The Rise of ESG Mutual Funds in India: A Comprehensive Overview

In recent years, there has been a growing awareness among consumers about environmental issues, and this trend is also reflected in the mutual funds segment. Sustainable investing has gained popularity in India, with ESG (Environmental, Social, and Governance) funds attracting increasing interest. So, what exactly are ESG funds, how do they operate, and should you consider investing in them? Let’s delve into it. Understanding ESG Mutual Funds ESG mutual funds are similar to other mutual funds, but they specifically invest in companies that prioritize environmental protection, social responsibility, and good governance practices. By investing in these funds, you can support environmentally friendly, socially conscious, and well-managed businesses while aiming for positive impact alongside financial returns. For instance, Tata Consultancy Services (TCS) focuses on energy efficiency and community welfare. Infosys is known for its sustainability initiatives and green buildings, while Wipro invests in renewable energy and social programs. These companies are often included in ESG mutual fund portfolios. Types of ESG Mutual Funds Here are some of the commonly available types of ESG mutual funds: • Environmental funds: These funds concentrate on companies with strong environmental practices, such as renewable energy or waste management. • Social funds: These funds invest in businesses that prioritize social issues, such as employee welfare, community development, or diversity. • Governance funds: These funds target firms with robust corporate governance, transparent management, and ethical practices.