L Catterton in JV with former CEO of HUL Corporate India increasing sustainability moves: ERM
India’s sustainability consultancy mkt is expected to grow at a CAGR of 7.5% from 2021-2030
Consumer-focused private equity fund L Catterton, backed by French luxury brand LVMH, on Thursday said its Asia platform (LCA) will form a joint venture with former Hindustan Unilever Ltd. (HUL) chief executive Sanjiv Mehta to develop a new investment vehicle.
“With India now having the world’s largest population and with high GDP growth, there has never been a better time to deepen our commitment to the market and invest in consumer businesses,” said L Catterton global co-CEO Michael Chu.
The venture will seek Indiabased investors and will deploy funds in a coordinated manner with L Catterton’s pan Asia fund, a person familiar with the matter told Mint.
In line with the firm’s ability to provide flexible capital, the JV may acquire a mix of minority and majority stakes in enterprises from startups raising Series B funds to more established companies, with deal sizes spanning $25-$150 million, this person said.
Mehta, who will serve as its executive chairman of India, effective 4 April 2024, will be involved with LCA and the firm’s other global fund platforms more broadly, the company said in a statement. “With L Catterton’s global reach, investing expertise in the consumer sector, and familiarity with the region, all augmented by its strategic partnership with LVMH and the Arnault family office, the firm is very well positioned to succeed,” Mehta said in the statement.
Indian companies’ shift towards environmentally sustainable operations is intensifying, going by the notable increase in firms that use sustainability consulting services, Mollshree Garg, India managing partner at ERM (Environment Resources Management), a global pure-play sustainability consultancy, said in an interview.
She said the country’s sustainability consultancy market was worth $255 million at the end of 2023, and has the potential to achieve double-digit annual growth in the coming years.
According to ERM, India’s sustainability consultancy market is expected to grow at a CAGR of 7.5% from 2021 to 2030, but Garg said it could grow even faster. “These estimates, according to my experience, are very conservative. I have seen a 30-35% rise in the companies’ budgets for sustainability-related matters in the past five years,” she said.
According to data assessed by ERM, key players in energy, financial, healthcare, manufacturing and pharma sectors are leading buyers of sustainabilityrelated consultancy services.
Initially, matters concerning sustainability and ESG (environmental, social and governance) were associated with corporate social responsibility (CSR) but that’s no longer the case, Garg said, thanks to ever-increasing awareness about environmental and social challenges, regulations, and pressure from investors and consumers.
JSW Steel, a part of Sajjan Jindal’s JSW Group, recently announced substantial investments to set up green steel plants, while Hindalco is integrating its pumped hydro system to co-produce 375-400 MW of solar and wind power. The Adani Group announced fresh investments to build the world’s largest green-energy park, spread across 725 sq. km at Khavda, Kutch, which is expected to generate 30 GW of renewable energy.
Supply-chain management and procurement, materiality assessments, sustainable investing and finance, and climate risk and adaptation services are
JSW Steel recently announced substantial investments to set up green steel plants
HINDALCO blending pumped hydro system to produce 375-400 MW of solar and wind power
predicted to lead the demand for sustainability consultancy services by 2030, Garg said.
Companies such as Mercedes-Benz, Tata Steel, Dabur, Amazon and Tech
Mahindra are taking the lead in adopting green transport for last-mile distribution, supply-chain operations, and even for employees.
Though companies are increasingly looking to manufacture greener products, India still lags the global trend, she added. Developed Western markets have a greater willingness to pay for environmentally friendly products
ADANI Group to build the world’s largest green-energy park spread across 725 sq. km at Kutch standards or incentives from the authorities that could make consumers choose lower-carbon products,” Garg added. “This eventually makes companies less willing to invest in greener production methods.”
The market for green products in India is underdeveloped outside certain segments and, therefore, has greater scope for expansion with proper government intervention, she added.
Since it set up shop in India, ERM has been routinely advising central and state regulatory authorities on policy matters. It is a consultant to the Central Pollution Control Board for eight contaminated sites under the National Program on Remediation of Polluted Sites. ERM India also drafted the Environmental Clearance Notification and Environmental Impact Assessment guidelines, an element of India’s environmental regulatory framework.
FIRMS like Tata Steel, T Dabur, Amazon and others are taking the lead in adopting green transport
owing to more awareness and sensitivity towards environmental issues.
“Despite the environmental benefits, the demand in India for such alternatives is weak due to the lack of compulsory