Environmental, Social, and Governance (ESG) investing is poised to gain prominence in India following a significant regulatory decision by the Securities and Exchange Board of India (SEBI). SEBI has opened the doors for mutual funds to launch dedicated ESG funds and incorporate sustainable principles into their existing investment strategies. This move comes as ESG investing gains global momentum, where investors increasingly prioritize environmental responsibility, social impact, and corporate governance practices alongside financial returns. With SEBI’s approval, the Indian investment landscape is set to witness a surge in ESG-focused funds, providing investors with the opportunity to support businesses that align with their values and promote positive change.
SEBI’s move to permit more funds to embrace sustainability is a significant step towards aligning India’s financial markets with global ESG trends. As investors seek not only financial returns but also social and environmental benefits, ESG-focused funds are expected to experience increased demand. This surge in ESG investing is set to contribute to sustainable development efforts, as responsible businesses are rewarded with greater investment flows. With ESG principles gaining prominence in the Indian investment landscape, the country is poised to harness the power of capital markets to drive positive change and support businesses that prioritize sustainable and ethical practices.