ESG Criteria to Drive 34 pc India’s Investment Assets by 2051

A recent report by Avendus Capital suggests that Environmental, Social and Governance (ESG) parameters are poised to emerge as pivotal factors influencing investment decisions, predicting that they could encompass as much as 34 percent of India’s total domestic investment assets by 2051.

The report highlights the remarkable growth in the assets under management of ESG-focused funds in India, which surged four-fold from $330 million in 2019 to  $1.3 billion as of June 2023. This increase underscores the growing significance of ESG considerations in the investment landscape, as both institutional and retail investors increasingly prioritise ethical and sustainable investment opportunities.

The integration of ESG criteria into investment decisions signifies a transformative shift in the financial industry, with investors increasingly recognising the significance of environmental, social and governance aspects in assessing the long-term viability and sustainability of companies. The incorporation of ESG parameters allows investors to evaluate not only financial performance but also the broader impact and ethical practices of the entities in which they invest.

The growing traction of ESG-focused investments reflects a broader global trend where sustainability and ethical considerations have become integral components of investment strategies. Companies and funds that prioritise ESG criteria are more likely to attract responsible investors.