Responsible or sustainable investment in India is at a niche stage as assets deployed under this strategy amount to nearly $31 billion while globally it stood at a whopping $22.89 trillion, says an Oxfam India report. “Assets deployed with Sustainable and Responsible Investing (SRI) strategies is rapidly growing globally and stands at around $22.89 trillion presently,” the report said. In India, the current capital deployed with SRI strategies stood at around $31 billion. Of this, the capital allocation in Indian equities screened using responsible investment strategies stood at close to $25 billion while green bonds account for nearly USD 5.5 billion.
According to the Oxfam India report, which captures the present landscape of sustainable and responsible investing in India and outlook of investors, more Environmental-Social- Governance (ESG)-linked funds are now allocating capital to India. Sustainable and Responsible Investing considers performance of a company with respect to its natural capital, its interaction with society, consumers and employees and measures policies and processes of the company and management of stakeholder interests to help make better informed decisions.
The report said that in India, this trend is likely to grow further, largely owing to three major factors: macro trend of responsible investing becoming an increasing portion of global funds, Indian asset managers beginning to adopt ESG Strategies and growing ‘Green Bonds’ market. SRI Assets in India are deployed mainly by global investors. The 95 global socially responsible funds have invested in India and allocated 18.5 per cent of their funds to Indian companies while 41 global funds pumped in 25 per cent of their funds in Indian equities. “India’s socially responsible funds are few in number and also managing a small asset base. As outlined in subsequent sections, this number has grown and is likely to emulate the global trend of assets being managed with SRI strategies,” the report noted.