"ESG investments are on the rise in the financial industry," says Archana Elapavuluri of Pickright Technologies (2024)

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Speaking with the TechGraph, Archana Elapavuluri, Co-Founder of Pickright Technologies said, “The financial industry has witnessed a significant surge in ESG investments in recent years.”

Read the complete interview:

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TechGraph: Could you help give a sense of how far PickRight has come since its existence? From when it began to where it is now?

Archana Elapavuluri: PickRight is a 2019 fintech marketplace platform for stock market investors and advisers. Its goal is to make investing easier and offer sensible wealth management for everyone. The platform alerts investors to maximize their investments and remain vigilant during downturns. Edelweiss Wealth Management (Nuvama) bought PickRight on March 21, 2023.

TechGraph: How is PickRight utilizing its sectoral expertise and digitalization to solve the unsolved gap in the investment space?

Archana Elapavuluri: We help millennials plan and diversify their investments with AI-powered software. We are a wealth tech platform for digital natives that intelligently saves and invests across asset classes with AI and ML-powered deep customization.

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We use AI and ML to create robust and diverse portfolios for each user based on their profile and enable them to invest across asset classes monthly.

We use contemporary AI to track and monitor stock activity in real-time, providing investors with full freedom to choose their advisors via a dynamic ranking scoreboard.

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TechGraph: Talking about the core business, what is the AUM growth that you are targeting for FY 23–24?

Archana Elapavuluri: We anticipate growth in AUM that is at least 10 times greater than what it is at the moment.

TechGraph: Could you shed more insight on Investpacks?

Archana Elapavuluri: Investpacks is an exclusive product offering from PickRight allows investors to invest in a pre-defined basket of stocks based on a specific theme or strategy.

The product is designed to provide investors an easy way to diversify their portfolios and capitalize on market trends. PickRight’s Investpacks are multi-asset portfolios managed and monitored by AI and professionals to maximize returns.

These portfolios invest in ETFs, mutual funds, stocks, gold, etc. Throughout the stock market. PickRight provides theme-based Investpacks for women, students, and retirees, among other financial solutions.

TechGraph: With technology adoption in the stock market and financing sector speeding up. How is PickRight leveraging technology to enhance the investor’s investment experience?

Archana Elapavuluri: PickRight is a digital investment advisory service that combines artificial intelligence and human expertise to create customized stock portfolios. It provides timely notifications for investors to optimize their investments and be ready for market downturns.

PickRight constantly monitors investment basket performance and utilizes innovative technologies to assist with portfolio rebalancing according to market fluctuations. By leveraging technology, PickRight aims to enhance the overall investor experience.

PickRight leverages advanced technologies like AI and machine learning to enhance investor experience. Through its platform, PickRight employs cutting-edge AI to monitor and analyze the real-time behavior of stocks, enabling investors to receive expert advice on investment decisions.

Emerging trends in the investment landscape involve a rising inclination towards sustainable and socially conscious investing, a heightened desire for alternative investment options like private equity and hedge funds, and an increased emphasis on passive investing through index funds and exchange-traded funds (ETFs).

TechGraph: What are the new investment trends?

Archana Elapavuluri: Investment trends include sustainable and socially responsible practices. In addition, there is a surge in demand for alternative investment options like private equity and hedge funds. Additionally, there is a significant shift towards passive investing through index funds and ETFs, where fund managers have limited discretion.

The advent of the technological revolution has greatly propelled artificial intelligence (AI). Passive investing has gained widespread popularity as it eliminates active fund management.

The financial industry has witnessed a significant surge in ESG (environmental, social, and governance) investments in recent years. Experts predict that by 2025, megatrends such as AI, energy storage, robotics, genome sequencing, and blockchain technology will shape the investment landscape.

TechGraph: How is technology, namely AI and machine learning, redefining the way we make investments in derivatives in the new normal?

Archana Elapavuluri: The investment landscape is transforming artificial intelligence and machine learning. These technologies empower traders to make data-based decisions in real-time, resulting in more precise predictions and improved risk management approaches. As a result, derivatives trading has become more streamlined and available, enabling investors to seize market opportunities more effortlessly.

AI and machine learning is revolutionizing the approach to derivatives investments in the current era by offering investors immediate access to valuable information and thorough data analysis. This equips investors with enhanced decision-making capabilities and the ability to take advantage of emerging market patterns.

TechGraph: What is your position when it comes to liquidity?

Archana Elapavuluri: To maintain a healthy portfolio, we diversify our investments across various industries and sectors, with a particular emphasis on highly liquid companies with a market capitalization of at least Rs 5,000 crore.

When it comes to asset allocation, considering the current situation, the allocation to cash typically ranges from 20% to 30%, depending on the investor’s risk tolerance.

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"ESG investments are on the rise in the financial industry," says Archana Elapavuluri of Pickright Technologies (2024)

FAQs

What has caused the rise of ESG? ›

One of the primary drivers of ESG investing's growth is the heightened awareness of global sustainability challenges, such as climate change, social inequality, and corporate governance issues.

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Why is ESG investing increasing? ›

Investors increasingly believe companies that perform well on ESG are less risky, better positioned for the long term and better prepared for uncertainty. Companies that realign to the stakeholder capitalism agenda may have a competitive advantage over those that try to return to business as usual.

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What does ESG mean in investing? ›

ESG stands for environment, social and governance. ESG investors aim to buy the shares of companies that have demonstrated a willingness to improve their performance in these three areas.

What is the role of technology in ESG investing? ›

Digital technologies are already being used to improve efficiency, reduce waste and provide less carbon-intensive means of environmental management. ESG frameworks, in turn, can help organizations apply a broader approach to sustainability and highlight the potential risks in applying new digital technologies.

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Why are people against ESG investing? ›

Critics of ESG — such as a group of Republican states that banned Blackrock and other “ESG friendly” asset managers from their state pension plans — argue that considering environmental and social factors violates the fiduciary duty that asset managers have towards their clients.

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Why did ESG fail? ›

The ESG movement, originally driven by good intentions, has been co-opted by lobbyists, special interest groups and various NGOs, and recent reviews have revealed its lackluster performance in creating meaningful environmental change and have highlighted chronic abuse of flawed methodologies.

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Is ESG causing inflation? ›

Though there are ongoing academic and policy debates about the relative influence of these causes and the degree to which they feed into each other, there is precious little economic evidence to suggest that corporate and investor-led ESG strategies have been a major factor driving inflation at this point in time.

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What is driving the rise in ESG? ›

The primary driver of the growing focus on ESG is access to information. The proliferation of 24-hour news channels, the internet and social media mean that the public has an extraordinary amount of information available at its fingertips.

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Is it good to invest in ESG? ›

ESG investing benefits include: Sustainable investing can have a positive impact on the world. Sustainable investing can deliver equal or, in some cases, superior investment returns when compared to traditional investing. 45.

Who owns BlackRock? ›

BlackRock is publicly owned, with its shares held by various shareholders, including institutional investors like Vanguard Group and State Street Corporation and individual shareholders. The specifics of these shareholders can change over time.

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What are the disadvantages of ESG? ›

One of the main disadvantages of ESG criteria is that companies are not required to disclose all information related to their sustainability practices. This can make it difficult for investors to evaluate the sustainability and ethical impact of investments.

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What are the disadvantages of ESG investing? ›

However, there are also some cons to ESG investing. First, ESG funds may carry higher-than-average expense ratios. This is because ESG investing requires more research and due diligence, which can be costly. Second, ESG investing can be subjective.

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Who started ESG? ›

A 2004 report from the United Nations – titled Who Cares Wins – carried what is widely considered the first mainstream mention of ESG in the modern context. This report leaned in heavily, encouraging all business stakeholders to embrace ESG long-term.

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What is ESG in simple words? ›

ESG means using Environmental, Social and Governance factors to assess the sustainability of companies and countries. These three factors are seen as best embodying the three major challenges facing corporations and wider society, now encompassing climate change, human rights and adherence to laws.

Does BlackRock support ESG? ›

BlackRock's offering of mostly index-tracking ESG funds posted inflows. Investors poured about $75 billion into private renewable-energy and broad energy-sector investment funds over the same period.

Why has ESG become mainstream? ›

The ESG industry helps highlight companies that may be riskier than traditional investing guidelines alone might suggest. Using an ESG lens could help investors find better, more profitable opportunities.

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When did ESG gain popularity? ›

In the '60s, ESG became much more mainstream, around the same time as the evolution of the mutual fund industry, the civil rights movement, and the protesting and boycotting of companies involved in or in support of the Vietnam War.

What are the factors affecting ESG? ›

Key ESG Factors

Environmental. Conservation of the natural world. - Climate change and carbon emissions. - Air and water pollution. ...
Social. Consideration of people & relationships. - Customer satisfaction. - Data protection and privacy. ...
Governance. Standards for running a company. - Board composition. - Audit committee structure.

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