Demystifying ESG: A Beginner's Guide to Sustainable Investing in India

Author: Charles Emanuel
Last Updated: Feb 23, 2024 22:49
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Responsible investing is gaining momentum in India, with ESG - Environmental, Social, and Governance - principles taking centre stage. This blog serves as your opening to understanding ESG and its impact on business’s social impact investment choices in the Indian market.


Thinking Beyond Profits

While profitability remains key, Indian investors are increasingly recognizing the interconnectedness of business and its broader impact on society. ESG principles acknowledge this by evaluating companies based on the following:

Environmental: How does the company manage its carbon footprint, water usage, and waste disposal in the Indian industry context? For example: by adhering to stricter pollution regulations?

Social: What are the organisation’s labour practices, diversity & inclusion efforts, and community engagement initiatives, like? For example: fair wages, women empowerment, skill development programs, etc.

Governance: Does the company operate ethically, transparently, and with accountable leadership, adhering to all Indian regulations and industry best practices?


Why Does ESG Matter for Indian Investors?

Integrating ESG factors into your investment strategy offers several advantages, specific to the Indian industry:

Align your values with your portfolio: Companies may invest in developmental organisations that share your commitment to social and environmental progress in India.

Reduce risk: Companies with strong ESG practices are often better prepared for long-term challenges like climate change and water scarcity, especially in drier states in India.

Potentially enhanced returns: Studies suggest companies with strong ESG practices may outperform their less sustainable industry counterparts, providing a competitive edge.


Getting Started with ESG Investing in India:

Taking your first steps in ESG investing -

Explore SEBI ESG guidelines and initiatives: An organisation must familiarize itself with the Securities and Exchange Board of India's (SEBI) efforts to promote ESG investing in India.

Leverage resources and platforms: Individual investors may also utilize platforms like NSE Nifty ESG indices and AMFI ESG Mutual Funds listings to identify investment options.

Talk to a financial advisor: As an individual investor, discuss your sustainability goals with a financial advisor who will guide you towards your ESG investments. An organisation may draw up its ESG policies and goals, and further explore investment options tailored to their market and aligned with their company’s values. 

Remember, ESG investing is a journey, not a destination. Continuous learning and evaluation are key. There is no "one-size-fits-all" approach. Aligning the UN SDGs within the Indian context, Job Booster India assists you in tailoring your ESG investments, to form the organisation’s ESG investment policies, impact and financial goals. Even small steps towards sustainable investing can make a significant impact. JBI helps you invest in a future to believe in, embrace ESG principles, and join the movement towards a more responsible and sustainable corporate India.

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