How much real change is possible if this investment mindset thrives in the coming decades?
Thursday, Oct 12, 2023
Well, if you look at the previous decade, ESG-related funds saw massive growth due to an extreme level of investor interest. The biggest money manager on the planet, BlackRock, even curated multiple financial instruments to cater to this new influx of investors with unique beliefs and traits. As of now, BlackRock manages about $65.5 billion just in the ESG category. They think that investor interest is only going to grow for making socially conscious investments that fetch good returns while also enabling a quicker sustainability transition. Financial businesses globally are creating more targeted niches, such as low-carbon, women-led, etc.
Features such as a low-carbon economy are garnering more interest, and this trend is only going to rise exponentially in the coming years. This is due to the serious transition goals set by all advanced economies worldwide as well as the interest of private retailers in ESG. Investors now not only care about the returns that they get but also want to have a say in the global sustainability transition.
The ESG mindset is now so deeply rooted in terms of finance and investments that it has become a strict matter of political debate in Washington, D.C. And we all very well know how much of a sway America’s decisions have on Indian investors.
All this points to one thing. Companies no longer have the option to be carefree concerning their operations. They need to carefully evaluate their position with respect to the approach that they are taking to ensure sustainable business practices. They need to work for the right cause and respect societal sentiments. Corporate governance has never been more important, as one mishap has the power to plunge their market share considering the new breed of investors that they are dealing with.
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