Sustainable investing is finally hot in India. But it’s not what you think

With six of India’s nine ESG funds launched since October, sustainability is becoming harder to ignore for fund managers and companies. But it’s not quite the same concept it is in Europe and the US

Riding the pandemic-fuelled global boom, sustainable funds in India have seen their assets more than double in a year to $1.3 billion

But Indian funds have to grapple with the paucity of cleantech and internet stocks, which their US peers are big on

Indian ESG funds do not yet avoid environmentally unfriendly businesses like oil and cement

Their choice of sectors aside, India’s top 1,000 companies will get a leg-up from Sebi’s new ESG disclosure norms

Six new funds launched in five months. That’s the speed at which India’s sustainable investing bandwagon is moving.

Till October 2020, India had just three ESG (environmental, social, and governance) funds. ICICI Prudential Mutual Fund launched its sustainable offering the same month; by February 2021, American investment management firm Invesco’s ESG fund had become the sixth new fund to be launched since then. Some of the other entrants also include Kotak ESG Opportunities Fund and Aditya Birla Sun Life ESG Fund.

With that, India’s assets in sustainable funds stood at Rs 9,670 crore ($1.3 billion) as of February.

AUTHOR

Seetharaman G

Starting out as a business journalist in 2008, Seetharaman has written about energy, climate change, retail, banking, and technology. He has worked with Business Today, a fortnightly, and the Sunday edition of The Economic Times.

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