Amid the COVID-19 crisis, sustainable funds in India have brought in more than $500 million (over ₹3,700 crore) in January-March largely due to growing investor interest in environmental, social, and governance issues, according to financial services major Morningstar.
The report says that Sustainable or ESG (environmental, social, and governance) funds in Asia (excluding Japan) have seen an inflow of over $900 million during the quarter under review.
What Are ESGS?
ESG Investing is used synonymously with sustainable investing, socially responsible investing, mission-related investing, or screening.
Environmental, social and governance (ESG) criteria are a set of standards for a company's operations that socially conscious investors use to screen potential investments.
"Indian funds experienced record inflows of $507 million in first-quarter 2020, supported by Axis ESG Equity, which received $239 million in inflows," the report stated.
According to the report, the inflows in the first quarter of the calendar year 2020 speak of the stickiness of ESG investments. Driven by their values, investors in sustainable funds invest for the long term and are seemingly more willing to ride out periods of bad performance.
According to an Economic Times report, during the last quarter, Axis ESG Equity made its debut in India with $240 million seed capital and the fund assets under management (AUM) was pegged at ₹1,554 crores.
The report further said that the sustainable fund assets in Asia were up 21 per cent to $7.7 billion, bolstered by new fund launches.
Across the globe, these type of funds saw an inflow of $45.6 billion during the quarter under review. In comparison, a withdrawal of $385 billion was seen in the overall fund universe.
The assets in global sustainable funds reduced by 12 per cent to $837 billion at the end of the first quarter of 2020, from a record high of $960 billion towards the end of last year.
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