Abstract
After corporate governance and corporate social responsibility, ESG practises are the watchword in the Indian corporate environment. ESG is a far wider phrase than corporate governance and corporate social responsibility, as it encompasses a company's environmental, societal and corporate governance policies. ESG are the three pillars of performance that may be used to assess a company's influence on society and environmental sustainability. During the pandemic, these ESG-rated firms grew incredibly popular among investment portfolios. The investor's behaviour in these sustainable investments is also driven by the reputational benefits and a larger risk-reward ratio. It also assists investors in better understanding a firm and gaining insights into how it behaves, reacts, and evolves in response to numerous ESG aspects. Companies who do not adopt sustainable business strategies may find it difficult to raise both stock and loans in the future years. ESG compliance is required for every organisation that is operating well now and hopes to continue to do so in the future. Globally, there are over 3,300 ESG funds, which have quadrupled in the previous decade. This article studies about the sustainability rating, various ESG Mutual Funds in India, forecast the NAV of the ESG mutual funds using ARIMA.
Highlights
Background to the study: Thematic mutual funds invest in the sectors that are specified with various themes such as rural development, energy conservation, environmental sustainability, corporate governance, export oriented, etc
This study aims to explain the different aspects of socially responsible investing and its significance in India, with a particular focus on India's ESG-linked investment environment
The findings demonstrate that the business case for ESG investment is empirically sound
Summary
Background to the study: Thematic mutual funds invest in the sectors that are specified with various themes such as rural development, energy conservation, environmental sustainability, corporate governance, export oriented, etc. These sectors of that specified theme are allocated 80% of the total assets of that thematic mutual fund. These funds are riskier than any other large cap mutual funds or diversified mutual funds. It refers to the momentum these days. The year 2020 has seen a record of inflows into the ESG investing and the trend is still increasing, Inflows in ESG funds increased 76 percent to ₹3,686 crore in FY21 against ₹2,094 crore in FY20 (Source: The Hindu Business Line)
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