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Baroda BNP Paribas launches New ESG Mutual Fund in India

Takendra Verma
Last updated: 19/02/2026 2:25 PM
Takendra Verma
Published: 19/02/2026
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As climate change affects cities, agriculture, and global supply chains, sustainability has become essential for companies around the world.

Contents
ESG Adoption is Rising Rapidly in IndiaHuge Global Opportunity in ESG InvestmentsIndia’s Green Transition and Policy SupportWhy ESG Investing is Gaining MomentumFund Strategy and Key FeaturesHow to Invest

Rising operating costs, environmental risks, and stricter rules 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 a chance to build long-term wealth by investing in companies that perform strongly on ESG (Environmental, Social, Governance) parameters.

ESG Adoption is Rising 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 required by regulation. Around 10 years ago, this number was 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 India. Companies will need to assess and certify their key sustainability disclosures.

Today, companies are not only following regulations but also integrating ESG into their business operations to:

Reduce risks related to environmental and government regulations

Strengthen business and encourage innovation

Improve brand credibility and investor confidence

Attract long-term investment from India and abroad

Huge Global Opportunity in ESG Investments

ESG-related investments are growing fast worldwide:

Annual global clean-energy investment may reach about US$2.3 trillion by 2025

The circular-economy market may reach US$4.5 trillion by 2030

By 2050, about 68% of the world’s population is expected to live in cities, increasing demand for green infrastructure and sustainable housing

India’s Green Transition and Policy Support

India has pledged to achieve net-zero emissions by 2070. Programs such as the National Green Hydrogen Mission are expected to generate investments of about ₹8 lakh crore.

India has also started implementing a carbon credit trading scheme, which will be fully applied across nine sectors by 2026.

This will 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 while choosing investments.

Historical data shows this approach has worked well. Over the last 10 years, the Nifty 100 ESG Total Return Index outperformed the Nifty 100 TRI in 7 out of 10 years.

It also beat the Nifty 100 TRI in 1-year, 3-year, 7-year, and 10-year returns up to January 31, 2026.

Research by Baroda BNP Paribas Mutual Fund shows ESG indices have delivered:

Higher rolling returns

Lower volatility

In the past two years, the Nifty 100 ESG Index had lower volatility than the Nifty 100 Index on about 85% of market days.

CEO Sanjay Grover said Indian investors are increasingly choosing thematic strategies, especially sustainability-focused ones.

According to him, investors now want not only good returns but also investments that help build a strong and sustainable future.

Fund Strategy and Key Features

To help investors benefit from this trend, the Baroda BNP Paribas ESG Best in Class Strategy Fund has been launched. Its benchmark will be the Nifty 100 ESG Index.

The fund will invest in companies that:

Operate sustainably

Have strong fundamentals

Show long-term growth potential

The investment approach combines:

ESG ratings from a SEBI-registered external ESG rating agency

Detailed fundamental research

ESG research

Jitendra Shriram, Senior Fund Manager – Equity at Baroda BNP Paribas Asset Management India, said the fund will select only 50 companies from about 5,000 listed companies through a four-step process.

Companies that adopt ESG principles in management and operations have shown consistent performance across different market and economic conditions.

The scheme will invest in Indian companies with better ESG ratings than peers in their sector. The aim is to fully integrate ESG into investment decisions and identify future-ready businesses.

Companies with strong ESG practices usually perform better in today’s complex and volatile environment. Therefore, the fund offers investors exposure to businesses focused on long-term sustainability.

How to Invest

During the NFO (New Fund Offer), investors can invest:

Lump sum: minimum ₹1,000

Monthly SIP: ₹500

Quarterly SIP: ₹1,500

This fund gives more investors an opportunity to invest in companies with strong ESG performance and create wealth over the long term.

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