Sustainable investment management in India

Akshaya Kamalnath

Capital Markets Law Journal, 2025, vol. 20, issue 4, kmaf016.

Abstract: While Environment, Social, and Governance (ESG) investing has gained traction in India, concerns of greenwashing have also become important, thus giving rise to regulations attempting to tackle this. However, the interest in ESG investing seems to have dipped since 2021. This article will survey both the state of play and the regulatory landscape around fund management in India with a focus on ESG investing. Specifically, it examines the regulations for mutual funds and asset managers that have ESG offerings issued in 2023 and regulations for credit rating agencies with regard to ESG ratings. These regulations have been issued by India’s market regulator, the Securities and Exchange Board of India, and sit alongside pre-existing regulations for fund managers. Since the 2023 regulations direct ESG funds to ensure that their investments are in companies that comply with the Business Responsibility and Sustainability Reporting requirements, this article will also examine the BRSR requirements and their lack of comparability with similar disclosure requirements internationally. Some earlier case law on the duties of fund managers will also be explored to facilitate analysis on how ESG requirements might be enforced. The article will argue that, alongside effective regulation, investor education and publicity of regulatory compliance, or lack of it, will also be important if the nascent market for ESG investing is to develop in the country.

Keywords: India; Sustainable investing; ESG Rating Providers; Retail investors; Defense stocks (search for similar items in EconPapers)
Date: 2025
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