In Conversation with Kanwaljit Singh, Founder, Fireside Ventures

From marketer at Hindustan Unilever to Founder at Fireside Ventures, Kanwaljit Singh has the inside track to building successful Indian brands. He talks to us about Environmental, Social and Governance (ESG) goals – a topic very close to his heart – and explains why ESG compliance is not about company size, but about company DNA.

When we talk of ESG goals, many young companies will say “It’s too early for me to think about that.” What would you say to them?

KS: It’s interesting that many companies will say that it’s ‘too early’ to think about ESG goals, even while they’re probably pursuing one or many of these goals, but in a less planned or charted-out manner.

Yoga Bars has built a brand around clean ingredients and healthy eating. Vahdam Teas is helping educate the children of workers in the tea estates they source their teas from. They’re also fanatical about being plastic-and climate-neutral. These are young brands, but this is who they are.

Additionally, ESG isn’t just about the environment, it’s also about social and governance. Which means aspects like diversity hiring, gender equality, and even strong dignity of labour practices.

In our view, thinking in terms of ‘early’ and ‘late’ kind of misses the point. ESG is a part of what your brand is. And I would urge more young companies to seek out and define what their direction is.

Take Fireside Ventures itself as an example – the direction of ‘giving back’ to the community was always there and you’ll see it in our blogs, or when any of us speak to the entrepreneur community. But today, four years on, we’ve defined it for ourselves. We call it The Value of Good and while it’s on the wall of our conference room, it’s also in the framework we are developing with Pricewaterhouse Coopers to take to our portfolio companies.

What is your advice for handling the cost implications of ESG compliance? For example, it may be more environmentally friendly to use a certain kind of packaging, but cost pressures may not allow for it.

KS: My advice would be to look at what ESG truly means for your brand, and to consider all the aspects of ESG, and not solely the environment. I believe that if you break it down into its components and start the journey, you’ll soon see that it has more to do with the DNA of the organisation.

Revisit the core of your offering, and then see what shape your brand’s ESG narrative will take. There are many, many innovative ways to be a responsible brand: Recycling is one, as are refills and reusables. A subscription model is another. Packaging that uses minimal resources – say, shredded waste paper rather than bubble wrap – is a third. Renewable energy is a fourth. I could go on.

In fact, in many conversations, we’ve seen that it is not cost-intensive to be socially compliant and walk the talk of inclusivity and diversity within your organisation. Likewise for having codes related to anti-corruption, or for working towards the health and wellness of all employees.

Do you believe that in India, a large enough market will choose brands based on their values and ESG compliance? Currently, this seems limited to a small elite set of consumers. Could you give us examples of young Indian brands who have successfully used this as part of their core message?

KS: It’s no coincidence that this is being called ‘The Age of Responsibility.’ Today’s brand-owners themselves are as concerned about the impact – environmental, social, ethical, etc. – of their products as their consumers. This shared world view makes for great community-powered, consumer-focused brands, but it also creates an ecosystem of brand owners and brand consumers that are united in their view.

In my experience, this isn’t SEC-specific, it runs across consumers of a certain generation. They don’t want to waste. They don’t want irresponsible consumption. They don’t want local talent to suffer. But they do want all the choice and convenience of a digital-first, health-first, planet-first ecosystem. And it’s up to all of us to meet their needs.

With a sustainable offering, you’ll attract two kinds of consumers. Some are willing to pay a premium for a sustainable product, while others will choose it over another product – all other things being equal.

Look at Mamaearth, a brand that is doing well across geographies. Consumers in big cities and small towns alike appreciate their tree-planting initiative – and it’s valuable to realise that the initiative itself was born out of consumer research they were conducting. And if you go back to the inception of the brand, you’ll recall that it launched with MadeSafe certified, toxin-free products for kids. That sensibility is in their DNA.

Another example is Slurrp Farm, a thoroughly modern brand that offers pancake mixes and cereals that do away with what they call ‘junk’ ingredients. How are they doing it? By reintroducing millets and whole grains that were part of our grandparents’ diets – and, as a result, acting as a shot in the arm for generations of millet farmers across India, as well as bringing a climate-smart supergrain to all our dining tables.

I also think that it’s incorrect to view India as any less of an innovator. After all, a company like Hindalco, which is No. 1 for aluminium on the Dow Jones Sustainability Indices (DJSI), uses radically innovative initiatives like tying up with cement manufacturers to use red mud – a by-product of aluminium processing – instead of mined resources.

Digital penetration in India has been rising steadily, and been further accelerated by the pandemic. As a result, brands like Gynoveda which provide herbal and Ayurvedic solutions for menstrual health of women are finding traction in the big cities, as well as in ‘Bharat.’

Do you think that investor expectations and funding contingent on ESG, will be a big change agent for the Indian consumer product ecosystem?

KS: ESG has come to the forefront as a lever for diligence and reviewing companies. It can well become a change agent, but what I believe is the more exciting behaviour is that many of the younger brands we come across today already have sustainability in their DNA.

It’s true that several large investors are driving ESG as a key parameter, but the opportunity goes beyond that of compliance.

We ourselves are definitely working towards being ESG-complaint not just as a fund, but also supporting our portfolio to do the same.

Big issues like climate change can seem daunting and far away from day-to-day business. How can we make these goals seem more immediate and urgent?

KS: The journey to being environmentally conscious and socially responsible is a marathon, not a sprint. When you implement one small change in a factory, it may seem underwhelming, but if you do it across the board, you’ll end up with a significant impact.

Consider the energy savings if all twenty-five of our portfolio companies switch to energy-efficient lighting. It’s the same for ethical sourcing, or local suppliers.

Even if a founding team is passionate about ESG goals, often the message does not get institutionalized as the company scales. Is there any kind of process that young companies can set in place early? Any examples from your portfolio companies of how they are approaching this?

KS: I don’t quite agree with this, to be honest. Much like how founders of new-age companies are more driven towards sustainability, their teams, too, have a similar approach and belief. As an example, I’d mention Vahdam India, which has a dedicated Chief Sustainability Officer whose responsibility it is to ensure that the company is compliant. Design Café has been implementing innovative and creative ways of recycling and reusing raw material – and this practice is driven by the vertical heads, and not the founders. Slurrp Farm runs an awareness program called Profit, Planet and Purpose and has dedicated KPIs for being ESG-compliant.

Would you give us examples of Indian startups who have made tangible progress with ESG commitments?

KS: I’ve talked about them in greater length in my earlier responses, but the ones I know firsthand are Vahdam India, Slurrp Farm, Fable Street, Mamaearth, and Design Café.

This is a copy of Vahdam India’s latest Sustainability Report. 1% of their profits from sales are reinvested in their TEAch Me initiative, which educates children of tea estate workers. In response to the pandemic, the company has undertaken several relief measures in the areas of education, donations and NGO partnerships, including Tea Estate Workers Relief, which raised INR 2.5 million through crowdfunding.

At Slurrp Farm, they invest 1% of their profits to NGOs supporting children and children’s shelters. They are a team that is 50% women, and are committed to equal opportunity hiring.

Fable Street has moved to an offering of almost 70% natural fibre as raw material. They are also very strong on governance, and only work with suppliers who comply with the required norms.

Mamaearth has planted over 1,10,000 trees which can be tracked by geo-location. They also run a program to recycle and reuse their bottles.

All Design Cafe warehouses and offices use energy-efficient electricity. They take health and safety very seriously, with policies and ongoing training for carpenters and workers. They also have excellent waste management practices, where leftover wood and scrap is converted into biogas, and glass that can’t be recycled is upcycled.

There is no limit to what brands can do, if they have the intent. My advice is don’t wait. Start today.