COMPARATIVE PERFORMANCE OF ESG AND NON ESG MUTUAL FUNDS IN INDIA: AN INVESTMENT DRIVER FOR SUSTAINABILITY

Abstract

Environmental, Social, and Governance (ESG) is one of the steps in achieving sustainability. Investment in ESG is crucial and investors expect their rate of return in every investment with calculate risk. This study aims to investigate the performance and relationship between the returns of ESG-based and non-ESG-based mutual funds in Indian markets using portfolio evaluation methods and examine the causal relationship between ESG based and non-ESG-based mutual funds across various mutual fund categories. The research utilizes secondary data. ESG investments yield higher average returns and risk compared to non-ESG investments. ESG investments show a stronger alignment with the market trends. There is no causal relationship between the selected mutual fund returns. More investors will be interested in investing in ESG funds which lead to investment in sustainability.