will say your sustainable finance. But the climate bonds of social bonds before bonds checked off the board climb green bonds the largest by far. Uh, then you have social born and sustaining sustainable bonds or G bond, some people say, And the fourth is the sustainability linked bonds. That's like a rookie of the year, you know, like you say as a rookie, So that's still a long way to go. But the king is still the green bonds right now.
I think that covers in depth the various aspects that come under sustainable finance. Uh, could you also, you know, throw some light for our audience on recent trends that have been coming up in sustainable finance? And what are the opportunities and challenges that countries could face when we are looking at a sustainable investment going forward? Good. I think this is a fantastic question. I really loved it. That's very thoughtful question. Okay, so there are a couple of things here.
I talked about the trends. So trends I like to talk about the sustainability linked bonds. Now why this is interesting is that it doesn't go by the proceeds. Usually, when you're looking at Bonds, I'm raising those proceeds. I'm getting that money and how that money has to be utilized. That's very important. However, in this case, it is linked to, for example, angle angle has been a leader. It's a Dutch conglomerate.
It's been one of it's actually been, as a matter of fact, in sustainable side, one of the most innovative companies. It's been coming out with new options. So it came out with sustainable, uh, link born and this You have certain guidelines, you know, you map up according to either KPI is, it could be or it could be a credit rating or it could be any other specific man perimeter.
And if you achieve that perimeter, you're giving a different kind of coupon or since our various Yes, sir, And I, uh, my CSR strategy is aligned with something with the E S G. Now I could go to the bond market and raise money at a premium. So why you will say what some people will do first? There is. A lot of people around the world are very millennial Generation Z and even the people around the world.
Now there's a lot of activities activism, and people are very conscious of what you're doing and how you're making money and how you're going to be utilizing that so you could go at a premium. You pay less coupons, so you raise money at a luxury. The cost of funding, at least reduces to of debt, would reduce if you're going and using this particular market size. Secondly, you will have access to a lot of other industries which are not there. A lot of people know.
For example, socially responsible investors itself are so high that they would like to invest in, for example, angle, which came out with almost a $4 billion which is the largest born offering Sustainable link Born. It was three times always suspect just to sort of imagine how much it is. So if you ever CSR strategy, this is one place which you can you could go. It's more like a structured product, which has got a step up people.
It's very so it works it this way for at least the angle, and you can design your own product. If I'm going to be putting up. If I Let's say I say that not for angle or it could be anything, let's say I have and I'm targeting carbon emissions. I would say about 2020 now, 2,025. I'm going to listen. My carbon emissions by 20%. If I do that, I'm going to pay you a coupon off valuable person if I'm not.
If I missed the benchmarks, of course I'm gonna be there has to be some sort of mythology, so I'm going to pay you more in England case, I think it's one of the things I was like 25 trips. They want to be paid more if they don't need some of the hurdles. No, those hurdles is what you can decide. It could be conservation. It could be You're looking something in transportation and you could say that. Okay, I'll be conserving energy in particular the history. Right.
So it could be any of those parameters with your tickets. One part, uh, the EU taxi money, which has come out, is one of the best taxi money is the first time somebody has gone forward. So three for Europe, The green bonds market, which is about $1 trillion I think last year by simply I and I think about $1 trillion for very close to that For green bonds, about 46 or 48% came from Europe. Europe is like the top gun when you're talking about, you know, climate finance.
That's where a lot of innovation or those are. Of course, China is a very big player in America. Also, this and there are other place which are your tax money is something which is very innovative. Just come out. It gives you the, you know, very detailed structure. What could be what could be the six parameters. So they have defined the greens finance space as much larger, like a talked about. There are six parameters. It could be the vote. When you're talking about these, you tack Simoni.
What it does is it gives things are getting mainstream. You want to show the world how serious it is because also, you know, taking sustainable finance as one of its core four strategies. The sustainable growth. So they have this action plan where they have said that 20% of its budget, at least, is directly a little bit climate. It's a very significant factor now who all could be. Recently, one of the universities in America raised money through green bonds, so they had to structures.
I think years of two different one was a conventional born and one was a green bond and where they had a premium green premium is they sort of played less and raising the money. It would be used for those green proceeds. There is a framework framework is freely available if you go online, which is like the Green Bond principles, you have social bond principles of sustainable burn, sustainable Lynn Bond principles. You can read it and which define what could be the parameters.
China came out with one of the green bond principles, so that was good because it's not standardizing the whole world is waiting for between Europe and China are going to come out with the convergence of that would be a very defining framework of the trends, like like one trend would be, I would say board should focus on social bonds. I want to say that there would be any problem of the whole world is actually getting up towards this particular space.
There would be a trust or a pushback from certain investors who might not want to be liking it. But I feel if you look at how the the assets and the management is rising, you look at the PR uh, chart. I mean and it's really going up. You know, there are a lot of issues. For example, Japan came out And they made the pension funds to actually invested in ESG. So if you are a holistic alignment towards it, you should be investing in Apple. Singapore has made a green plan for 2030.
There's a lot of opportunity there. We're focusing more on public transport. There are more parts coming in with within 10 minutes of walking from households, so these are great strategies. They're really focusing on landfills. Circular economies one part of taxi money, which defines as green things to circular economy, are going to recycle your products. And the trends are not.
Only I would look at Corporates usually cooperates with one of the biggest in order to CSR, I think, is a great strategy development bonds linked to Russian linked bonds or even social bonds to take out, you know you can go to the market. I think that's a fantastic opportunity for markets to do. I talked about the university's big, big universities, now could go on to financial sovereign sovereign bonds or sovereign countries. Countries should go and take it.
I see a lot of potential if, uh in India and around the world, as a matter of fact, in municipal bonds, I would take out municipal bonds so that I could go up. And I mean, I think we need to take out at one point of time, but you could go out. This is untapped sort of market where you know you could raise for the communities in the community model works a lot, which is pretty good, which has been followed in America.
I would say this would be the lines of all the teams circular economy, transportation, infrastructure. Now about 42, I think 40% of the global 40 to 60 years. I'm not sure on this figure, but always came over the report. So infrastructure is of where you should be. Buildings, you know, be compliant with green. This is a great aspect which one should be looking at because that is where ultimately it's not only that they should be monetized. We should be a taxing carbons.
And I'll also come into this when we talk detail. But what we need to do is think how we can lessen the pollution. That would be the ultimate tale. Hello and welcome to Episode two of Lomo, the video interview series organized by the Alum 19 I Smart and Our STT to improve yours. The student's knowledge in a variety of domains through the knowledge and experiences of our own alums. For Episode two, we have with us Mr Nation Malhotra, founder and CEO of the Middle Role.
A platform that enables social change and impact. So is an alumnus of s IBM punch from the batch of 2002 where he did his MBA in sales and marketing. So it is also a graduate of the China Europe International Business School, where he did his M B A in general management and the University of Michigan, where he has done his masters in public administration. Sore has vast experience in a variety of domains, but primarily majored in the field of finance and financial management.
So over to you and it's a pleasure to have you here with us. Thanks for God. Witness for some of the time, the whole s IBM team for inviting me pleasure and honor to be here invited as a guest. Uh, you had mentioned, you know, with colleges and you know other investment such as municipal bonds. So could you talk more about some of the opportunities for both public and private sectors to issue green bonds and loans?
Apart from the more universities in America where the municipal bond market is very liquid? I mean, you don't have some liquid from talking about the global institutions. For example, Michigan has about about 11,000,000,002 and 17 billion. And how much of this as an endowment fund? So these are the sort of your Yale fund you know, when they're looking at a huge size where they go to the market if they are looking at, you know, raising money just to sort of.
But for some work which is going to be in the university, that is what I was talking about. Now, when you're looking at municipal bond market, it could be for, you know, walk for example, infrastructure. Now let's say I want to build a role right. That is one way of going to the bond market. I want to build a road. I want to build a bridge. I want to build museums. How do I do that? I know museum could be apart, although it's strictly I don't think so.
It comes in social bonds, whether art still hasn't been very closely integrated. But if you're looking at roads, bridges, dance, these are parts aspects which could unl I on the fringes are raised through the green bond sector or some of the whole lapping sustainable one sector. These could be some of the themes which, as a in the missile wants people go on and do raise the money. Now, when you're looking at Corporates, Corporates could be anything right.
Everybody has a CS are not mandatory in India anyway. But look at look at term ax. It's a leader in a lot of fantastic work. After Max wants to go to the market, it could, you know, talk a lot about green machines. For example, I talked about and with the help of populist the choice, actually funded by impact investors. Now she could go to the market because it's green finance, greedy in finance, green machinery, right? So this aspect comes into you spoke about impact investing.
I think this is where we can pick it up again for our audience. So could you explain the concept of impact investing particularly, you know, looking at the financial social return metrics. When you're talking about impact investing, it's basically when you're looking at investing, you're actually always looking for financial returns.
But when we're looking at impact investing, its intersection of social and financial returns, both of these returns then only qualifies as impact investing plays like s icon on the acumen. So these are very big names around the world you know who are actually doing impact investing when you're talking about impact investing. It could be on one part we are talking about. Take it as a mix of concessionary and non conscious missionary funds. 11 is a grand fund where you're not.
You're into nonprofit sector and you don't want to it, and you want to do good. That's it. You should be actually again measuring your impact if you're doing what you should be having at what sort of impact you're doing. However, if that impact you want to know and you also want a financial return, that is impact investing. You want to go into those sectors where there are no entrepreneurs who are trying to give a solution at the bottom of the pyramid.
I mean, that might not be strictly for the less privileged people. For example, I call the mineral of social and platform because I'm giving the best whatever things at free or if various subscription charges or, you know, other page. It's still, uh, is going to have a lot of things which are going to be free for people.
It has a holistic concept behind it that it's not only profit maximization, which is what you would be looking at in a purely conventional sense or a traditional sense, but you want to maximize profit, but as well as do good. So this is what the philosophy of which I feel and that's what I'm driving in my startup, right? That maximization of profit is not the ultimate goal of a platform just to have, uh, okay, a good definition.
So when you're integrating these two you're getting what is, um I will use the blending of basically traditional and a concept. So somebody very beautifully described it could be philanthropic investing, which you're talking about, and you're talking conventional investing. And you should take a mixture of these two you come with impacted, Mr. This thing is pretty similar. It would go on.
It will identify startups, maybe which are not listening, to fund them up at different points in time that they are not seen in depth or it is done. The expectation is that you are like a social entrepreneur. You could be making your sustainable. You have a sustainable business model. You have a sustainable revenue model. You're able to have an impact. If you have enable impact, you're going to be able to measure and show it a lot. A lot of impacts could be very easy to measure.
A lot of impacts might not be easy to measure, which I call positive externalities. Basically a social startup in a true economic sense, is giving a lot of positive externalities. That's why it's basically subsidized. Its products are much more valuable to the society than what it is prized him. That's why it's known as a part of also a market failure. Within the positive benefits are much higher than positive social costs who are not at equilibrium of demand and supply.
That's put it up very well. This I think actually a discovered to rewrite right now. When I was talking about how to put a positive externality so you could say that impact investing. So looks for those startups or those entities are actors who are making a positive change in the society through positive externality, which are not his into measure.
One of the things that you know came to light during the Covid 19 pandemic with all the lockdowns happening across was the, you know, positive impact that it had on the environment, particularly with industry, is being shut down. The levels of pollution dropping drastically. I mean, Delhi had its fog levels cut down China. You could see the sky again for someone want to thank uh so, you know, with regards to, let's say, uh, countries coming together for strategic alliances.
So what do you feel is the scope for strategic alliances, particularly in the case of green bond market development in economies like the G 20 and other economy emerging economies? Okay, before I go to you, could you talk about pandemic? I just forgot to mention that in Social Bonds, one of the major partners pandemic bones, and he said, what should be the recent trends?
I think pandemic bonds should be coming out a lot, especially difficulties like India is a great way to go to the market, raise money, get a health care system up, right? I mean, the number of doctors which we have open up hospitals all over India, not oxygen plants. But at least we should have, uh we can't sort of say, world us. We should admire what the Western countries are doing, Or even like China, how they have also, you know, increase their health care system.
They're making it much more equitable. So these are the things which are pandemic. Bonds would be very influential, especially in countries like not only India, Africa, Latin to make a lot of places. Brazil is doing great. You know, Brazil is doing some very nobody thinks if you look at Latin America also in making things more equitable now coming to your question of the strategic clients, I think serve a good alliance was established bank.
I think I think there's another entity, German, and I think it's a very good initiative. There's a lot of corporations, so, you know, a lot of work is being done. For example, in Mexico, if you see the recently I was reading they heard about 200 to about 200 or plus billion dollars where they have raised money to, you know, sustainable urban sector. So that is that is amazing if we have more corporation. So there is a report which comes out which looks at G 20.
Uh, interesting things happening like no people have come out. Not only s t and you know, there's a lot of nexus going on, like, what will you do? For example, you you has come out with the tax money. I mean America to No, I don't think so, All of it. But if they care what is fantastic, India could do it. I have not seen any green bond principles. We just come out in India, although India has come out and said that we're going to lessen the number of the carbon footprint by 2030 by 33 to 35%.
So there's a good initiative coming out and giving a K P. A is great. These are very important. So if you look at all the countries around the world, there's some very interesting things happening around. There's, you know, people are coming out the things that are happening in Australia. Things are happening in, uh, like I talked about the single the Singapore Initiative. There's a lot of things going on in Latin America. So there is, You know, the lions uses each other And, uh, price.
So, for example, let's say if you has come out with this, uh, you guideline, it motivates somebody else to come. You give it 20 ideas, okay? This is how they're thinking. This is what we cannot incorporate. This is something which we can do. I mean, they're an advanced economy. In that particular reasons, every country will have to sort of think what measures they can do. What is more important for me in India, I would still stay like Okay, There's still so many people I want.
I want to open up equitable, more education institutes, or, you know, a lot of things which could be very different from what another other countries. So this is one the other could be, uh, you know, coming out. For example, in the S t. A. They have these trainings. I f c has started a Green Bond academy. Now, this is an excellent step.
This could be for G 20 countries or foreign more countries where you're actually appraising people or financial institutions, you're giving them more knowledge about it. So the more knowledge it's going to be, all the more knowledge going to probably for it. The more understanding of the bond market would have the most sophistication of investors. It will be, and the more pricing discovery will be you, that is one.
I think a lot of times not only we can take best business practices, other could be. There could be cooperation when I take it talent from other people like one of them, which I talked about was Green born Academy, wherein you have talented people know I was listening to it. Eastern Europe is doing something very interesting.
I say, Hey, man, come on, come into my country Let's do something where I can take your expertise, start up something on my own You know, different countries working together in collaboration. That is something which I think because, for example, this green born I think academy I've started with Latin America successful day and this is a fantastic initiative. I just love that that they've gone to Eastern Europe. I didn't attended one of the webinars. It was really amazing.
And, you know, new new things are coming up. I think things come from one country. It has a holistic. It's got a positive Excellent. Hello effect. Go. People will do. Do good the other countries to sort of those things. Yeah, uh, continuing on the same place. Nahshon, how effective do you feel is the page initiative the Partnership for Action on Green Economy, You know, in terms of providing, uh, holistic support to countries on their sustainable development goals and a green economy.
Okay, so this good question, I was an excellent question. I was not aware of it. As a matter of fact, after you send me the questions, I, you know, looked at it. I googled it up, so it looks like, excellent. I really don't know how effective it is. I think somebody from the United Nations or somebody from the government agency could say, but the idea is excellent. It's a joint venture with five United Nations agencies. The environmental, Uh, hello.
So I a low labor group is very interesting because in the elites or a lot of countries needs a lot of reforms in that particular sector that it's you, so that would come under governance. So when we're talking about the sustainable bonds, I could make a bond which looks at how much is the productivity of and what are the best business practices have been with employees.
If I raise a bond, which proceeds are going to be, you know, uh, doing some sort of work in that particular department that would come under the governance structure. From what I would understand, it could also maybe come into social. And the shared knowledge is a very important thing, which I, you know, talked about. We don't know how effective they are. Frankly, we come now towards the end of our interviews. What would be your advice or recommendations for?
You know, our NBA students who would want to pursue a career in sustainable finance? Okay, so this is not only for s I d m. This could be all for a lot of people are wrong. Of course.
Now the career path, which I could vary from the institute's if you're in leading institute because much more easier to whether these parts various ways, you can cause you a career and sustainable find somebody is thinking about a career in sustainable finance ahead of the girls should become an important line as we go forward. One it could be. You start with the idea of to go into an impact investment.
Now that is one created, visible part I can see from leading school specifically from a Siberian. How you'll start there is like an impact investor might not take you directly. You would work in investment banking part wherein you could look at equity valuation aspects very specifically that that's where most likely you would like to go in what they're before you transit into different impact investors.
That is one character visible part which I can see, and then you go into there you keep in touch with what is the recent trends happening in sustainable development because first go back to because I missed out to three parts. You're looking at impact investing and you talk about the frameworks chlorate overdone sa ra.
So sa ra is a framework which lot of measure how you're going to be measuring the impact of how a framework would go into define video objectives you could look at Jin Jin has come out with its own metrics. It's own thoughts. A lot of people have come out with his own thoughts. It goes to clearly of change. You could also look at the area of change model within you. Look at what are the outcomes?
You clearly define what those outcomes are, and then you go back where you set up the interventions to achieve those outcomes. First, you define value investing philosophy. You know what you want to do. You have those investment philosophy that you have set a set of interventions when you are setting up those interventions, how you're going to be calculating.
One way of calculating those interventions which I talked about is externalities negative externalities and I have also models which you can look at. So when you're looking at negative externalities, you're going to be taxing those negative externalities and we look at positive externalities your subsequently subsidy subsidizing. So these are the various steps. There are other ways which you can look at.
You people do an impact violations something known as R, C T or randomized controlled trials. When they look at what is the difference between factual and counterfactual. So there is one way of these are like our cities are done for a very long period of time. To sort of know it could be simple or difficult, but our cities could. People could do also for less than a year's notice. People are doing it to really, or it lets it whenever we're talking about taxing.
So one could be the carbon taxes, which we just give you an example. All good carbon taxation is just a part of it, right? So this are certain topics which you have a fair bit of an idea. Why I'm coming to This is, Let's say we want to make a career and you say I want to go to sustainable finance if, no, actually, what you need to read on how you want to proceed in your career part. So these are things which you just get a very good knowledge of microeconomics.
You get a very good knowledge of valuation. These are things which are going to help you. If you want to make a career in sustainable finance, get a good knowledge of fixed income, right? So one part I've talked about is impacting now. Second, what you can do is go to a major back so these banks would come out with bones offering, you know, investment banks, torches. So you work for asset managers and banks in the mainstream department all days.
I think it's pretty mainstream to know if somebody is coming out with a sustainable bonds, you will have to be in either the text or equity side. Now, when you're talking about Bonds, of course it will be a dead side. Now, when you're looking at equity, there are a lot of devices which are listed now, so there's an equally portion also getting you can go in. You have M s. I, which is you know, has specifically listed sustainable going Tendai CTS Are there, uh, equity portion which you can go in?
You could go again now equally side or that side equally side you could be, you know, cross selling products. I think what I see a future trend. Now it's good. Another trend which I forgot. I think the future trend would come in equities which is coming in. You know, nowadays people are as us taxi money in China and other countries will come and and there is a lot of more transparency coming in now.
The other thing that's just coming out is like you'll be going to clients and selling antiquities. Police were, uh, the size of India's market, and you can check it up. It's increasing, so that's one party would go into the back. The thought is you could go to our corporate and you could be in the social development side, which could be in the society. Could work on a intersection between CSR and that.
Once you when you go to a corporate, of course, now here you'll be going to a company which has a very defined CSR strategy, which is futuristic and which is looking at tapping the capital market in future, if not now, through the sustainable stupid such a company would be massively or usually would take a problem with it. It could also tonight need not be a problem, but it it could be a futuristic company, which is thinking of going at that side.
So you could be looking at an impact company, which could be a social impact company which predominantly has a part of its mission in Braille in the CSS state. So if you're looking at such a company, this company, which in future certainly tapped as the campaign growth into the sustainable Boerma. So this world fourth, I would say, is like also start exploring abroad for somebody like maybe you could always go.
There are two major centers in Asia would say, Singapore and Hong Kong, you could look at if you could go abroad. Europe is, of course, open, and America is very big. Also, America is hugely into acid, so you could walk in mainstream traditional finance so that tomorrow you have a chance, maybe 35 years down the line, depending on how the moments move that you could move in. So if you want to be in sustainable finance, you should be predominantly in financial services.
I think that's that's a pretty comprehensive roadmap that you covered for students as well as anyone looking for, you know, building a career in sustainable finance. Uh, that, I think, brings us to the end of our interview as well. Uh, I just forgot another thing.
Good. Sorry, because this will help, You know, I think, uh, sustainable finance going to become really big and sustainable products become weak and ask management space specifically proud back If you want to make a career, I mean India not sort of very highly recommend people to be now if you go abroad because a lot of flexibility with But you can work in India and then they don't move abroad. There I was thinking like, Well, look more structured products.
Try to be in an international site where you have complex structures you can walk in. There are very good idea about structured products because equally what I'm saying is sustainable products would come on this, you know, like for example, step up open. There'll be a lot of different structures, and more complicated structures would come in as you go forward to suggest that you have a very good understanding of options option market.
You should have a decent night's and you should have understanding between a put call parity. But rather also, what are exotic options? Just look at it. Have a brief idea of very thank you so much for that.
Uh, we'd like to take this opportunity to thank you massively for taking time out of your busy schedule to come and, you know, educate us with about sustainable finance and the various aspects of sustainable finance you also covered, You know, the opportunities, challenges, trends that are coming forward, sustainable development and investment opportunities where we could see a collaboration between the public and private sectors as well, uh, impact investing and its relevance going forward.
And, of course, how crucial. You know, collaborations between nations are specifically in terms of strategic alliances for green development in green bonds. Uh, John from everyone here at S IBM Boone. We thank you from the bottom of our heart, uh, for this opportunity, and we really look forward to hosting you on our head top campus in the near future. Thanks. I really appreciate Thank you. Maybe send you a bit of a note on SNL since I talked about I think that's a structure which we see.
You'll get a fair bit of idea what's happening right now in the market and an international size. Whenever I'm talking about international and thank you, I look forward to meeting in person. Thank you so much. Nation. Also for the audience,