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         growth, but the U.S. market is catching up, with over 550  Magnum ESG Fund, Axis ESG Equity Fund, and ICICI
         ESG mutual funds now available to investors, up from 400  Prudential ESG Fund. By 2024, more AMCs are launching
         in 2020.                                             ESG-focused funds to meet the growing demand, spurred
                                                              by rising awareness and data availability.
         Institutional Investor Engagement  Institutional investors,
         including  pension funds  and endowments, remain key  Challenges and Opportunities in India Despite the upward
         players in ESG investing. According to a 2023 BlackRock  trend, ESG investing in India still faces several challenges.
         survey, 90% of institutional investors plan to significantly  One of the primary obstacles is the lack of standardized
         increase their ESG investments over the next five years.  ESG metrics, making it difficult for investors to compare
         These investors are increasingly focused on companies with  companies.  Additionally,  awareness  of  ESG  investing
         strong ESG credentials, recognizing that they are better  remains  relatively  low  among  retail  investors,  limiting
         equipped  to  handle  risks  like  climate  change  while  broader adoption.
         delivering superior long-term returns.
                                                              However, opportunities abound. With increasing corporate
         Technological Integration in ESG Investing Technological  adoption of sustainable  practices, and more  companies
         advancements continue to drive ESG investing. Artificial  improving  their ESG disclosures,  the market  for  ESG-
         Intelligence  (AI)  and  big  data  tools  are  now  more  themed investments is set to grow. SEBI's reforms and the
         sophisticated, allowing for better assessment of companies'  rise of socially conscious investors, particularly millennials,
         ESG performance. Blockchain technology is increasingly  will further fuel this expansion.
         being used to create transparent, immutable records of ESG
         activities, and robo-advisors are integrating ESG criteria Corporate Adoption of ESG Practices
         into  their  algorithms,  making  sustainable  investing  More Indian companies are recognizing the importance of
         accessible to a broader retail investor base.        ESG factors in attracting investments. Companies such as
                                                              Tata Consultancy Services (TCS) and Infosys continue to
         Development of ESG Investing in India                lead  the  way  in  sustainable  practices  and  have  been
         Early  Stages  of  ESG  Adoption  India's  ESG  investing  recognized for their strong ESG performance. International
         landscape, though nascent, has shown rapid progress. As  investors, especially from Europe and North America, with
         of 2023, the assets under management  (AUM) of ESG   strict  ESG criteria, are increasingly  looking  to invest in
         funds in India grew by 92%, reaching INR 18,000 crore.  Indian companies that adopt sustainable practices.
         While  this is still a relatively small part  of the broader
         mutual fund industry, the  growing recognition of ESG  Scope of Growth in the Indian Market
         factors by Indian investors is promising.
                                                              Rising  Demand  for  ESG  Investments  Millennials  and
                                                              younger investors are driving ESG investment growth in
         Regulatory Framework and Disclosure Norms SEBI has
                                                              India. A 2023 Morgan Stanley survey revealed that 97%
         been at the forefront of ESG promotion in India. Since
                                                              of millennials in India expressed interest in sustainable
         2021,  SEBI  has  mandated  that  the  top  1000  listed
                                                              investing. As awareness of ESG issues grows, demand for
         companies  must  submit  Business  Responsibility  and
                                                              ESG-themed  mutual  funds  is  expected  to  expand
         Sustainability Reports (BRSR). These reports continue to
                                                              significantly, especially in urban centers and among high-
         improve the consistency and quality of ESG disclosures,
                                                              net-worth individuals.
         making  it  easier  for  investors  to  evaluate  corporate
         sustainability practices.
                                                              Potential  for  Financial  Outperformance  Companies with
         Emergence of ESG-Themed Mutual Funds The demand      strong ESG credentials are increasingly viewed as better
         for ESG-themed mutual funds in India is increasing, with  positioned for long-term success. A 2022 study by MSCI
         major asset management  companies (AMCs) responding  found that high-ESG-rated companies in emerging markets,
                                                              including India, outperformed their peers by an average
         by launching new funds. Notable examples include the SBI

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