Environmental, social, and governance (ESG) investing, has been on the rise in India. It’s a way of saying that businesses ought to act morally and responsibly towards the community and the environment.
The Securities and Exchange Board of India (SEBI) has taken steps towards ESG transparency by issuing guidelines to focus on ESG investing. Nevertheless, the likelihood of companies engaging in greenwashing (reporting misleading claims) remains a concern.
In this podcast, Joseph Martin Chazoor Francis, Markets Leader, ESG, PwC India, and a member of the Global Sustainability Standard Board, GRI, talks about the importance of ESG investing, the recent SEBI regulations, ESG-based mutual funds, and more.
Francis says that, along with the SEBI, the RBI recently announced requirements for green deposits to leverage retail investment power for ESG-related transformation. He adds that the country’s investment environment is fast changing to support the green transition through ESG transparency because of all these regulations in the capital markets, the rules from various ministries, and the incentives supplied by the government.
When it comes to ESG-based mutual funds, Francis points out that there are multiple factors that will affect them. Factors such as the general investment sentiment, the trend regarding the United Nations Principles for Responsible Investment (UN PRI) will affect ESG-based mutual funds. UN PRI aims to “promote sustainable investment through the incorporation of environmental, social, and governance..”
However, Francis warns of the high probability of companies engaging in greenwashing and advocates for following sustainability reporting standards that include accuracy, timeliness, balance, completeness, comparability, reliability, and clarity to minimise the risk. Tune in to the full conversation now!