Avendus Capital has announced the launch of its AIF based on ESG (environment, social and governance) theme. The fund will open for subscription on November.
ESG framework is an approach to investment where environmental, social & governance (ESG) factors, in combination with financial considerations; guide the selection of portfolio and management of investments.
The fund will invest in ESG companies based on the score issued by Institutional Investor Advisory Services (IiAS). In addition, Dr Rakesh Mohan (ex-RBI deputy governor) and Amit Tandon, co-founder and MD of IiAS will join the fund’s advisory board. Abhay Laijawala will be the fund manager.
Amit Tandon, co-founder and MD, IiAS expected the theme to grow bigger in the coming years. “Over the past couple of years, Indian corporates have increased focus on governance practices. As governance levels continue to improve, several Indian companies are starting to take a more holistic approach and are focusing on becoming responsible corporate citizens. As a result, we expect ESG to become a much bigger focus of corporate India in the next 18-24 months,” he said.
Citing the examples of British Petroleum, Gulf of Mexico oil spill and Volkswagen emission scandal Abhay Laijawala, MD and fund manager, Avendus Capital Public Markets Alternate Strategies said that ESG is not applying ethical gloss to investing; in fact, it yields better returns too.
The fund will invest in domestic companies with robust ESG practices.
