Aditya Birla group to invest in green energy as rivals make commitments

'Thin line between hustle and hubris', Kumar Mangalam Birla warns upcoming companies in blog post

The Aditya Birla Group will make investments in green energy, joining conglomerates like Tatas, Adani Group and Reliance Industries that have announced multi-billion dollar commitments.

Kumar Mangalam Birla, chairman of Aditya Birla Group, said in a blog post his group companies are making investments in green energy, the circular economy and sustainable materials. “The pendulum of climate change will swing globally when we can find technology led solutions to marry the material aspirations of current generations with responsibility towards the lives of future generations. And nowhere is that truer than in rapidly emerging countries like India,” Birla said without elaborating on any investment figures in the green energy business.

The Tata group is investing Rs 77,000 crore in green energy and Reliance has announced Rs 75,000 crore in the next three years for the sector. The Adani Group has announced $70 billion for green energy in the next 10 years.

Birla said the climate and sustainability will be the defining challenges of the century. “While the short-term flight from natural gas has been to coal, broader efforts to clean energy transition are now truly underway. Governments and large corporations globally finally see a confluence between what is virtuous and financially prudent. And this convergence will drive a multi-decade transition,” Birla said.

“As a nation, we aim to generate 50 per cent of our power requirements from renewable energy sources or put another way, have 500 GW of non-fossil fuel based capacity by 2030. India is walking the talk as is evident from its pioneering leadership of the International Solar Alliance.”

“The availability of capital, coupled with young talent brimming with ideas, has meant that we have been witness to a unique explosion of new business building. There is much to be celebrated and learnt from the raw energy and hustle of many of these new ventures in the start-up ecosystem. At the same time, it’s also increasingly clear that there is a thin line between hustle and hubris. To manage this balance well, it is important to build great teams and be unafraid to bring in new talent,” Birla said.

“The single biggest difference between many successful firms and others is not the novelty of ideas, or even the uniqueness of their technology, but a team that can harness the best solutions available.”

Companies should create a culture of values, where actions matter more than slogans. “‘Unfortunately, there have been too many examples recently of teams that have embraced shortcuts. Where compromises have been made in the interest of growth. And where alarms are set off too late. Build for the long haul,” he said.

Birla said companies must make big bets based on their fundamental strengths like better unit economics, scale, network, and speed. “If you do not continuously reshape the terms of the industry based on these big bets, someone else definitely will be playing theirs,” he said.

“There is still value to investing in building a view to core metrics—operating profits, gross margins, and cash flows. These terms have enduring resonance across business cycles.”

On global companies focusing on China+1 strategy Birla said India has become a clear choice of investment. “A decadal reshaping of supply chains is underway. As global corporations start to look at countries across Asia as part of their China+1 strategies, India is a clear choice,” he said.