Responsible investing is more than just a strategy and practice

Entrepreneurship is many things, but most of all, it’s the opportunity to start with a blank slate. Founders build every aspect of their business from the ground up, including how they want to work, what values they practise, and what sort of culture they wish to adopt. If you look closely at many start-ups today, you will find some element of environmental, social, and governance (ESG) practices in their make-up already, because these are Millennial and Gen-z founders, and they have a sense of responsibility towards the world around them.

For them, I don’t think responsibility is something new, or something externally imposed. They already have a purpose — in some cases it’s articulated, in others, it isn’t formalised yet. When a brand like Vahdam says, “there’s a better way to drink tea,” they’re promising innovation and authenticity, not just in the form of a product, but also in the way that the brand does business — in their case, by being plastic- and carbon-neutral.

Between the pandemic and India’s internet penetration, we now have consumers who live their lives digital first. It has certainly accelerated trends like health and wellness, and the penetration of e-commerce and q-commerce. It has also made movements like #Metoo, Black Lives Matter, and the climate crisis protests mainstream.

Consumers today aren’t just shopping online, or passively consuming streaming TV shows – they are also tweeting about pollution in Delhi, and tree-cutting in Mumbai. Their Instagram feeds are full of pictures of themselves making better choices. They are signing petitions online protesting social injustice. They are crowdfunding movements of their choice.

As a fund, we’re very aware of conscious consumption. We’ve worked with consumer brands long enough to see that it’s both, a consumer “ask,” as well as a founder “value.” And that’s what makes this generation of founders more intrinsically responsible and conscious – they are “sharks” only on TV.

A good measure of this is how generational consumer brands and companies have adopted ESG and DEI (Diversity, Equity & Inclusion) measures. Welspun is on the Dow Jones Sustainability Index today, well ahead of its playing field. Unilever India is now 100% coal-free, and has also introduced a slew of employee-friendly measures under U-work and Flexi-curity.

Consumers are doing it. Start-ups are doing it. Equally, investors are following suit, and prioritising responsible investment (RI). At Fireside, we see RI as more than a strategy and practice. We call it the Value of Good — our endeavour to pursue the triple bottom line of people, planet and profit, while “giving back” to the start-up community.

We’ve been working with companies to help them prioritise areas on which to work, and partners who can help them achieve their goals. And it’s been a pleasure to discover the kind of work some of these organisations are already doing with start-ups.

In the area of sustainable packaging, there’s Lucro, which enables the circular economy by recycling, segregating, and creating new products like shrink wraps, and pet bottles; Refillable, which provides reusable packaging and refilling solutions for home care products; and Think Ecovia, which offers multiple-use packaging that they collect from the buyer for reuse.

We believe that it’s up to us all to invest in, support, and grow brands and companies that do business responsibly, and do good for the planet. For example, seven of our portfolio companies are plastic-neutral, and recycle anything between 1,000 and 5,000 kilogrammes each month. Imagine this taking place across all 28 companies of our fund, as well as other brands in the digital first space, or even the start-up ecosystem as a whole.

After all, it’s probably time for an Indian Allbirds or Patagonia or Tesla to be born — successful, aspirational, great-quality brands hardwired for sustainability, innovation, and yes, responsibility.

Kanwaljit Singh, founder and managing partner, Fireside Ventures. The views expressed are personal