Sustainable Portfolios for the Future: A Comparative analysis of the rewards of ESG Investments

Priya Arora () and Kavita Sharma
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Priya Arora: Chandigarh University, Research Scholar, Department of Commerce
Kavita Sharma: Chandigarh University, Professor University School of Business

A chapter in Proceedings of the 2nd International Conference on Emerging Technologies and Sustainable Business Practices-2024 (ICETSBP 2024), 2024, pp 607-623 from Springer

Abstract: Abstract The current study aims to examine how investments in ESG affect investor’s returns and attempts to determine whether this sustainability component provides a significant difference in financial performance when compared with their non-ESG components. This is an empirical study, using a sample of all ESG funds that are available in the Indian financial market. Utilizing the secondary research data, analysis of various aspects of returns and risks along with several other key performance measures are done. Additionally, T-test is performed determine whether the return difference is statistically significant, while the Correlation analysis is done to test the connection between the two and lastly the Granger causality test is carried out with a view of ascertaining the cause-and-effect relationship, interdependence and forecasting capability of the returns. The results contribute to the ongoing discussion about sustainable financing. If target stakeholders are more aware of the comparative advantages and challenges in ESG approaches, these persons can exercise careful choices to better match their sustainable and financial goals. Based on the findings of this study, it is expected that ESG investment trust by investors would be enhanced. To the investors, it will provide an assurance that they can invest in ESG and possibly they will not be concerned with how it would impact their set goals. The study is unique in offering understanding of the features and performance of ESG mutual funds as per present dynamic business scenario. Establishment of relationships between benchmark returns and fund returns is also rare in the field.

Keywords: ESG investing; Sustainable Finance; Mutual Fund; ESG fund; Financial Instruments; Environment Social Governance; Risk; Return (search for similar items in EconPapers)
Date: 2024
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DOI: 10.2991/978-94-6463-544-7_40

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