SEBI tries to pin down ‘environment, social and governance’ stocks
Thousands of crores have gone into brand new funds investing in “ESG” firms. But how does a coal miner or a fraud-hit company count?
Why read this story?
Editor's note: We have a hot new phenomenon in the market—ESG, short for “environment, social and governance”. The market knows it, listed companies know it, fund managers know it and the regulator knows it. Companies are lining up to attract more equity capital with their statements of commitment towards environment and social consciousness and impeccable governance standards. Fund managers who are looking for ways to attract more retail money in equity funds have launched seven new funds in the past one-and-a-half years, solely focused on companies that are scoring high on the three parameters of environmental sustainability, social impact and corporate governance. These funds in a short period of 18 months have amassed assets under management of Rs 7,000 crore. As an aside, Mukesh Ambani’s Reliance Industries Ltd at its annual general meeting yesterday notably announced a Rs 75,000 crore plan to invest in “new energy”, which could at least in part be a step towards securing a slice of that burgeoning ESG funding. Anyway, with the exception of SBI Mutual Fund and Quantum Mutual Fund, all the other fund houses launched …
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