ESG Investing Is Fast Gaining Traction in India
By Prateek Pant
The trend of sustainable investing by incorporating environmental, social and governance (ESG) factors is gaining traction in India. There are as many as 10 exclusive ESG-focu-sed funds (six were launched in FY21). Globally, the assets under management of funds incorporating ESG principles is more than $30 trillion. In that context, it is still early stages for India, but there is a clear line of sight for ESG-focused investing to accelerate, spurred by regulatory thrust and favourable demographics. From the standpoint of companies too, ESG adoption has moved from being a risk-mitigating tool to a core strategic priority.
India has an active regulatory and reporting framework for ESG. Implementation of the Kotak committee recommendations and Sebi-mandated ESG disclosure norms for the top 1,000 listed entities, disclosure and accountability norms have been significantly tightened. From a social perspective too, the government’s focus on digital transformation will act as a catalyst in creating equitable and inclusive business models.