As climate change affects cities, agriculture, and global supply chains, sustainability has become an essential strategy for companies around the world.
Rising operating costs, environmental risks, and stricter regulations mean businesses can no longer ignore sustainability.
Keeping this shift in mind, Baroda BNP Paribas Mutual Fund has launched the Baroda BNP Paribas ESG Best in Class Strategy Fund.
This fund gives investors an opportunity to build long-term wealth by investing in companies that perform strongly on ESG (Environmental, Social, and Governance) parameters.
ESG Adoption Is Growing Rapidly in India
Indian companies are increasingly adopting ESG principles.
According to SEBI data for 2025, 100 of India’s top 1,000 listed companies have published sustainability reports as part of regulatory requirements. About 10 years ago, this requirement applied to only 100 companies.
By the end of FY 2025–26, SEBI’s Business Responsibility and Sustainability Reporting (BRSR) core requirements will apply to the top 500 companies in the country.
Under these rules, companies must assess and certify their key sustainability disclosures.
Today, companies are not just following regulations — they are actively integrating ESG frameworks into their operations to:
Reduce risks linked to environmental and regulatory issues
Strengthen their businesses and promote innovation
Improve brand credibility and gain investor and stakeholder trust
Attract long-term investments from India and abroad
A Fast-Growing Global ESG Opportunity
The ESG investment space is expanding rapidly across the world:
Annual global investment in clean energy is expected to reach about US$2.3 trillion by 2025.
The circular economy market is projected to grow to US$4.5 trillion by 2030.
By 2050, around 68% of the world’s population is expected to live in cities. This will significantly increase demand for green infrastructure and sustainable housing.
What About India?
India has pledged to achieve net-zero emissions by 2070. Initiatives such as the National Green Hydrogen Mission are expected to attract investments worth around ₹8 lakh crore.
India has also started implementing a carbon credit trading scheme, which will be fully rolled out across nine sectors by 2026. This is expected to further speed up the country’s green transition.
(Source: Fund Fact Sheet)
Why ESG Investing Is Gaining Momentum
ESG investing considers environmental, social, and governance factors when making investment decisions.
Historical performance data shows encouraging results. Over the past 10 years, the Nifty 100 ESG Total Return Index has outperformed the Nifty 100 TRI in seven out of ten years.
It also delivered better returns over 1-year, 3-year, 7-year, and 10-year periods up to January 31, 2026.
Research by Baroda BNP Paribas Mutual Fund shows that ESG indices have provided higher rolling returns with lower volatility.
In fact, over the past two years, the Nifty 100 ESG Index showed lower volatility than the Nifty 100 Index on about 85% of trading days.
Sanjay Grover, CEO of the company, said that Indian investors are increasingly choosing thematic strategies, especially sustainability-focused investments.
According to him, investors today want not only strong returns but also investments that contribute to building a sustainable future.
Investment Strategy and Key Features of the Fund
To help investors benefit from this growing trend, the Baroda BNP Paribas ESG Best in Class Strategy Fund has been introduced. The fund will use the Nifty 100 ESG Index as its benchmark.
The fund will invest in companies that:
Follow sustainable business practices
Have strong financial fundamentals
Show long-term growth potential
The investment strategy will combine:
ESG ratings (provided by an external SEBI-registered ESG rating agency)
Detailed fundamental research
In-depth ESG research
Jitendra Shriram, Senior Fund Manager – Equity at Baroda BNP Paribas Asset Management India, stated that only 50 companies will be selected from nearly 5,000 listed companies through a strict four-step selection process.
The scheme will invest in Indian companies that have superior ESG ratings compared to others in their sector.
The aim is to fully integrate ESG principles into the investment process and identify future-ready businesses.
Companies with strong ESG practices are generally better prepared to handle today’s volatile and complex business environment.
Therefore, this scheme offers investors an opportunity to invest in sustainable companies with long-term potential.
How Can You Invest?
During the NFO (New Fund Offer), investors can:
Invest a minimum lump sum of ₹1,000
Start a monthly SIP of ₹500
Invest ₹1,500 through a quarterly SIP
This fund provides an opportunity for a wide range of investors to invest in companies with strong ESG performance and build wealth over the long term.
