ESG FUNDS SEE RECORD INFLOW

Worldwide investment in ESG (environmental, social and governance) funds saw a record $152.3 billion inflow in the fourth quarter of 2020, according to a note by Morningstar, released to coincide with Earth Day on Thursday.

The Covid-led crisis has only accelerated the demand for sustainable investing.

The Indian mutual fund industry also witnessed increased interest in ESG funds, with the launch of several new ESG funds in the second half of 2020. India had the largest quarter-on-quarter asset growth as new launches resulted in the doubling of ESG fund assets to $1.3 billion," Morningstar said.

Since India's first ESG fund launch in 2018, inflows in these funds are picking up pace (from Rs 16.01 crore in January 2019 to Rs 103.78 crore in March 2021), though it's still early days.

Globally assets in sustainable funds hit a record $1,652 billion as of the end of December, up 29 per cent from the previous quarter.

"Europe accounted for almost 80 per cent of these inflows. The United States took in 13.4 per cent, up slightly from 12 per cent in the previous quarter, while flows in the rest of the world also grew, clocking in at $11.1 billion for Canada, Australia and New Zealand, Japan, and Asia combined," the Morningstar note said.