ESG Mutual Fund : Investments are typically made with the goal of profit, but some investors consider not only profits but also the company’s environmental, social, and governance values. These three aspects—environmental, social, and governance—are collectively referred to as ESG. Mutual funds that invest in such companies are called ESG funds.
What are ESG funds?
ESG funds are mutual funds that invest in companies with a proven track record regarding the environment, society, and corporate governance.
Environmental: The company’s impact on the environment and its sustainability policies. If the company prioritizes the environment in its decisions, it scores higher in this category.
Social: How the company behaves towards its employees, customers, society and community.
Governance: How the company’s leadership, internal controls, transparency, shareholder rights, and top management accountability are.
Popular ESG Funds in India
Some of the popular ESG funds launched by several leading AMCs in India are:
Aditya Birla Sun Life ESG Integration Strategy Fund
Invesco India ESG Integration Strategy Fund
Kotak ESG Exclusionary Strategy Fund
Quantum ESG Best in Class Strategy Fund
Mirae Asset Nifty 100 ESG Sector Leaders Fund of Funds
ICICI Prudential ESG Exclusionary Strategy Fund
Key reasons to invest in ESG funds
A. Matching personal values: Many investors choose ESG funds because they align with their ethical and social values.
B. Risk aversion: ESG companies are generally less exposed to the risk of notoriety caused by scandals or violations of regulations.
C. Growth potential: Such companies are considered to have better growth potential in the long term due to good governance and responsible operations.
D. Long-term sustainability: ESG companies are considered more prepared for future challenges such as technological change, employee needs, customer demands, and innovation.
How to invest in ESG funds?
To invest in ESG funds, you need to open an online brokerage account, define your ESG criteria, select the appropriate fund, and then invest. This allows you to invest in companies that have social, environmental, and ethical values while earning financial returns.
How to invest in ESG funds?
To invest in ESG funds, you need to open an online brokerage account, define your ESG criteria, select the appropriate fund, and then invest. This allows you to invest in companies that have social, environmental, and ethical values while earning financial returns.
1.Define your values and goals: First, decide what you care most about, such as environmental protection, gender equality, employee rights, or transparent leadership. This will help you choose the right fund.
2. Open a brokerage account: Open an account on any online investment platform by providing a few personal and financial details.
3. Fund the account: Link your bank account to your brokerage account and transfer money to it.
4. Choose an ESG fund: Use research tools and screeners to select ESG funds or stocks that are relevant to your needs.