Alternative Investment Funds, or AIFs, are poised to play a pivotal role in driving the adoption of ESG practices within India’s unlisted companies.
Ruchi Chojer, Executive Director, SEBI, recently expressed this sentiment.
Chojer said that AIFs must align themselves with evolving global ESG norms, particularly given that a significant portion—approximately 40%—of their capital originates from foreign investors. These international investors increasingly expect high standards of disclosure and adherence to sustainable practices from their portfolio companies.
The call for AIFs to lead the ESG charge underscores SEBI’s broader vision for a more responsible and transparent
financial ecosystem.
By integrating ESG considerations into their investment strategies and due diligence processes, AIFs can not only meet the expectations of their global limited partners. They also contribute significantly to enhancing the sustainability profile of India’s private sector.
This move is expected to cascade down to unlisted firms, encouraging them to adopt more robust ESG frameworks, improve their environmental footprint, foster better social practices, and strengthen their governance structures. Ultimately, this will lead to more resilient and attractive investment opportunities.
