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. Clearly, everyone wants in on the pandemic-fuelled responsible investing boom. 

However, that’s barely a drop in the bucket when you look at global trends. Assets in sustainable funds globally rose 50% to $1.7 trillion $1.7 trillion Financial Times ESG funds defy havoc to ratchet huge inflows Read more in 2020, according to data provider Morningstar. And given that India’s is still more than twice as much as a year ago, interest in ESG funds in India is undoubtedly tracking the global trend.

You’d be forgiven for thinking that by choosing ESG funds, you’re putting money in a bunch of clean power producers, electric vehicle companies, and lithium-ion battery makers. Things are a lot more complicated than that, especially if you’re in India. 

The glaring disparity between India and the global trends can be attributed to choice. Or the lack of it.

Funds in the US and Europe can choose from publicly listed cleantech companies, such as American EV maker Tesla. “US and Europe have a wider range of companies,” says Ruchit Mehta, who manages SBI Magnum Equity ESG Fund, the oldest and largest of Indian sustainable funds. “ESG funds there have the ability to distinguish themselves.” 

And environmental factors, while just one-third of ESG investing, have put wind in the sails of responsible investing during the pandemic. “Everyone looks at governance and social factors. But some of the biggest risks are going to be around companies’ carbon footprint,” says Abhay Laijawala, managing director of Avendus Capital Public Markets Alternate Strategies. Avendus runs an ESG PMS PMS PMS Portfolio management services, targeted at institutions or high net-worth individuals, offer an investment portfolio of stocks, fixed income, debt, and structured products fund. 

The looming climate risk was the focus of the recent annual letter letter BlackRock Larry Fink's 2021 letter to CEOs Read more  from Larry Fink, the chief of BlackRock, the world’s biggest asset manager, to business leaders.

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.

View Full Profile

Available exclusively to subscribers of The Ken India

This story is a part of The Ken India edition. Subscribe. Questions?

MOST POPULAR

Annual Subscription

12-month access to 200+ stories, archive of 800+ stories from our India edition. Plus our premium newsletters, Beyond The First Order and The Nutgraf worth Rs. 99/month or $2/month each for free.

Rs. 2,750

Subscribe
 

Single Story

Instant access to this story for a year along with comment privileges.

Rs. 500

Subscribe
MOST POPULAR

Annual Subscription

12-month access to 150+ stories from Southeast Asia.

$ 120

Subscribe
 

Single Story

Instant access to this story for a year along with comment privileges.

$ 20

Subscribe

Questions?

What is The Ken?

The Ken is a subscription-only business journalism website and app that provides coverage across two editions - India and Southeast Asia.

What kind of stories do you write?

We publish sharp, original and reported stories on technology, business and healthcare. Our stories are forward-looking, analytical and directional — supported by data, visualisations and infographics.

We use language and narrative that is accessible to even lay readers. And we optimise for quality over quantity, every single time.

What do I get if I subscribe?

For subscribers of the India edition, we publish a new story every weekday, a premium daily newsletter, Beyond The First Order and a weekly newsletter - The Nutgraf.

For subscribers of the Southeast Asia edition, we publish a new story three days a week and a weekly newsletter, Strait Up.

The annual subscription will get you complete, exclusive access to our archive of previously published stories for your edition, along with access to our subscriber-only mobile apps, our premium comment sections, our newsletter archives and several other gifts and benefits.

Do I need to pay separately for your premium newsletters?

Nope. Paid, premium subscribers of The Ken get our newsletters delivered for free.

Does a subscription to the India edition grant me access to Southeast Asia stories? Or vice-versa?

Afraid not. Each edition is separate with its own subscription plan. The India edition publishes stories focused on India. The Southeast Asia edition is focused on Southeast Asia. We may occasionally cross-publish stories from one edition to the other.

Do you offer an all-access joint subscription for both editions?

Not yet. If you’d like to access both editions, you’ll have to purchase two subscriptions separately - one for India and the other for Southeast Asia.

Do you offer any discounts?

No. We have a zero discounts policy.

Is there a free trial I can opt for?

We don’t offer any trials, but you can sign up for a free account which will give you access to the weekly free story, our archive of free stories and summaries of the paid stories. You can stay on the free account as long as you’d like.

Do you offer refunds?

We allow you to sample our journalism for free before signing up, and after you do, we stand by its quality. But we do not offer refunds.

I am facing some trouble purchasing a subscription. What can I do?

Please write to us at support@the-ken.com detailing the error or queries.