Ethical Investing and ESG Mutual Funds: Lessons from Dharmic Finance Principles

Abstract: The rapid adoption of sustainable investing has resulted in a rise in the popularity of Environmental, Social, and Governance (ESG) mutual funds across the world. These funds are meant to facilitate investment practices that emphasize the protection of the environment, social equity, and good governance. The ancient Indian economic philosophies along with its Dharmic concepts have relevance even today and provide wisdom in ethical or fiduciary finance. This paper discusses how investment objectives in ethical investing can be achieved by applying the concepts of Dharma, Artha, Karma, Sattva, and Ahimsa. This paper seeks to broaden the understanding of the merger of spirituality and ethics with finance by analyzing the ESG mutual funds through the lens of these ancient principles. The study examines the correspondence of the Dharmic finance concepts with ESG concepts and demonstrates how such combinations can achieve sustainable wealth creation. The paper also examines the consequences of this integration on the global economy and its potential to transform the financial markets, society, and the environment.