In 2025, almost every Indian is looking to grow their money while some of them are also making good contributions to the planet by investing in ESG (Environmental, Social, and Governance) funds. Sustainable Investing in 2025 Top ESG Funds for Indian Retail Investors These types of funds are ideal for those who care about both the planet and money. ESG funds are becoming the best way to manage money in India.
Let’s explore some of the top ESG mutual funds in India for 2025 and how they can boost your personal finance management strategy.
Why ESG Funds Matter for Indian Investors
ESG funds focus on investing in companies that are good for our ecosystem, manage their employees well, and follow balanced rules on business. As India progresses towards its goal of zero carbon emission by 2070, these companies are likely to rise with faster pace and come across less legal risks.
This makes ESG mutual funds ideal for long-term investors in India. Younger investors, especially millennials and GenZ, are taking the lead, with over 60% interested in these eco-friendly investment options for better and balanced returns.
Sustainable Investing in 2025 Top ESG Funds for Indian Retail Investors
Here are some of the best ESG mutual funds in India you can choose in 2025:
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SBI ESG Inclusion Fund
It mainly focuses on investing in companies with strong ESG scores all over different industries. It has been consistent with the returns and handles more than ₹5,000 crore. -
ICICI Prudential ESG Fund
This fund chooses companies by keeping the approach of eco-friendly resources. It also offers good diversification of sectors and usually has a low fee, which is around 1.2%. -
Quantum ESG Best In Class Strategy Fund
This ESG fund is a great pick for investors who are looking for regular growth with responsibility. It gained over ₹24 crore in assets in just 6 months. -
Aditya Birla Sun Life ESG Fund
This fund keeps their main focus on green energy and other future-focused concepts, and it is best for those who care about the environment. -
Axis ESG Equity Fund
This ESG fund invests in both Indian and global companies and it is ideal for creating diversity to your personal finance goals.
Make sure to check latest AUM, returns, and fund documents on official AMFI or SEBI portals before investing. Visit: https://www.sebi.gov.in/
How to Choose the Right ESG Fund
Here’s how you can easily choose the right ESG fund in India so that you can make these funds the best way to manage money sustainably:
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Match Your Values
Always choose a fund that strengthens the causes you care about like clean environment and good behavior with the employees. -
Check Returns
Before investing in any fund, make sure to check their 3 to 5 years of performance in the market. It just gives you an idea, not the confirmed returns. -
Compare Fees
Compare expense ratios of different funds, because lower is the expenses ratio, higher will be your returns. -
Use ESG Scores
You can check the ratings, scores, and reviews from trusted sources like MSCI or Sustainalytics for ESG ratings in India. -
Diversify
It will be a good strategy if you mix ESG funds with other investments for more balance on your returns and risks.
Green Bonds vs ESG Mutual Funds: Best Sustainable Investing Options in 2025
Challenges to Watch
Some of the ESG funds have limited options on stock and they have slightly higher fees. Always be careful of false green claims, which is called greenwashing. And last but not the least, make sure that you check reports like SEBI’s BRSR (Business Responsibility and Sustainability Report) or any third-party ratings.
Conclusion
ESG funds have always helped you in a better future while growing your money. They are ideal tools for personal finance in India if you really care about doing good while doing well at the same time. Just make one thing sure that you choose funds wisely, stay informed, and make eco-friendly part of your personal finance management journey.