ECG INVESTING : AN INDIAN INVESTOR PERSPECTIVE

Abstract

What criteria should investors consider before committing to a fund? Are there specific company or fund metrics investors should assess before investing in funds, whether they are index funds or mutual funds? Typically, investors focus on the fund's returns relative to its risk profile and the expenses charged by the fund manager. Our research aims to investigate whether retail investors are expanding their considerations beyond the risk-reward dynamic and taking into account the ESG parameters of the company before making fund investments. This study conducts an in-depth exploration of Environmental, Social, and Governance (ESG) investments, focusing on the perspectives of Indian investors. Our research endeavors to achieve four main objectives: understanding investor perceptions of ESG investments, identifying critical ESG factors influencing investment decisions, assessing the performance and growth of ESG mutual funds in the Indian market, and comparing the risk-return profiles of ESG and traditional funds. Additionally, we formulate three hypotheses to investigate the relationships between gender, investment exposure, ESG awareness levels, and their incorporation into investment decision-making processes. The findings from our study reveal several key insights that shed light on the dynamics of ESG investing in the Indian context. Firstly, we find no statistically significant relationship between gender and investment exposure, suggesting that awareness of ESG funds may not be uniformly distributed among genders. In conclusion, our research offers valuable insights into the dynamics of ESG investing from an Indian investor perspective. By understanding the factors influencing investor perceptions, assessing the performance of ESG investments, and proposing actionable recommendations, we aim to promote sustainable and responsible investment practices in the Indian market. Through collaborative efforts between investors, regulators, and industry stakeholders, we can work towards building a more resilient and sustainable financial ecosystem that benefits both investors and society as a whole.