Firms with green, social focus fetch better returns

Low scores for financial services are driven primarily by banks

Firms that focus on managing their environmental, social, and governance risks have given better returns than others that rank lower on these. 

The Morningstar India Sustainability Index, which tracks the performance of Indian companies that exhibit high ESG (environmental, social, and governance) levels, has returned 14.8 per cent in the four-year period between October 2012 and September 2016 compared with 13.7 per cent for the Morningstar India Index. 

The index is derived from large-capitalisation and mid-capitalisation subsets of the Morningstar India Index, representing 90 per cent of market capitalisation. The top five constituents of the index are HDFC, representing 10