In the ESG fund universe, we have SBI Magnum Equity ESG and Quantum India ESG Equity. Axis ESG is newly launched and ICICI Prudential will soon come out with their offering.
These funds look to invest into companies that score higher on ESG parameters.
The Morningstar Sustainability Rating™ for funds allows investors to understand how the companies in their portfolios are managing their Environmental, Social, and Governance – or ESG – risks relative to their peers.
This rating is built to enable advisers and investors to directly compare companies across industries, and a refined design aims to make it easier to use as they make investment decisions.
Quantum ESG has a 5 Globe rating, which means its portfolio scores the best on ESG parameters amongst its peers. SBI Magnum Equity ESG has a 3 Globe rating.
You can read more on Morningstar's rating methodology here.
Morningstar India's head of fund research, Kaustubh Belapurkar, is certain that ESG will gain traction in India. "While currently still in a nascent stage, ESG investing is popular globally, especially in Europe where investors are fairly cognizant of its benefits."
Here is related reading on ESG in India:
ESG funds gain traction in India
Subramaniam of Quantum Mutual Fund shares the various factors and filters they look at when selecting stocks for this portfolio.
What Indian investors need to know about ESG
While there is a paucity of funds which intentionally pursue sustainable investment strategies, investors and advisers could still incorporate ESG into their investment process by other means.
India and the ESG challenge
Nine of the 10 most-polluted cities in the world are Indian. We are also among the top three nations when it comes to air pollution–related deaths. But the air quality is only one aspect of our climate change dilemma. Cities like Mumbai and Chennai are at risk from rising sea levels.
3 approaches to sustainable investing
ESG, SRI and impact investing are terms often used interchangeably to describe this space that is driving a lot of interest at the moment. And all these terms mean different things to different people.
6 myths of sustainable investing
It is not just negative screening. It is not all about values. Here is what encompasses ESG investing.
Measuring impact
In the ESG era, how do we measure net impact? By using the Upright Project model, investors can not only measure the full impact of their assets, but also determine what they can invest in to meet specific sustainability goals and client needs.
Does investing drive change?
Virtually all sustainable funds today are focused on integrating the consideration of environmental, social, and corporate governance issues in the investment process rather than just flatly avoiding so-called irresponsible companies.
