With environmental, social and governance (ESG) investing evolving at speed, investment managers face the challenge of finding data with which to accurately measure ESG-related risks. Kalyani’s goal is to make sense of this space for fund managers and corporates, while keeping track of changes to the various benchmarks, standards and frameworks that govern the responsible finance sector.
“ESG is still a relatively new concept and there’s a lot of jargon,” she says. “Everybody's struggling to understand the dynamics and nuances of this everyday changing landscape.”
She intends to do this through the creation of a platform that acts as a “dedicated educational catalogue” on all things ESG, while also connecting users to other stakeholders in the wider ecosystem of ESG, sustainability and climate risk research. “A lot of the small to medium fund managers, and other market players such as researchers, corporates and banks, say they struggle to find the right information on the niche experts” she explains. Kalyani adds that her platform will involve “high-level vetting” of experts in the ESG and sustainability space.
“ESG is still a relatively new concept and there’s a lot of jargon”
She plans to interview more than 500 ESG-focused asset and wealth managers globally, with the goal of understanding their most significant ESG-related needs, the “ESG nuances” of their work, and the issues they’re facing on a regular basis around access to data, research, ratings and carbon emissions analysis. Having carried out over 75 interviews to date, she says she’s seeing commonalities in the challenges investment managers are reporting. Many complain about the lack of detail in most ESG data sets and the inadequate coverage of emerging markets, for example.
Entering the world of responsible finance
After obtaining a postgraduate degree in international finance from the University of Glasgow in 2005, Kalyani entered the financial services sector in 2007 as an investment data analyst, moving on to varied roles in data analysis and investment writing over the following nine years. Swayed by the increasing urgency of the climate crisis, she began focusing on ESG in 2016, and completed a course in Advanced Responsible Investment Analysis from the United Nations Principles of Responsible Investing Academy.
She then undertook an MBA from Imperial College Business School in 2017 and was simultaneously selected from her cohort to study at the ESADE business school in Spain, where she revisited topics related to ESG and impact investing. For her MBA thesis, Kalyani proposed a strategy to achieve future objectives in India’s solar industry – a topic she’s been passionate about since childhood. “I was born and raised in India and have been closely watching its progress towards becoming one of the leading nations in solar energy,” she says.
Kalyani’s final report proposed a set of solutions for India’s solar industry, including taking advantage of opportunities and addressing some of the industry’s barriers and limitations. Her recommendations for the Indian government included: realigning the tax framework in favour of solar power technology entrepreneurs and developers; reducing taxes on rooftop solar panels; conducting a survey of India’s villages to identify low-cost options for sustainable electrification; and decentralising the regulatory system to reduce red tape and encourage a smoother flow of project approvals.
In 2019 she was awarded the CISI level 3 International Certificate in Wealth and Investment Management (ICWIM), and in 2020 she featured in the CISI Be a Professional campaign, talking about what it means to her to be a financial services professional. She is currently studying towards the CISI level 7 Chartered Wealth Manager qualification.
Kalyani has written extensively about ESG. In 2020, she co-authored a chapter in The AI Book by the Fintech Circle – a global platform for professionals in the fintech space. The chapter, titled ‘The impact of AI on environmental, social and governance (ESG) investing: implications on the investment value chain’, addresses issues such as AI’s potential to deal with inconsistent information from data providers and the governance and ethical challenges of implementing the technology. She most recently co-authored an article on ‘The evolving landscape of big data analytics and ESG materiality mapping’ published in The Journal of ESG and Impact Investing Winter 2021.
Working with ESG investors
Since completing her MBA, Kalyani has been engaged in consultative work and has advised several clients, ranging from venture capital firms to corporates and fund managers. According to Kalyani, one of her consulting projects involved developing an ESG dashboard. She interviewed over 400 global ESG market participants from roughly 65 countries, and was able to create a digital taxonomy of the information she gathered. Kalyani says this allowed for further intelligence mapping of the ESG market, giving her a unique perspective and a grounding she has taken forward into her current project.
Slow sector progress
The relative lack of enforcement when it comes to disclosing carbon emissions data, and the extent of greenwashing, are two huge issues which, in Kalyani’s view, continue to hold back businesses from making real progress on ESG and threaten to derail the net zero targets of governments around the world.
Despite countries like the UK bringing in mandatory climate disclosure rules for the largest companies, for Kalyani these measures fail to go far enough. She calls on governments to provide more help for small to medium companies, so that they might also begin recording and disclosing their emissions information. “It’s vital that SMEs get the knowledge and financial support they need to kick-start their own journeys to net zero,” she says.
On greenwashing – or what she dubs the “misrepresentation of investment products that makes them appear more environmentally friendly” – Kalyani welcomes the EU Sustainable Finance Disclosure Regulation (SFDR) rules which came into force in 2021. She says it’s important that governments continue to develop and enforce strict standards in this way, so that the “sustainability stamp” for companies remains reliable.
“It’s vital that SMEs get the knowledge and financial support they need to kick-start their own journeys to net zero”
The road ahead
A trip to the COP26 Climate Conference in Glasgow in November 2021 crystalised for Kalyani the extent to which climate is now at the top of most business agendas. Kalyani is currently a member of the British Standards Institute’s SFS/1 Sustainable Finance committee, contributing to the development of standards in sustainable finance. She is also keen to achieve the CISI’s level 7 Chartered Wealth Manager qualification, which will help inform her ESG consulting work with fund and wealth managers.
Going forward, Kalyani believes one of her main challenges will be keeping abreast of ESG’s ever-evolving set of frameworks and benchmarks. She enjoys learning, and is looking forward to the process of constantly updating her knowledge and acquiring the right qualifications.