Leading asset management companies like ICICI, Aditya Birla, Quantum India, Kotak, to name a few have taken a fancy to the Environment, Social and Governance (ESG) Fund. They have generated a cumulative INR 4,900 Crore since October last year.
The ESG has gained even more momentum due to the Covid 19 pandemic, where the funds have outshined the sector by 14.9%. It seems all the funds will be ESG compliant given the national and international pressure to achieve the same.
Kotak MAC was the first mutual fund to join UN Principles For Responsible Investment. Since November it has managed about INR 1573 Crore. Given that ESG theme-based companies are based around the “gaining momentum” template, it makes it easier for the consumer to invest in companies that ensure stable returns.
ESG funds are equity plans that invest in ESG compliant companies. For instance, thermal power operated NTPC has recently switched to solar energy driven power. This makes it an ideal candidate for an ESG investor. On December 24, 2020, Aditya Birla Sunlife launched its ESG Fund and presently holds Asset Under Management (AUM) of INR 1,666 Crores. Recently, L&T and Tata Group are also working to increase their ESG compliance.