The Security and Exchange Board of India set rules for ESG funds to apply from 1 October 2024. Under these rules, at least 80% of an ESG fund's assets under management must be invested in line with its ESG strategy (Article 4.1.2). At least 65% of the fund's AUM must be invested in companies with comprehensive business responsibility and sustainability reporting disclosures (Article 4.2.1). If not compliant by 1 October 2024, the ESG fund has until 30 September 2025 to ensure compliance. However, during that one year, the fund should not undertake any fresh investments in companies without assurance on Business Responsibility and Sustainability Reporting Core disclosures.
This circular is issued in accordance with Section 11(1) of the Securities and Exchange Board of India Act, 1992, read with the provisions of Regulation 77 of SEBI (Mutual Funds) Regulations, 1996.
