ESG funds gaining traction in India, but doubts about them abound

With corporate governance suddenly leaping to forefront of newspaper headlines in India - from ICICI Bank to IL&FS - ESG funds in India may find more takers than the cynics suggest

The $1 billion fund announced recently by three former Tata executives — Mukund Rajan, Alan Rosling and Govind Sankaranarayanan — in alliance with Quantum Advisors wants to invest in small- and mid-cap listed stocks. But this is only part of their strategy: They also want to play an active role in the companies in which they invest to ensure they comply with the objectives of the fund.

On the other hand, KKR-backed Avendus Capital, which is raising a similar amount, wants to take minority stakes in the top 100 companies by market cap. It, too, will attempt to influence management