Generation Investment Management Essay

1032 Words Dec 16th, 2012 5 Pages
Current Debates in International Business and Emerging Markets
Individual Assignment
EXAM NUMBER: B036712
TO BE SUBMITTED ON: 19/11/2012 16:00
MEHDI SAFAVI
CMSE11136

Case Study: Generation Investment Management
The ABB India Investment Decision
The Dilemma
“So if Generation invests in ABB India, we’re providing capital for a company that builds up the infrastructure for more coal fired energy generation. This means we’ll be co-accountable for more CO2 emissions, the main cause for global warming!”
Generation Investment Management (‘Generation’) mission and values are to deliver first-class investment performance using a long-term view and integrating sustainability research within a solid equity analysis framework. The company
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This in itself is an attractive factor for any company thinking about investment, and specifically presenting an opportunity in competing where there are only a “few global players” makes it also a favourable confirmation of a sound rate of return. Furthermore, ABB India enforces a corporate culture of commitment regarding CSR issues; “contributing to economic progress, environmental stewardship and sustainable development” (Exhibit 8). These company values tied in with a vast market share could enable ABB India in using their power for the facilitation of poverty relief, improving the quality of life for the rural population.
Admittedly, less than half of the Indian households have access to electricity (45%) as well as being saturated with power deficits (in 2007 Base Demand Deficit was; 9.6%, and the Peak Shortage; 13.8%), (Exhibit 7). However, governmental plans to invest $250 billion upgrading power generation, transmission and distribution (T&D) infrastructure are to commence by 2012. This would alleviate its current inadequate T&D infrastructure in turn assisting the progress of industrial and economic growth. Furthermore, the persistence of economic growth combined with an outdated electrical grid, where out of 100 units of power only 55 units are billed to consumers exaggerates the need for strong policy support as well as a company who has access to robust technologies as well as being in positive alignment with national interests (Exhibit 9), such as

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