Latest News | India at the Bottom of Ethical Funds with Just 22 Funds Worth $2 Bn: Report

Mumbai, Oct 1 (PTI) India, despite being the sixth largest economy and the third largest polluter, has the lowest number of ethical/sustainable/green bonds at just about 22 funds, while the tiny Cayman Islands has 28 of them, Pakistan counts them at 159 and the tinier Luxembourg leads the list with as much as 2,135 funds, a report said.

Collectively called the ESG funds (money deployed mutual funds and insurance) globally is over USD 103.4 trillion as of March 2020, while the same here is just USD 7.93 billion through 22 issues in so far 2021, Refinitiv, an arm of the LSEG Business group, said.

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Of this pure green bonds account for USD 5.02 billion, a massive growth from just USD 450 million in 2020 while purely marked as ethical funds are just about USD 2.03 billion in the country as of August 2021, which has been steadily rising from USD 445 million in November 2019 which rose to USD 499 million in August 2020 and USD 1,169 million in November 2020. Of the USD 5 billion, energy and power industry are the largest borrowers so far this year with USD 3.7 billion.

However, the report says the country is witnessing an early signs of pick-up in demand for ESG funds -- which are funds broadly labelled as ESG or environmental, social and governance/sustainable investments/ethical funds across mutual funds and insurance products as four of the past five quarters saw strong demand.

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Yet India is well below many countries and markets as there are only 22 ethical funds in India compared to Belgium (148), Pakistan (159), China (162), Germany (352), USA (612) and even Cayman Islands (28) and Luxembourg leading at 2,135.

While the Luxembourg leads the ethical fund issuance with 2,135, Australia is second with 1,006 such issuances, France comes third (844), Ireland (630), US (612), Britain (562).

Malaysia (465), Sweden (440), Switzerland (405) and Germany with 352 issues. The world's biggest polluter China has issued 162 such funds and even Pakistan has 159 and among 40 countries Refinitiv lists India is at the bottom with just about 22 ethical funds valued at a little over USD 2.02 billion as of August 2021.

Meanwhile, the top 10 sustainable finance deals in the country so far this year are the following: JSW Steel's USD 999.99 million bond issuance in September; Greenko's Dutch arm's USD 940 million in March; Adani Green Energy's USD 750 million in September; JSW Hydro Energy's USD 707 million in May; Axis Bank-Gujarat International Finance Tech city's USD 600 million in September; Renew Power USD 585 million in March and Shriram Transport Finance's USD 500 million issue in January.

Others included India Green Power Holdings' USD 460 million issue in February, Cliffton raising USD 450 million in March,and Ultratech Cement's USD 398.44 million issue in February.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)