EXAM NUMBER: B036712
TO BE SUBMITTED ON: 19/11/2012 16:00
Case Study: Generation Investment Management
The ABB India Investment Decision
“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 view risk and return through the prism of environmental, social, governance and ethical factors, which succeed in persuading potential investors and generates a solid competitive advantage for the firm. A potential investment consideration for Generation is ABB India; a market leader in power and automation, offering solutions for efficiency in power generation, electrical transmission and increased productivity. These values tie in consistently with Generation’s mission and vision. Furthermore, the company have a strong financial position with a healthy angle to capitalise on future growth trends, have a disciplined management and a strong track record. However, the presented problem is one where ABB India, even with its advantageous position in the Indian market, is ultimately emitting large quantities of CO2 emissions through its use of coal and therefore not complying exactly with Generation’s company values. This splits Generation into two frames of mind; the investment could promote a more stable economy and relieve growth in poverty but without being unaccountable for an increase in coal-fired energy generation – the prime cause for global warming. Presented Arguments
India’s demand for energy is rapidly increasing, and...