Bajaj Allianz Life Insurance has launched the Bajaj Allianz Life Sustainable Equity Fund.
The life insurer announced in a press release that the fund will offer investors an opportunity to invest in companies that are socially responsible and have been evaluated on relevant environment (E), social (S) and governance (G) factors.
The fund has been benchmarked to the Nifty 100 ESG Index and will invest in businesses that have high ESG scores and will concentrate on stocks that are included in the benchmark ESG indices.
It further said that Bajaj Allianz Life Insurance will evaluate organisations based on its internal proprietary ESG factor model, which will assess data, such as public disclosures, investor presentations, and annual reports, among others
Thereafter, ESG principles combined with the existing investment decision-making process will allow screening of stocks for the fund, the life insurer said in the press statement.
The Bajaj Allianz Life Sustainable Equity Fund will be available with the company’s flagship unit-linked insurance plans (Ulips). These are:
1] Bajaj Allianz Life Goal Assure - A unit-linked non-participating life insurance plan.
2] Bajaj Allianz Life Smart Wealth Goal - A unit-linked non-participating life insurance plan.
3] Bajaj Allianz Life Future Wealth Gain - A non-participating, unit-linked, individual, endowment life insurance plan.
4] Bajaj Allianz Life Longlife Goal - A unit-linked non-participating whole life insurance plan.
5] Bajaj Allianz Future Gain - A unit-linked endowment insurance plan
Tarun Chugh, managing director and CEO, Bajaj Allianz Life Insurance, said: “The Bajaj Allianz Life Sustainable Equity Fund will strongly resonate with our customers. It offers them a strong proposition to fulfil life goals while ensuring that the ESG quotient of their decisions remain strong. This will enable us to collectively contribute towards building a strong ESG ecosystem. At Bajaj Allianz Life Insurance we will continue to focus on every aspect of our customers’ requirements to ensure their life goals journey remains strong with us.”
Of late, ESG funds have caught the attention of the market as well as investors, though it is still at a nascent stage and the percentage is miniscule compared to the overall market size.
Capital market regulator, the Securities and Exchange Board of India (Sebi) has also come out with a series of guidelines for asset management companies (AMCs) issuing ESG funds to comply with.
It has said that as ESG funds fall under the thematic category, so they should invest not less than 80 per cent of the total ESG assets under management (AUMs) in securities following ESG as a theme. Also, the residual portion of the investment should not be starkly in contrast to the philosophy of the scheme from the theme.
Further, issuers of green debt securities should also avoid greenwashing, Sebi said in another notification.
It said that issuers of green bonds shall not use misleading labels, hide trade-offs, or, cherry pick data from research to highlight green practices, while obscuring others that are unfavourable.
Issuers should ensure that the funds raised through green bonds are not used for purposes that would not fall under the definition of ‘green debt security’ under the non-convertible securities (NCS) regulations. If issuers notice that the capital raised from green bonds is being invested outside of the above-mentioned asset classes, they should inform investors and allow for early redemptions if majority of investors demand it, Sebi said in the circular.