ESG investment: What you need to know about the next investing realm?

Among the different investing philosophies, talk about ESG investment has intensified in recent times. ESG-based investment seeks interconnection between sustainability and the financial system. This piece throws light on how India is making headway towards sustainable investing practices. It also aims to demystify the product and offer reasons why investors should extend their horizon and consider ESG as a worthwhile investment option.

Investors look at the financials and future prospects of a company before investing in it. However, the ongoing pandemic proved to be an eye-opener in the way companies are assessed. They are now evaluated not only for their financials, but also their sustainability during periods of stress.  The concept of ESG (Environmental, Social, Governance) investing is similar in the sense that it looks into an organisation’s non-financial parameters. The concept has been popular abroad for a while, and is slowly catching on in India.  What is ESG investing and how does it work? ESG investing refers to investing in companies that follow practices that align with environmental empathy, social responsibility, and corporate governance. Many experts refer to this as socially responsib...