Globally and in India investors now demand corporates to discharge not only their societal concerns but also environmental and governance obligations. Corporate social responsibility gained momentum long back, in India Companies Act 2013 made it mandatory for certain companies to invest 2% of the net average profits of the last three years on social activities. But now investors are also focussing on climatic and good governance factors. Post Covid-19, sustainability has been buzzword. Everyone in general and informed investors in particular want to invest in corporates having good environmental, social and governance impact. This brings into picture ESG investing. ESG investing means investing in corporates which work towards achieving sustainability by following Environmental, Societal and Governance parameters. ESG investing may be in form of stocks, bonds or mutual funds. Since Mutual Fund offer advantages of diversification and penny investing, the paper seeks the evaluate the growth of ESG funds and the challenges faced by ESG investors in India. The study found that though post covid 19, ESG investing got a boost but still the sector is in its nascent stage. There is lack of awareness regarding ESG scores and lack of long-term data to adequately evaluate performance of the fund. Nevertheless, in long term, ESG mutual funds will provide the much-needed finance to achieve sustainable goals.

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Keywords: Governance, Environment, Social, Sustainability, Covid 19, ETF, Fund of Funds.