Understanding the Risk and Opportunities as Well as Performance Variance Associated with ESG Funds for the Future of Investors in India

Abstract

Environment, Social and Governance (ESG) is an evolving field where the investors can grow their long
term capital by keeping environmental and social objectives intact such that it is done in a socially
responsible way. The ESG market has also got several risks as well as opportunities which may affect the
investor in the long run. The investors in the recent scenario has got new avenue for investment by taking
care of the social and environmental aspects and, thereby the ESG funds are increasing day by day and its
value is also rising since its inception. Stakeholders are finding such socially responsible funds better than
normal funds for investment at times which is urging the companies to go for sustainable reporting standards
and to introduce more such ESG funds for the future of investors. Though the ESG funds and the companies
associated with such funds have sustainable values, there is an inherent risk associated with ESG and there
are future opportunities for the market which is not ignorable. Therefore, the researcher attempted to study
and understand the risks and opportunities associated with ESG for the companies and investors in general,
and furthermore to access the performance of such ESG funds in our country such that the investors can reap
benefits out of it during choosing their portfolio. The researcher arrived at definite findings ascertaining the
results of the study and based on that conclusion of the current study have been given by the researcher with
several recommendations such that the market can evolve in future.