Increased focus on sustainability and ethical behaviors has led to increased ESG factors incorporated into investment decisions. This study looks at how ESG factors affect the choices made by retail investors in the Indian stock market. Based on an examination of secondary market data, the study examines how ESG performance affects stock selection, portfolio management, and the uptake of financial products with an ESG theme. The data suggest that knowledge of ESG amongst Indian retail investors is increasing but is constrained, especially in urban regions. ESG issues particularly impact the stock selection process because investors tend to pick companies involved in renewable energy, technology, and healthcare sectors. There is a growing inclusion of ESG-themed funds within the respective portfolios, although uptake is restricted due to access and varying levels of ESG disclosures. The study focuses on the superior performance and risk reduction capabilities of ESG investing, which provided competitive returns and reduced volatility relative to standard funds.
International Journal of Research in Finance and Management
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