Money Guru: What is ESG Scheme of Mutual Funds, benefits, how to invest? Decoded

Money Guru: India is now becoming more responsible towards the environment. Everybody loves to invest in a green and healthy environment, but do you know the love for the environment can also bring profit to you with the ‘ESG scheme’. So, what is the ESG Scheme of Mutual Funds? What is the mode of investment in an ESG scheme? What are the benefits of investing in the ESG Fund? Zee Business Swati Raina explores all these points in a discussion with Kaustubh Belapurkar, Manager of Research of Morningstar, on the popular TV show ‘Money Guru’.

What is ESG Scheme?
ESG stands for Environment, Social, and Governance. Certain companies meet environmental, social, and governance standards and have these standards in their portfolios as well. ESG funds look at the non-financial factors of the company. For example, whether the business of the company is not affecting the environment badly, whether the company has good relations with the society and stakeholders, whether the company is fulfilling the Corporate Social Responsibility or not, etc. Fund managers invest in companies with high standards .

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ESG Fund – Growing Opportunity in India
India is predominantly a country of youth, with 65 percent of its population below the age of 35. Environmental awareness is increasing day by day in India. People are paying more attention to social responsibility. People’s interest in chemical-free, organic, low-emission items is increasing continuously. And this is the reason why there is a good growth opportunity for ESG funds in India.

What are the different types of ESG schemes?
SBI Magnum Equity ESG
ABSL ESG
Axis ESG Equity
ICICI Pvt. esg
Invesco Industries ESG Equity
Kotak ESG Op. Fund
Mirae Asset Esg Sect. LDR. fof
Quant ESG Equity
Quantum India ESG Equity
Baroda BNP P Aqua Fof
HSBC Global Eq. Climate Change FoF

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ESG Fund – For whom?
Those who know the pros and cons of ESG investment will take advantage of the ESG fund. Also, investors who can take risks in investing and aiming for the long term are suitable for the ESG scheme.

How to Invest in an ESG scheme?
There are two modes of investment – active and passive. There is a possibility to invest in ESG through active funds. You can also invest in ESG-linked ETFs. The role of a fund manager is important in an active fund. Whereas the ESG Index has several global leaders in research, you can approach them too.

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