For nearly 800 years, the Muthoot family have been heavily involved in business and philanthropy in and around Kerala, India. Since its formal establishment in 1887, the Muthoot Group has grown into multi-layered conglomerate focussing on financial services, healthcare, agriculture, housing, media, education and more.
Now, under the guidance of 19th-generation family member George Muthoot George, the Muthoot Group is making big waves in sustainable tourism with the establishment of Xandari, a unique hospitality brand based in India and Costa Rica, while also looking inwardly at how best to employ Corporate Social Responsibility (CSR) standards across the whole company.
Ahead of chairing Campden Family Connect’s 8th Indian Families In Business Forum in Mumbai on April 18, George Muthoot George talks about living up to family legacy, a passion for hospitality and the ultimate motivation for sustainable investment…
The subjects of succession, Next-Gen voices and multi-generational family business loom large at The 8th Indian Families In Business Forum on April 18. As Chairperson and Deputy Managing Director for Muthoot Group, what are you hoping to get out of the forum?
I would primarily like to understand how Next Gens have been handling the legacy of previous generations and also how they manage to grow the business.
Also, how decisions are taken in the boardroom, specifically with the family more than the professional board in mind? How much do they encourage entrepreneurship in the family? And how do they ensure that family members stay within the family business circle?
The theme of The 8th Indian Families In Business Forum is ‘Unlocking Potential, Accelerating Growth’. As a 19th-generation family member and 4th-generation entrepreneur, does that topic chime with your own experience of joining and developing your family business?
In the 800 years of our recorded family legacy, we’ve learned that the business doesn't always remain the same. If you look at the present business, which was incorporated in 1887, there has been transformation, primarily from trading into banking and financial services. Today, the company has diversified into other areas, including healthcare, education, hospitality and real-estate developments. We've been able to diversify primarily because we've encouraged members of the family to pursue their passions. We’re not just interested in growing the traditional business, but also seeing where we could diversify our base into other businesses as well. At the end of the day, it's important that a family member guides and takes things forward. What’s most important is the values and the ethics, it's not just about growth alone.
“I still feel we've only touched the tip of the [CSR] iceberg and I would like to see more of this done right across the entire company.”
You completed your bachelor’s degree in hospitality management, your Master’s in international hospitality management and were later awarded the Distinguished Alumni Award by your alma mater and the ITC Travel Group Chairman’s Award for your contribution to the field of sustainable tourism. Where would you say this passion for sustainability comes from?
I was always passionate about the hospitality industry and, from a very early age, I was very clear where my path would take me… And it was not in banking and financial services!
A professor at IMHI Essec Cornell University was teaching sustainable tourism, that's when I discovered this was the reason I joined hospitality… To make a difference.
Nothing broadens the horizons like travel, so I believe it’s important for people to experience, but they need to do so in a sustainable manner. Hospitality is not just about rooms, food or experience, I always tell my team that our line of work is to create great memories.
So how we go about it? It depends on how we want to contribute back to the local economy and not just in terms of employing local people. It’s about how sustainable the destination is and how we contribute back. In every location, we promote sustainability as much as possible - and I don't mean by greenwashing!
Sustainable practice is at the core of what we do. It’s something I’m very passionate about.
Would you say that, because of that passion, sustainability is now a cornerstone of the Muthoot Group as a whole?
Oh, yes. Within the group, I handle all aspects of CSR and have done for more than a decade. In India, it is mandatory for companies of a certain size, whether listed or unlisted, to spend about 2% of their net profits on CSR or social responsibility efforts. This gives me an opportunity, because the group is actually spread across the country, to explore sustainability opportunities.
We don't have a revenue target, we have a spend target. So whatever money the company makes, they give us 2% and we have a yearly target in which we have to spend ‘X’ amount of millions of dollars.
As a result, you just want to go out there and spend, spend, spend. But, as I travelled across India and because we do CSR right across the spectrum of all the states, I realised that the needs are many. So I started reengineering the CSR department primarily to understand that whatever efforts we do should be more of a sustainable nature and on a grassroots level, rather than just trying to CSR superficially.
We broadly divided into education, healthcare and environment, because these are the three keys areas from which all other problems can begin to be solved.
Trying to get that right is very important. I still feel we've only touched the tip of the iceberg and I would like to see more of this done right across the entire company.
“I'm filled with hope that it's not the Googles, Apples or Amazons of this world that are going to bring about real change but innovations that are coming in continents like Africa and Asia.”
Campden Wealth’s 2022 Asia Pacific Family Office Reportfound there is an increased interest in sustainable investing. 42% of those surveyed now invest sustainably, an increase of 4% on last year and 2% higher than the global average. This percentage is expected to increase to 50% over the next five years. In your opinion is the message about climate change finally getting through or is there simply more investment interest in that space now?
Let's put it this way, the ultimate motivation is to grow, to invest and make more money, whether it's sustainable businesses or not. I have my personal doubts, whether these investments are being made with the right point of view.
I think they're largely driven by investments that would give them good returns. The sustainable angle sounds good, but I doubt if that's the sole motivation for these investments, especially if they're not for the long term.
I believe that many family businesses that invest and create sustainable companies do so for the long term. But there's always these silly things that they call ‘exit options’, so I treat all of this with a little bit of scepticism.
Everybody wants to talk sustainability, it looks good on the balance sheet, it looks good on the company report, but I'm not sure if that's what I would call a positive move towards proper sustainability.
Sustainable investing within the family office / business space is thought to have been driven by Next Gens. Is this generation the one to make the changes that are so urgently needed?
It depends on what part of the world you’re in. I wouldn’t say everybody is on the same level, because you have family businesses that are in stable economies that can now afford to think about sustainable investing. But then you also have family businesses that are in economies that are not so stable and you have a next generation that has a responsibility to ensure that the family business continues to progress - they have their own baggage and they don't want to fail at it.
For many families around the world, they would love to contribute to the fight against but, unfortunately, the instability that they face, not just in their businesses but also in their own countries, means their priorities keep changing.
To think that we are all on the same level playing field thinking about global warming would be living in a fool's paradise.
As part of the CSR activity driven by George Muthoot George, Muthoot Finance has launched the Cup Of Life campaign in Kochi, Kerala, India. The programme, aimed at eradicating menstrual taboos, achieved a Guinness World Record for distribution of the most number of menstrual cups in 24 hours.
For 65% of Asia-Pacific offices, engagement with sustainability also provides an opportunity to investigate new sectors, industries and technologies which could be the source of attractive investments in the future. Will this business approach to sustainability lead to more innovation in the future?
Yes, I believe so. I think these investments, if done in the right manner, will make a big change in how we do business, how we interact with each other and how the world moves ahead.
While people are talking about doomsday and what's happening to the world because of climate change, I see beautiful opportunities.
It doesn't have to even come from high-end technology. I see grassroots-level people bringing together innovative ideas on how to do great things - creating water out of air in Sub-Saharan Africa, for example.
I'm filled with hope that it's not the Googles, Apples or Amazons of this world that are going to bring about real change, but innovations that are coming from continents like Africa and Asia. The unfortunate thing is that many people from these parts of the world are not the guys in suits who can get investment when they want it.
I believe that funding those grassroots businesses is more important because that innovative technology is what we need to make the impact right now on the ground level. It's not in the boardrooms that change will be made and it's not about how much money the company will make each quarter. The real impact will come from frugal innovation and that is what we should be investing in.
For more information on Campden Family Connect’s 8th Indian Families In Business Forum in Mumbai on April 18, click here.