ESG Mutual Funds: Now Social Responsibility and Profit—Both Together! What are ESG Mutual Funds, and How to Invest?
Investments are typically made solely for profit, but today many investors want their money invested in companies that care about society, the environment, and ethical values.
ESG Investing stems from this thinking.
E = Environmental
S = Social
G = Governance
Mutual funds that invest in companies that perform well on these aspects are called ESG Mutual Funds.
🟦 What are ESG Mutual Funds?
ESG funds are mutual funds that invest in companies that have a strong track record in:
Environmental Protection
Social Concerns
Transparent Corporate Management
👉 Environmental
How little negative impact does the company have on the environment?
Does it adopt sustainable policies?
👉 Social
How does the company treat its employees, customers, community, and society?
👉 Governance
How transparent is the company's leadership?
Is there discipline and accountability?
🟩 Popular ESG Mutual Funds in India
Various Asset Management Companies (AMCs) in India offer several ESG-based funds:
Aditya Birla Sun Life ESG Integration Strategy Fund
Invesco India ESG Integration Strategy Fund
Kotak ESG Exclusionary Strategy Fund
Quantum ESG Best-in-Class Strategy Fund
Mirae Asset Nifty 100 ESG Sector Leaders FoF
ICICI Prudential ESG Exclusionary Strategy Fund
🟦 Benefits of Investing in ESG Funds
✔ 1. Alignment with Personal Values
If the environment, society, and ethics are important to you, ESG funds are a better choice.
✔ 2. Lower Risk
Such companies have a lower risk of scandals, fines, or negative news.
✔ 3. Long-Term Growth Potential
Businesses with good governance and responsible behavior do better over the long run.
✔ 4. Prepared for Future Challenges
ESG Companies
Technological Change
Employee Needs
Customer Demand
Innovation
How to Invest in ESG Funds? (Step-by-Step Guide)
1. Define Your Values and Goals
Do you value a particular value, such as the environment, equality, transparency, or human rights?
Select funds accordingly.
2. Open an account with a brokerage/investment platform
Groww, Zerodha, Paytm Money, or any AMC's website may be used to start investing.
3. Expand the Account's Funds
Once your bank account has been linked, add the investment amount.
4. Choose the Right ESG Fund
You can invest in two ways:
👉 ESG ETF and Mutual Fund
There is less risk because the money is spread across several companies.
👉 ESG Score-Based Individual Stocks and Bonds
Investing directly in companies with strong ESG scores.
FAQs: Frequently Asked Questions Regarding ESG Mutual Funds
1. Are ESG funds secure?
They are not as "safe" as traditional funds, notwithstanding the decreased likelihood of fraud and dispute.
2. Do ESG funds yield profitable returns?
Market risk still exists even though ESG companies have shown better long-term success.
3. Can new investors start an ESG fund?
Yes, it's a wise decision, even for beginners.
4. How to find out the ESG score?
Companies' ESG scores are displayed on several websites, including Morningstar and MSCI ESG Ratings.
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Conclusion
If you want investments that are not just about profits but also about social, environmental, and honest management values, ESG mutual funds can be a wise choice. Investing in these funds not only increases your wealth but also supports comp
anies that aim for a better future.
This means your money is invested in the right place and you also get returns—a double win.
