The ‘E’ S’ and ‘G’ in ESG Funds are the three pillars of this Mutual Fund scheme. ESG stands for Environment, Social and Governance. Every ESG fund manager goes through these parameters before selecting stocks to build a diversified and sustainable portfolio. ESG metrics play an important role in deciding that the fund will invest as the fund filters through these three parameters and invests only in securities and companies that are ESG compliant.

ESG investors are focused on sustainability and social responsibility. Hence, they expect the ESG scheme to tick all the right boxes when it comes to building a portfolio of stocks of companies that score high in all the three components namely environmental, social and governance. Companies with low ESG scores are less likely to receive funding from ESG investors. The focus here is not just to earn capital appreciation, but also to invest with the hope of reducing the carbon footprint by exiting companies that contribute heavily to global warming and climate change.

Approach to ESG Investing

The fund house only considers quality companies that can generate sustainable growth. The fund house believes that only companies with a long-term horizon and mindful of their impact on all stakeholders can be able to sustain supernormal growth and returns.

Consider starting SIP

Systematic Investment Plan is an investment vehicle where ESG investors can invest small fixed amounts at regular intervals over a specified time period.

Here is a simple example to help you understand how you can create wealth by starting SIP

Let’s say you want to create a corpus of Rs 12 lakh over 10 years using ESG Equity Funds. You can do this by starting a monthly SIP of Rs 10,000 in ESG Equity Fund. At the end of your SIP investment journey, not only would you have created a corpus of Rs 12 lakh, but you might also be able to earn some capital appreciation on the amount invested.

sip Investors are also known to take advantage of the power of compounding and rupee cost averaging. When you start a monthly SIP, every month on a specified date a pre-defined amount is automatically debited and transferred to the fund. One can target their long term financial goals by investing disciplinedly through SIP.

“This is an investor education and awareness initiative by Axis Mutual Fund. Investors need to complete a one-time KYC process. For more details visit www.axismf.com or contact us at Customerservice@axismf.com. Investors should only Should deal with registered mutual funds, details of which are available at www.sebi.gov.in – INTERMEDIARIES/MARKET INFRASTRUCTURE INSTITUTIONS section. For any grievance redressal, investors may call us at 1800 221 322 or write to us at customerservice@ axismf.com or register a complaint on SEBI Scores Portal https://scores.gov.in.