ANALYSIS ON SOCIALLY RESPONSIBLE INVESTMENT USING ECONOMIC, SOCIAL AND GOVERNANCE (ESG) FRAMEWORK IN INVESTMENT DECISION IN INDIA.

Abstract

Many companies and investors are now showing their concern towards sustainable development and creating awareness of environmental stability and socioeconomic development. The apparent lack of governance during the global financial crisis, the growing threat of global warming, social activism, and other factors have recently led to an agreement on the significance of holistic growth and responsible investment. Environmental, social, and governance (ESG) oriented investing is one such technique that has steadily acquired traction among investors. Under the broader issue of sustainable and responsible investment, the Environmental, Social, and Governance (ESG) theme is a successful portfolio selection strategy (SRI).

Through semi-structured interviews conducted with a sample size of six participants, the researcher has chosen a non-probability method. Primary data was collected from semi-structured interviews, and the participants were investors and working professionals actively trading in stocks and other funds.

The thesis will cover three main research areas, all interlinked with each other. The first research area will be how rating agencies influence the decision of an investor. The second research area will be the correlation between international governing bodies and Indian government policies for sustainable investment decisions. Finally, the research paper will look at how ESG scores can possibly create market confusion, causing investors to have different views and opinions. All these three areas are covered in the questionnaire framed and answered.

This study found that a variety of psychographic and extrinsic factors influenced investors' decisions in relation to investing in ESG funds. Before moving to the analysis part of this research study, the researcher analyzed a case study to state the importance of Environmentally Sustainable Governance for any company.

To summarize the research findings, demand and supply are one of the main areas for any investor while making investment choices. The outcome of the study also highlighted that, in addition to price, other factors such as availability of investment options, profits, and awareness also play a major role.