Despite challenges, ESG investing is gaining momentum in India

There is rising recognition of Environment Social and Governance (ESG) investing in developing economies, especially in times of increasing global uncertainties owing to the COVID-19 pandemic. Companies with strong ESG credentials are seen to be performing well financially with a marked increase in the share prices vis-à-vis their competitors. This indicates increased integration of ESG into asset pricing. Interestingly, the risk and return trade-off for investors have also changed after the onset of the pandemic.