SBI Mutual Fund, one of the leading mutual fund houses in the country, focused on long-term wealth creation for investors, becomes the first fund house in India to implement the ESG framework. Post this implementation, SBI Magnum Equity Fund has been re-positioned as SBI Magnum Equity ESG Fund, effective 16th May 2018.
ESG Framework is an approach to investment where environmental, social & governance (ESG) factors, in combination with financial considerations; guide the selection of portfolio and management of investments.
The total AAUM of SBI Magnum Equity ESG Fund stands at INR 2,116.32 crore as on May 31, 2018.
According to Ms Anuradha Rao, Managing Director & CEO, ‘’ESG compliance marries true values of our company keeping in mind the benefits to all its stakeholders. Hence, we decided to integrate this framework into our investment decision making process a few years ago. It was a challenge to implement the framework in India due to the lack of available data and disclosures to felicitate the evaluation of companies on ESG parameters. We are happy that our commitment made this possible’’
Explaining the investment philosophy and framework of the SBI Magnum Equity ESG Fund Mr. Navneet Munot, ED & CIO said, “Investment managers like us owe a fiduciary duty, first to investors and then to the larger community they operate in, which can probably be best served by not trying to maximise short term profitability, but by creating an environment which ensures optimum long term returns and growth. SBI MF has a comprehensive check list of over 50 parameters from across the Governance, Environmental & Social aspects of a particular company’s management of its affairs, with the emphasis being in that sequence’’
Mr. D.P Singh, ED & CMO said ‘’Our ‘ESG Framework’ helps us delve into a company’s management practices, culture and risk profile and helps us to question the management if the board’s decisions are harmful to the long-term shareholder. ESG themed portfolios are built for retail investors by avoiding investment in a list of restricted business segments’’
The fund objective is to provide investors with opportunities for long-term growth in capital through an active management of investments in a diversified basket of companies following Environmental, Social and Governance (ESG) criteria
It will be a Thematic ESG Fund, with Large Cap bias and benchmarking itself with Nifty ESG Index.
Mr Ruchit Mehta is the Fund Manager for SBI Magnum Equity ESG Fund.