As decades over, the way of people about investment changed, looking into the financial results into measure of a 'good investment' has undergone that is shifting towards environmental, social and gov
As decades over, the way of people about investment changed,
looking into the financial results into measure of a 'good investment' has
undergone that is shifting towards environmental, social and governance. Now
days investors around the world ask questions that Is the company ethical,
environmental friendly and having social responsibility.
Then way of fundamental shift is called sustainable
investing and it is gaining momentum in India rapidly
What
is Sustainable Investing?
Sustainable investing means ESG investing (Environmental, Social, and
Governance), investment strategy which takes into account only non-financial
factors and how it effect the company on climate change, its behavior towards
employees, communities, transparency and accountability of its governance.
Worldwide, assets under management of ESG funds are predicted to grow by USD 53
trillion by 2025, representing one-third of all assets under management, and in
India too, the momentum is building with sustainable finance becoming more mainstream.
The
Indian Context Why It Matters
As economy growing rapidly facing climate change risks like
flooding, heatwaves and pollution. India stands at intersection of
sustainability and development of the economy. These climate change risks and its
vulnerability has raise concern around the world, where India's most aspiring
climate goals as to achieve net zero by 2070 and installed 500 GW of renewable
energy capacity by 2030. These government initiatives as per the national
interest has created tremendous opportunities for investors to back sustainable
growth stories
Examples
of Sustainable Investment Opportunities in India
India is moving towards a clean energy future, with
renewable energy power attracting domestic investors as well as global giants like
Soft Bank and Brookfield. In response, the mutual fund industry has launched
ESG funds, which enable retail investors to invest in companies that have
sustainable business practices. Green Bonds Green bonds are becoming a popular
source for raising money for renewable projects by Indian corporates and public
sector enterprises, and the Power Finance Corporation has issued green bonds to
raise money for clean energy with a lot of interest from foreign investors.
Why
Investors Should Care
sustaining investing is not only doing
good, it is a kind of risk management strategy and path to tap the future
growth. Companies follow and implement ESG practices are likely to suffer
regulatory penalty, build strong reputation with customers, attract and retain customers
and generate consistent long-term growth and returns even during the market bad
times.
Final
Thoughts
The rise of sustainable investor in India has become a trend
rather than just simple investing. It can be known as structural shift to
create wealth and to be wealthier in coming decades. Investors aligning their
portfolio with sustainable, will be supported in creating wealth even though
assisting India to transition to a more sustainable, inclusive, and resilient
economy.
Written By Surendra Jauhari