namaste we’ve all been following the
discourse of how capitalism needs to
change improve evolve we’ve gone from
single bottom line profits to the triple
bottom line of profits planet and people
this triple bottom line has also now
evolved into the quadruple bottom line
of profits planet people and purpose
we’re also seeing the convergence of
ideas such as mindful capitalism
thoughtful capitalism conscious
capitalism social enterprises and so on
in the world of capital where I spend a
lot of my time these days we’ve seen an
evolution of sustainable capitalism
sustainability responsible investing
socially responsible investing the
United Nations in fact has put together
something they call the principles of
responsible investing which is a pretty
deep broad framework with a rating
system fairly detailed which guides how
allocators of capital allocate money the
funds what’s behind all this what’s
driving all this the cycle of excessive
consumption that we have seen over the
last two decades has got to the point if
the 7.5 billion people in the world
consume average American it will take
approximately 5.3 Earth’s to fulfill
that just think about that more recently
we have all experienced the ill effects
of the global financial crisis that
happened in 2007 2008 we all observe the
underbelly the ugliness of what can
happen with capitalism when it goes off
the rails we’ve also seen in in our own
environments personal environments how
individuals have reacted with angst to
what’s happening in the workplace
today there’s a tremendous amount of
stress his impact a well being not to
mention the immense number of scandals
coming out of the corporate world with
executive pay you have some companies
where CEOs are paid hundred x hundred
times the lowest wage in their companies
we’re seeing scandal after scandal in
terms of lobbies that are ensuring that
markets are distorted missing sexual
harassment we’re seeing child labor
missing exploitation of labour in very
poor countries the point here is that
evolution of capital is started to
absorb these changes that are happening
the other big push force is activism
shoulders many of them individual retail
shareholders environmental activists as
well as active boards are starting to
push back as well I’ve called a dharmic
capitalism to me Darmok capitalism
represents an end state perhaps a state
of equilibrium of where capitalism can
get to and will be sustainable Dharma to
me which is where I derived the notion
of Dharma capitalism Dharma means the
purest form or the essence of something
so dharmic capitalism represents the
purest form of all the possibilities of
capitalism that’s where we want to see
this ultimately evolve to I’d like to
share with you some of my experiences
first as an entrepreneur and the 90s
later as a corporate CEO in the mid
2000s and then as a partner in a global
hedge fund in the late 2000s and finally
today in my current avatar as a partner
in a private equity firm back in the 90s
it was the go-go days of growth I mean
it was just about it was extremely
exciting
you saw the dot-com boom happening
enterprises were in rapid pursuit of
growth and profit
and I was living in New York at that
point I had co-founded and I was a CEO
of a technology integration company we
did a bunch of management consulting at
the higher end working with Fortune
thousand companies and we also then did
some downstream work in terms of
technology integration for enterprises
but something started annoying me
you know we realized that there was this
she is happening and a lot of it was
about fast money to speed speed speed we
started to sense that there was
something missing in terms of some
intangible quality also at that time as
a CEO I was pondering about you know I
had these I should call it a
transnational company we were too small
to be called a multinational company in
a very simple way I started to think
about you know I grew up listening to a
lot of jazz Shakti John McLoughlin
meeting L Shankar and so on and I said
hey how about east meets west and why
don’t we think about profits and people
and this was before you know the notion
of the triple bottom line I’d evolved
and had got documented in just an
intuitive way we said we need to soften
this a little bit and we came up with
this idea of let’s combine the
professionalism of Western organizations
with the empathy that comes out of India
you know almost Corning you would say
but it worked really well because we
realized that while people were hustling
for getting business delivering business
working with high-end clients doing
transformational work there was this
need for them to feel a sense of empathy
at the end of a day’s work and one of
the things we did in the company was we
created a structure and we actually had
people working closely and this is back
in the mid 90s by the mid late 90s we’re
talking about we actually dedicated
resources so that people would have
people to talk to so this is the people
aspect of the quadruple bottom line the
other important dimension to this was
many of many of our employees out of
India came from smaller towns and every
single one of them was impacting 30 more
lives so essentially we were starting to
work with their causes in
in villages and through this process we
were able to have a very natural way of
delivering a social impact as well
through that process so this is back in
the 90s cut to the mid 2000s I was
turnaround CEO of a technology company
again and this was again a very
interesting company we’re doing a bunch
of innovation we were building IP we
were we were investing heavily in domain
knowledge we had lots of bankers in the
team it was a global company again and
here I had I was older I was a little
wiser and I was also thinking about how
do we institutionalize something like
this you know what what happened earlier
was intuitive but this is a much larger
company and we said let’s stand
institutionalize this and I kind of
leaned on my strategic thinking
background and I said hey how about a
strategic framework so we sort of
applied the four-way framework to
thinking about how could we generate a
more sustainable entity so top-down
bottom-up inside-out outside and that’s
the four ways from a top-down
perspective you know I had spent some
time studying the Vedanta so I was
thinking about leadership in the context
of the Vedanta and I came up this notion
of yogi leadership so who’s a yogi you
know we all know about the hatha yoga
and the asanas and so on but essentially
a yogi is someone who’s connected with
his or her higher sense far more aware
of the higher potential that exists
within each person so as the yogi you
start to think about what’s my higher
potential what’s my higher purpose and
you start to try and build that
awareness now it’s crucial for us to
think about leadership like this
especially in that context because what
we wanted to do as a culture is we
wanted to generate the power of
leadership down the organization we
wanted multiple leaders we did not want
a feudal culture in the company where
there was just a bunch of leaders and a
bunch of instruction takers especially
in a complex business environment the
father and people you push the
characteristics of leadership where
people start to examine their own
potential for growth
their own sense of what is possible when
they achieve a higher potential voila
you actually see leadership start to
blossom and develop that creates a very
different sense of dynamic in terms of
both competence people are starting to
do great things they never thought it
was possible because of the fact that
they were thinking more deeply about
this and we had created an environment
to push leadership down so this from a
top-down point of view it’s signaled
that we were committed to building a
wholesome organization where everybody
could participate
everybody could evolve to their
potential from a bottom point of view it
was a lot about culture I mean the big
aspect here was purpose so we started to
build a platform of social engagement
and we realized that everybody has their
own little passion somebody wants to
help with poor people somebody wants to
help with old people somebody wants to
help with education some want to focus
not disabled so we created this
enterprise wide platform to allow people
to express their beliefs in terms of
what they would like to do in terms of
social engagement now suddenly there’s
this other dimension of engagement not
only with the organization but also with
their own higher sense of purpose so
bottom-up dowsers culture right there
was social engagement we empowered
people we said take risks go get
innovation is all in keeping with the
top-down
yoky leadership approach of trying to
fulfill your higher potential inside-out
obviously as a public company we were
listed we had to you know ensure that
our policy practices we had best
practices policy procedures everything
had to make sure that you know we were
kosher in terms of governance at the
same time aligned with the vision of the
company outside in again a very
important facet how do you create a
culture where people have the strength
of character the strength of purpose to
receive feedback it’s a tough world out
there you’re getting beaten by
competition the clients are beating you
up you’re you know if you have a
360-degree assessment process
everybody’s beating you up so the
ability and the strength of character
and purpose to receive feedback and
apply it in a very meaningful way again
helped the process of creating an
evolved organization so here we what
what did we do we essentially take the
profits box obviously we’re public
company the people box as well as
purpose implemented dharmic for a
sustainable approach to an enterprise my
next experience is actually very
different I joined a hedge fund as a
partner in New York and this is a very
interesting hedge fund because what we
were doing is we were building a
platform a software platform to
implement financial economics ideas
systematically systematically meant the
CIO doesn’t make any manual calls the
platform decides it spits out the model
portfolio and you invest and you do a
stock picking based on that obviously
the research guys are extraordinary guys
you know we had like a team of about 15
people from the top schools in the u.s.
mostly PhDs in either financial
economics finance or economics
behavioral finance we combined all these
ideas and you know you probably heard
the word alpha it is all about
generating alpha how do you beat the
market at the same time there was a
there was a degree of churn within the
fund we’re thinking hey is this all you
know we’ve got this amazing platform
we’ve got these at MIT computer
scientists who helped us build this
capability almost like an expert system
in financial economics let’s do
something a little more meaningful so we
brought up this idea of sustainability
investing into a systematic plan so what
did we do now typically sustainability
is standing on three pillars
environmental pillar social pillar and
the governance pillar so you think about
this ESG there’s an ability for us to
look at public companies there’s a lot
of data out there and try and assess
which companies are scoring high on ESG
parameters which companies are scoring
low now we have the job to build a
portfolio that will go long and short on
stocks so we said let’s do this
we’ll take companies that are high on
ESG parameters and we allocate more
money to some companies that are
actually are scoring high the reason is
because we believed the most sustainably
aware an organization is the better they
will do in terms of profits that is a
fundamental belief so you go long
you allocate more money to companies
with high
is G scores on the other side you had
companies with terrible ESG scores
violating environment norms you could
clearly see their no commitment to
social practices governance patchy we
said okay we can do two things with them
one is we can short them or we can
eliminate them from our portfolio so in
a very interesting way and these are
large public companies in America that
we said let’s influence the idea of
sustainability and through the search
fund platform we were able to do this
interestingly at that time Al Gore and a
bunch of people put together a company
called generation capital to demonstrate
to the world that actually you could
attract capital and today when you see
there is a notion called impact
investing it’s come a long way by the
way sustainable investing is actually
traversed impact investing has started
to become fairly mainstream a lot of
allocators of capital now we will say we
want to express our beliefs through our
money so when I invest it’s not of
course I want the profit of course I
want the return but they also know as
very savvy people that the volatility of
their investments and the risk in their
investments is lower when you invest
through an impact framework because I
didn’t you’re investing in companies
that can actually sustain themselves
more meaningfully in the long term so
that was the experience that we had and
we tried to engage so we ticked planet
ESG we take people we take the notion of
profits obviously when it was a hedge
fund purpose not quite there in this
experience so cut to my current
situation where like I said I’m a
partner in a private equity firm our
focus is investing in companies in India
but there’s one passion that binds us
which is how do we how do we change the
businesses that we invest in so our
philosophy is essentially growth capital
so we come in when the company is gone
beyond its survival risk and we look at
sectors that will actually align with
our experience and then we start to
express ourselves in terms of how can
difference beyond that so first point
how do we choose our sectors we
eliminate sectors that pollute we
eliminate sin sectors as they are called
right tobacco alcohol a whole bunch of
other related stuff we eliminate sin
sickness we target sectors on the
positive side that actually have a
positive impact on the environment
so we target clean tech so negatively we
have an approach and we also take a
positive constructive approach from the
standpoint of the people dimension a big
part of what we do is essentially mentor
and engage with the leadership team of
the companies in Weston and what we
really want to nurture is enlightened
leadership here because we really
believe that enlightened leadership
through a mentoring process can unleash
tremendous positive forces through the
enterprise so we actually engage is 360
degrees we go beyond strategy we you
know we help hire people we only get
them to do best practices and the
innovation the whole point is to get
them to go to the next level so from a
people point of view does a tremendous
amount of commitment that we have
through this process and finally in
terms of purpose you know all of us are
doing so many things in terms of
policymaking mentoring beyond our
portfolios and we’re engaging with
various ecosystems directly through the
founders of our companies as well and
through this process we are not only
discovering more purpose for what we do
but we’re also ensuring that people have
the ability to express a higher purpose
for what they do and I think just being
aware of it and engaging in these
concepts with the people that you work
with was a very long way
obviously profits you know we are a
private equity fund we’ve got investors
we have a mandate we have a duty to
investors we got to do that but again
you manage now to really take you know
all four boxes of what we talked about
earlier as the quarter the bottom line
here so friends you know essentially
capitalism has to change from within I
think we all recognize that we have the
think tanks we have the academics we
have the institutions that can give us
research data constructs frame
to trigger our conscience as well as
focus our consciousness but ultimately
it’s up to us to act based on our
beliefs thank you
[Applause]
discourse of how capitalism needs to
change improve evolve we’ve gone from
single bottom line profits to the triple
bottom line of profits planet and people
this triple bottom line has also now
evolved into the quadruple bottom line
of profits planet people and purpose
we’re also seeing the convergence of
ideas such as mindful capitalism
thoughtful capitalism conscious
capitalism social enterprises and so on
in the world of capital where I spend a
lot of my time these days we’ve seen an
evolution of sustainable capitalism
sustainability responsible investing
socially responsible investing the
United Nations in fact has put together
something they call the principles of
responsible investing which is a pretty
deep broad framework with a rating
system fairly detailed which guides how
allocators of capital allocate money the
funds what’s behind all this what’s
driving all this the cycle of excessive
consumption that we have seen over the
last two decades has got to the point if
the 7.5 billion people in the world
consume average American it will take
approximately 5.3 Earth’s to fulfill
that just think about that more recently
we have all experienced the ill effects
of the global financial crisis that
happened in 2007 2008 we all observe the
underbelly the ugliness of what can
happen with capitalism when it goes off
the rails we’ve also seen in in our own
environments personal environments how
individuals have reacted with angst to
what’s happening in the workplace
today there’s a tremendous amount of
stress his impact a well being not to
mention the immense number of scandals
coming out of the corporate world with
executive pay you have some companies
where CEOs are paid hundred x hundred
times the lowest wage in their companies
we’re seeing scandal after scandal in
terms of lobbies that are ensuring that
markets are distorted missing sexual
harassment we’re seeing child labor
missing exploitation of labour in very
poor countries the point here is that
evolution of capital is started to
absorb these changes that are happening
the other big push force is activism
shoulders many of them individual retail
shareholders environmental activists as
well as active boards are starting to
push back as well I’ve called a dharmic
capitalism to me Darmok capitalism
represents an end state perhaps a state
of equilibrium of where capitalism can
get to and will be sustainable Dharma to
me which is where I derived the notion
of Dharma capitalism Dharma means the
purest form or the essence of something
so dharmic capitalism represents the
purest form of all the possibilities of
capitalism that’s where we want to see
this ultimately evolve to I’d like to
share with you some of my experiences
first as an entrepreneur and the 90s
later as a corporate CEO in the mid
2000s and then as a partner in a global
hedge fund in the late 2000s and finally
today in my current avatar as a partner
in a private equity firm back in the 90s
it was the go-go days of growth I mean
it was just about it was extremely
exciting
you saw the dot-com boom happening
enterprises were in rapid pursuit of
growth and profit
and I was living in New York at that
point I had co-founded and I was a CEO
of a technology integration company we
did a bunch of management consulting at
the higher end working with Fortune
thousand companies and we also then did
some downstream work in terms of
technology integration for enterprises
but something started annoying me
you know we realized that there was this
she is happening and a lot of it was
about fast money to speed speed speed we
started to sense that there was
something missing in terms of some
intangible quality also at that time as
a CEO I was pondering about you know I
had these I should call it a
transnational company we were too small
to be called a multinational company in
a very simple way I started to think
about you know I grew up listening to a
lot of jazz Shakti John McLoughlin
meeting L Shankar and so on and I said
hey how about east meets west and why
don’t we think about profits and people
and this was before you know the notion
of the triple bottom line I’d evolved
and had got documented in just an
intuitive way we said we need to soften
this a little bit and we came up with
this idea of let’s combine the
professionalism of Western organizations
with the empathy that comes out of India
you know almost Corning you would say
but it worked really well because we
realized that while people were hustling
for getting business delivering business
working with high-end clients doing
transformational work there was this
need for them to feel a sense of empathy
at the end of a day’s work and one of
the things we did in the company was we
created a structure and we actually had
people working closely and this is back
in the mid 90s by the mid late 90s we’re
talking about we actually dedicated
resources so that people would have
people to talk to so this is the people
aspect of the quadruple bottom line the
other important dimension to this was
many of many of our employees out of
India came from smaller towns and every
single one of them was impacting 30 more
lives so essentially we were starting to
work with their causes in
in villages and through this process we
were able to have a very natural way of
delivering a social impact as well
through that process so this is back in
the 90s cut to the mid 2000s I was
turnaround CEO of a technology company
again and this was again a very
interesting company we’re doing a bunch
of innovation we were building IP we
were we were investing heavily in domain
knowledge we had lots of bankers in the
team it was a global company again and
here I had I was older I was a little
wiser and I was also thinking about how
do we institutionalize something like
this you know what what happened earlier
was intuitive but this is a much larger
company and we said let’s stand
institutionalize this and I kind of
leaned on my strategic thinking
background and I said hey how about a
strategic framework so we sort of
applied the four-way framework to
thinking about how could we generate a
more sustainable entity so top-down
bottom-up inside-out outside and that’s
the four ways from a top-down
perspective you know I had spent some
time studying the Vedanta so I was
thinking about leadership in the context
of the Vedanta and I came up this notion
of yogi leadership so who’s a yogi you
know we all know about the hatha yoga
and the asanas and so on but essentially
a yogi is someone who’s connected with
his or her higher sense far more aware
of the higher potential that exists
within each person so as the yogi you
start to think about what’s my higher
potential what’s my higher purpose and
you start to try and build that
awareness now it’s crucial for us to
think about leadership like this
especially in that context because what
we wanted to do as a culture is we
wanted to generate the power of
leadership down the organization we
wanted multiple leaders we did not want
a feudal culture in the company where
there was just a bunch of leaders and a
bunch of instruction takers especially
in a complex business environment the
father and people you push the
characteristics of leadership where
people start to examine their own
potential for growth
their own sense of what is possible when
they achieve a higher potential voila
you actually see leadership start to
blossom and develop that creates a very
different sense of dynamic in terms of
both competence people are starting to
do great things they never thought it
was possible because of the fact that
they were thinking more deeply about
this and we had created an environment
to push leadership down so this from a
top-down point of view it’s signaled
that we were committed to building a
wholesome organization where everybody
could participate
everybody could evolve to their
potential from a bottom point of view it
was a lot about culture I mean the big
aspect here was purpose so we started to
build a platform of social engagement
and we realized that everybody has their
own little passion somebody wants to
help with poor people somebody wants to
help with old people somebody wants to
help with education some want to focus
not disabled so we created this
enterprise wide platform to allow people
to express their beliefs in terms of
what they would like to do in terms of
social engagement now suddenly there’s
this other dimension of engagement not
only with the organization but also with
their own higher sense of purpose so
bottom-up dowsers culture right there
was social engagement we empowered
people we said take risks go get
innovation is all in keeping with the
top-down
yoky leadership approach of trying to
fulfill your higher potential inside-out
obviously as a public company we were
listed we had to you know ensure that
our policy practices we had best
practices policy procedures everything
had to make sure that you know we were
kosher in terms of governance at the
same time aligned with the vision of the
company outside in again a very
important facet how do you create a
culture where people have the strength
of character the strength of purpose to
receive feedback it’s a tough world out
there you’re getting beaten by
competition the clients are beating you
up you’re you know if you have a
360-degree assessment process
everybody’s beating you up so the
ability and the strength of character
and purpose to receive feedback and
apply it in a very meaningful way again
helped the process of creating an
evolved organization so here we what
what did we do we essentially take the
profits box obviously we’re public
company the people box as well as
purpose implemented dharmic for a
sustainable approach to an enterprise my
next experience is actually very
different I joined a hedge fund as a
partner in New York and this is a very
interesting hedge fund because what we
were doing is we were building a
platform a software platform to
implement financial economics ideas
systematically systematically meant the
CIO doesn’t make any manual calls the
platform decides it spits out the model
portfolio and you invest and you do a
stock picking based on that obviously
the research guys are extraordinary guys
you know we had like a team of about 15
people from the top schools in the u.s.
mostly PhDs in either financial
economics finance or economics
behavioral finance we combined all these
ideas and you know you probably heard
the word alpha it is all about
generating alpha how do you beat the
market at the same time there was a
there was a degree of churn within the
fund we’re thinking hey is this all you
know we’ve got this amazing platform
we’ve got these at MIT computer
scientists who helped us build this
capability almost like an expert system
in financial economics let’s do
something a little more meaningful so we
brought up this idea of sustainability
investing into a systematic plan so what
did we do now typically sustainability
is standing on three pillars
environmental pillar social pillar and
the governance pillar so you think about
this ESG there’s an ability for us to
look at public companies there’s a lot
of data out there and try and assess
which companies are scoring high on ESG
parameters which companies are scoring
low now we have the job to build a
portfolio that will go long and short on
stocks so we said let’s do this
we’ll take companies that are high on
ESG parameters and we allocate more
money to some companies that are
actually are scoring high the reason is
because we believed the most sustainably
aware an organization is the better they
will do in terms of profits that is a
fundamental belief so you go long
you allocate more money to companies
with high
is G scores on the other side you had
companies with terrible ESG scores
violating environment norms you could
clearly see their no commitment to
social practices governance patchy we
said okay we can do two things with them
one is we can short them or we can
eliminate them from our portfolio so in
a very interesting way and these are
large public companies in America that
we said let’s influence the idea of
sustainability and through the search
fund platform we were able to do this
interestingly at that time Al Gore and a
bunch of people put together a company
called generation capital to demonstrate
to the world that actually you could
attract capital and today when you see
there is a notion called impact
investing it’s come a long way by the
way sustainable investing is actually
traversed impact investing has started
to become fairly mainstream a lot of
allocators of capital now we will say we
want to express our beliefs through our
money so when I invest it’s not of
course I want the profit of course I
want the return but they also know as
very savvy people that the volatility of
their investments and the risk in their
investments is lower when you invest
through an impact framework because I
didn’t you’re investing in companies
that can actually sustain themselves
more meaningfully in the long term so
that was the experience that we had and
we tried to engage so we ticked planet
ESG we take people we take the notion of
profits obviously when it was a hedge
fund purpose not quite there in this
experience so cut to my current
situation where like I said I’m a
partner in a private equity firm our
focus is investing in companies in India
but there’s one passion that binds us
which is how do we how do we change the
businesses that we invest in so our
philosophy is essentially growth capital
so we come in when the company is gone
beyond its survival risk and we look at
sectors that will actually align with
our experience and then we start to
express ourselves in terms of how can
difference beyond that so first point
how do we choose our sectors we
eliminate sectors that pollute we
eliminate sin sectors as they are called
right tobacco alcohol a whole bunch of
other related stuff we eliminate sin
sickness we target sectors on the
positive side that actually have a
positive impact on the environment
so we target clean tech so negatively we
have an approach and we also take a
positive constructive approach from the
standpoint of the people dimension a big
part of what we do is essentially mentor
and engage with the leadership team of
the companies in Weston and what we
really want to nurture is enlightened
leadership here because we really
believe that enlightened leadership
through a mentoring process can unleash
tremendous positive forces through the
enterprise so we actually engage is 360
degrees we go beyond strategy we you
know we help hire people we only get
them to do best practices and the
innovation the whole point is to get
them to go to the next level so from a
people point of view does a tremendous
amount of commitment that we have
through this process and finally in
terms of purpose you know all of us are
doing so many things in terms of
policymaking mentoring beyond our
portfolios and we’re engaging with
various ecosystems directly through the
founders of our companies as well and
through this process we are not only
discovering more purpose for what we do
but we’re also ensuring that people have
the ability to express a higher purpose
for what they do and I think just being
aware of it and engaging in these
concepts with the people that you work
with was a very long way
obviously profits you know we are a
private equity fund we’ve got investors
we have a mandate we have a duty to
investors we got to do that but again
you manage now to really take you know
all four boxes of what we talked about
earlier as the quarter the bottom line
here so friends you know essentially
capitalism has to change from within I
think we all recognize that we have the
think tanks we have the academics we
have the institutions that can give us
research data constructs frame
to trigger our conscience as well as
focus our consciousness but ultimately
it’s up to us to act based on our
beliefs thank you
[Applause]
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