The Securities and Exchange Board of India (SEBI) on July 20, 2023, issued a circular regarding the New category of Mutual Fund schemes for Environmental, Social, and Governance (“ESG”) Investing and related disclosures by Mutual Funds.
According to the current regulatory criteria, Mutual Funds are only allowed to introduce one equity scheme that includes ESG investment. It has been determined to allow the establishment of several ESG schemes by Mutual Funds with various strategies in light of the industry's arguments for and against this decision, as well as the growing demand for green finance.
The following has been stated:
• Thematic Schemes on ESG Strategies
• Investment criteria for ESG Schemes
• Disclosure requirements for ESG Schemes
o Scheme strategy to be reflected in scheme name
o ESG scores of securities
o Voting disclosures by ESG schemes
o Annual Fund Manager commentary and disclosure of the case studies
Please find further details attached to the document.
[Circular No. SEBI/HO/IMD/IMD-I –PoD1/P/CIR/2023/125]
