ESG Mutual Funds
ESG Mutual Funds offer a unique way to invest in companies that prioritise environmental sustainability, social responsibility, and strong governance. While some investors gravitate towards equity or debt mutual funds, ESG funds allow you to invest in companies that align with your values and make a positive impact on the world. These funds carefully select companies that demonstrate a commitment to environmental conservation, social justice, and ethical governance practices, giving you the opportunity to grow your money while supporting businesses that are dedicated to making a difference. Let's learn more about this types of mutual fund.
Best ESG Mutual Funds
List of the top-performing ESG Mutual Funds sorted by returns with their AUM and Expense Ratio.
What are ESG Mutual Funds?
ESG's full form is Environmental, Social, and Governance. These mutual funds invest in companies that meet specific criteria in these areas.
Environmental: Considers a company's impact on the environment, including carbon emissions and waste management.
Social: Focuses on employee welfare, gender equality, and contributions to social causes.
Governance: Emphasizes regulatory compliance, ethical conduct, and strong internal controls.
New and evolving: ESG funds in India are relatively new and may not have a long-term track record.
Consider personal goals and risk: Investors should carefully evaluate their individual investment goals and risk tolerance before investing in ESG funds.
It offers you a way to invest in companies that are committed to sustainable practices and positive societal impact.
How ESG Mutual Funds Work?
ESG mutual funds work by incorporating ESG criteria into their investment selection and management processes. Here’s a breakdown of how they typically operate:
ESG Screening: Fund managers use ESG criteria to screen potential investments. This involves evaluating companies based on their environmental impact, social practices, and governance structures. Companies that meet the fund’s ESG standards are included, while those that do not are excluded.
Integration and Analysis: ESG factors are integrated into financial analysis. Fund managers assess how ESG issues may impact a company’s long-term performance and sustainability. This may involve qualitative and quantitative analysis of ESG data alongside traditional financial metrics.
Investment Selection: Based on the ESG analysis, the fund selects investments that align with its criteria. This can involve choosing companies with strong ESG practices or those that are making positive strides in addressing ESG challenges.
Active Management: Many ESG funds are actively managed, meaning fund managers continuously monitor and adjust the portfolio to ensure alignment with ESG goals and to respond to changing market conditions.
Reporting and Transparency: ESG funds often provide detailed reports on their ESG performance, including how investments meet ESG criteria and the impact of the fund’s investments on societal and environmental issues.
AUM Growth of Equity Esg Mutual Funds - December 2025
In the past one month, the WhiteOak Capital ESG Best-In-Class Strategy Fund Direct Growth has emerged as the leader in net AUM growth, witnessing an impressive addition of ₹0.38 crore. This positions it as one of the top-performing Equity Esg mutual funds in terms of investor interest and fund growth.
Fund | 1M Net Flow | 1M Net Flow % | |
|---|---|---|---|
 WhiteOak Capital ESG Best In Class Strategy Fund Current AUM: 71.09 Cr | +₹0.38 Cr | 0.56% | Invest |
 Mirae Asset Nifty 100 ESG Sector Leaders Fund of Fund Current AUM: 98.34 Cr | -₹1.73 Cr | -1.79% | Invest |
 Invesco India ESG Integration Stategy Fund Current AUM: 453.71 Cr | -₹4.93 Cr | -1.09% | Invest |
 Quantum ESG Best In Class Strategy Fund Current AUM: 102.48 Cr | -₹5.7 Cr | -5.37% | Invest |
 Kotak ESG Exclusionary Strategy Fund Current AUM: 866.04 Cr | -₹9.82 Cr | -1.16% | Invest |
Top Stock added by Equity Esg Mutual Funds - December 2025
Over the last month, Britannia Industries Ltd has been added to the portfolios of 1 out of 10 Equity Esg mutual funds. This signals growing confidence in the stock’s long-term growth prospects among Equity Esg fund managers.
Fund | 1M Net Flow | |
|---|---|---|
 SBI ESG Exclusionary Strategy Fund Added new position | +₹78.79 Cr | Invest |
Top Stock sold by Equity Esg Mutual Funds - December 2025
In contrast, Tata Consultancy Services Ltd has been sold by 2 of 10 Equity Esg mutual funds in the last one month. This shift underscores a cautious approach by fund managers toward the stock, reflecting changing market dynamics.
Fund | 1M Net Flow | |
|---|---|---|
SBI ESG Exclusionary Strategy Fund Decreased shares by 34.42% | -₹57.77 Cr | Invest |
 Quant ESG Integration Strategy Fund Decreased shares by 100.00% | -₹8.84 Cr | Invest |
Sector allocation of Equity Esg mutual funds - December 2025
Over the last 6 months, Equity Esg category has seen increased allocation towards Real Estate, Basic Materials, Consumer Defensive sectors and allocation in Tech, Communication, Financial Services sectors has decreased
Sector | AUM |
|---|---|
 Financial Services Decreased by 4.96%, in last 6M | 3.58K Cr |
 Consumer Cyclical Increased by 7.14%, in last 6M | 1.87K Cr |
 Tech Decreased by 11.98%, in last 6M | 1.23K Cr |
 Industrial Decreased by 0.74%, in last 6M | 1.07K Cr |
 Basic Materials Increased by 46.10%, in last 6M | 832.92 Cr |
 Health Decreased by 1.29%, in last 6M | 622.56 Cr |
 Consumer Defensive Increased by 14.50%, in last 6M | 549.58 Cr |
 Communication Decreased by 11.63%, in last 6M | 341.16 Cr |
 Energy Decreased by 4.13%, in last 6M | 341.01 Cr |
 Utilities Increased by 0.65%, in last 6M | 305.78 Cr |
 Real Estate Increased by 180.02%, in last 6M | 206.21 Cr |
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