Published Online:July 2024
Product Name:The IUP Journal of Accounting Research & Audit Practices
Product Type:Article
Product Code:
Author Name:B Nagarjuna
Availability:YES
Subject/Domain:Finance
Download Format:PDF
Pages:21
The sustainability of a corporation is no longer just determined by its consistent profitability. One of the elements influencing the development of sustainability programs has been the need for socially responsible investing. Socially responsible investment (SRI) is a mode of investing that takes ethical, social and environmental issues into account. Businesses are already feeling the financial effects of not putting sustainability measures into practice. The only way for stakeholders to avoid unfavorable loan terms is to show that they have established reliable sustainability and environmental, social and governance (ESG) programs. India’s entire assets under management (AUM) in ESG funds, as of November 30, 2021, accounted for 0.3% of mutual funds (MFs). The largest ESG fund is SBI Magnum, which has 44.9 bn in AUM ( 21.2 bn). High-quality ESG portfolios beat lower-quality portfolios during times of crisis. ESG performance significantly raises enterprises’ total abnormal returns during an epidemic. The returns of ESG indices, however, are often not statistically different from those of the Nifty. The results imply that businesses and individual investors should focus on them. This study demonstrates that traders witnessed negative periodical returns from the Nifty 100 ESG index, and that various Nifty thematic indices and periodical mean returns differ significantly from one another.
The three criteria that make up ESG are: environmental, social and governance. Nonmonetary sections are progressively being utilized by financial backers as a feature of their insightful cycle to recognize significant dangers and improvement potential. ESG measurements are not frequently needed in monetary detailing, but rather partnerships are progressively distributing them in their yearly report or in a different maintainability report. Various associations, including the Sustainable Development Accounting Standards Board (SASB), the global reporting initiative (GRI), and the task force on climate-related financial disclosures (TCFD), are attempting to foster guidelines and characterize materiality to work with the mainstreaming of these variables into venture interaction. With increased knowledge of environmental degradation and social wrongdoings, investors are increasingly gravitating toward socially responsible investments, the return on which provides a sense of fulfillment, i.e., of fulfilling one’s responsibility to society. Broadening the scope, some companies, on their own initiative, issue sustainability performance reports based on ESG principles (Hoti et al., 2005), and such investors who wish to invest ethically are given a platform to do so.