ESG Mutual Fund- Looking Beyond The Annual Reports

Posted On Friday, Jun 21, 2019

Share:

Investing in good corporates is intuitively appealing. ESG Investing is buying sustainable businesses that are leaders in their industry when it comes to caring about their people, the planet, and their company's purpose and mission reflect that distinctly.


ESG encourages a broader view as it encourages companies to look beyond their traditional remit. ESG scores measure sustainability. Companies are evaluated on non-financial criteria. ESG factors cover a wide spectrum of issues that traditionally are not part of financial analysis, yet may have financial relevance. This might include how corporations respond to climate change, how good they are with water management, how effective their health and safety policies are in the protection against accidents, how they manage their supply chains, how they treat their workers and whether they have a corporate culture that builds trust and fosters innovation.


ESG investing is based on the assumption that ESG factors have financial relevance. For the average investor, spotting ESG risk can be challenging. ESG factors may not be evident in financial statements. Some of this information may be found in annual reports or separate corporate social responsibility reports corporations produce. More companies are also providing voluntary disclosure through organizations such as the Global Reporting Initiative or the Carbon Disclosure Project. Investors need to familiarize themselves with the potential risks within a company and stay on top of the news about their investments.


High E score - can indicate that a company is less exposed to significant risk due to environmental issues.

High S score - can reflect a better ability to attract and retain skilled workers, to maintain consumer loyalty and avoid product liability issues.

High G score - indicates a well-run company with strong governance and high-level risk controls.


Fundamental investors typically agree that a strong corporate culture is a pre-requisite for a sustainable “value creation” and that this may fall across an “S” or “G” dimension. There is strong research evidence of ESG investing delivering good returns since companies with strong sustainability scores demonstrate better operational performance and are less risky. Claims that you have to surrender returns to engage in sustainable and impact investing are flawed. Far from harming returns, compelling evidence suggests it often boosts the risk-adjusted rate of return.


ESG criteria have broadened the way participants in the ecosystem think and behave. For e.g.: On the social side, companies with strong relationships with stakeholders including employees, suppliers, communities and investors; benefit from a strong reputation and potentially more business. Since a rising share of a company’s valuation is tied to intangible assets such as brand reputation, environmental and social performance is more material than ever.



Product Labeling

Name of the Scheme & Primary BenchmarkThis product is suitable for investors who are seeking*Risk-o-meter of Scheme
Quantum India ESG Equity Fund

An Open ended equity scheme investing in companies following Environment, Social and Governance (ESG) theme
• Long term capital appreciation

• Invests in shares of companies that meet Quantum's Environment, Social, Governance (ESG) criteria.
Quantum India ESG Equity Fund
Investors understand that their principal will be at Very High Risk

* Investors should consult their financial advisers if in doubt about whether the product is suitable for them.


Disclaimer, Statutory Details & Risk Factors:


The views expressed here in this article / video are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The article has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of this article should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments. Please visit – www.quantumamc.com/disclaimer to read scheme specific risk factors.

Above article is authored by Quantum.

View All

  • Multi-Asset Allocation Fund: Navigating Choppy Waters When Equity Seas Get Rough
    Multi-Asset Allocation Fund: Navigating Choppy Waters When Equity Seas Get Rough

    Posted On Thursday, Feb 22, 2024

    Indian equities are scaling new heights, reaching lifetime highs where Sensex crossed the 73,000 and Nifty crossed 22,000 mark for the first time ever on January 15, 2024.

    Read More
  • Valentine’s Day Special: A Perfect Match for Certainty in an Uncertain world
    Valentine’s Day Special: A Perfect Match for Certainty in an Uncertain world

    Posted On Wednesday, Feb 14, 2024

    As Valentine's Day approaches, it is a great time for creating and nurturing relationships.

    Read More
  • Debt Monthly View for January 2024
    Debt Monthly View for January 2024

    Posted On Wednesday, Feb 07, 2024

    January 2024 marked some significant moves in both domestic and global bond markets.

    Read More

Add To Cart

Add To Cart

Your cart is empty
Total of Lumpsum
Amount

Get In Touch

Take small steps in financial planning to achieve big dreams! Start your investment journey today!

@@tlcomstart@@ @@tlcomend@@