Vol. 11, Special Issue 11, Part A (2025)

Abstract
Environmental, Social, and Governance (ESG) investing has become one of the most important components of sustainable finance globally. Countries with strong ESG practices typically demonstrate better long-term financial stability, enhanced investor confidence and greater global competitiveness. India has entered this ESG landscape, but with uneven development across the three pillars. Governance remains India’s strongest ESG dimension, while environmental and social indicators continue to lag behind global expectations. This paper examines India’s ESG maturity using real data from SES-NSE (2024) pillar scores and CRISIL ESG ratings for nine Indian ESG mutual funds. The analysis also includes three-year annualised returns sourced from AMC fact sheets and reputable online investment platforms. Correlation tests were performed to understand the relationship between ESG scores and fund performance. The findings show that while governance strength provides India with a foundation for future sustainability efforts, weak environmental and social performance reduces the effectiveness of ESG-driven investment strategies. The correlation between ESG scores and returns remains negative and statistically non-significant, indicating that ESG has not yet become a strong driver of financial outperformance in India. The paper concludes that for India to use ESG strategically to strengthen sustainable finance and global competitiveness, the environmental and social pillars must be significantly improved.