Investing With Purpose: Unlocking The Potential Of ESG Investing

The purpose of every investment has to be the returns garnered, irrespective of its timeframe. But for today’s responsible investors, certain environmental, social and governance parameters are critical to park their funds. Vardan Pandhare underscores the practice of investing with purpose in this special report

- Vardan Pandhare

In the realm of contemporary investing, conscientious investors are actively seeking out companies that prioritise sustainability as a core principle. They have a strong desire to comprehend the diverse facets that contribute to the stability and enduring success of the companies they choose to invest in. There is a growing demand for businesses that possess the ability to withstand the profound impacts of any crisis and consistently integrate environmental, social and governance (ESG) factors into their day-to-day functioning.

In fact, ESG investing is gaining significant traction on a global scale and India is also witnessing a surge in awareness and interest regarding sustainable and responsible investment practices. Presently, there are about 12 mutual fund schemes in India that are centred on the theme of ESG. In this special report, we will delve into a detailed exploration of ESG funds investing and provide valuable insights into what investors should know about this innovative investment format.

Development of ESG Investing

The evolution of ESG investing can be traced back to the 1960s when it was initially known as socially responsible investing. At that time, investors began avoiding investments in stocks or industries associated with activities such as tobacco production or supporting the South African apartheid regime. Although ESG investing is still in its early stages for Indian investors, the global landscape offers a wide array of nearly 3,000 ESG schemes for investment. In recent years, a range of sustainability challenges has emerged, including flood risks, rising sea levels, privacy threats, data security issues, demographic shifts, regulatory changes, and more.