What Role Does an Investment Bank Play in ESG Funds?

1. What Role Does an Investment Bank Play in ESG Funds? For any business to grow, having enough capital and funds is very important. The initial funds or the capital that they start their business with generally acts as a cushion for the business to rely on, in case something goes wrong. These funds also help the entrepreneur to take decisions that might be a little risky but at the same time give them good returns. Once we see the business starts to have good profit they might approach an investment bank which first studies the financial portfolio of their clients, sees how strong it is, what the present assets and liabilities are and what the financial goals of the company are. Once this is done, the investment banking firm then sits with the client and takes them through various means of investment. In this they also explain the client the risks and the benefits that are involved in the same. Also, an investment banker is the one to whom the authority of making decisions in terms of the investment for the specific amount is given. For this, they constantly must be on their toes with the information about what is happening in the financial market. They anticipate whether the said asset is going to prove to beneficial to the customers or not. This type of anticipation comes only with experience, thus making the job of an investment banker both strenuous and stressful. When you look at any of the investment banks, they also provide services when it comes to dealing with hedge funds. An investment bank is no less than a guiding force for their customers in banking smartly. Investment banks usually deal with the HNIs or bigger firms and deal in millions. Therefore, the pressure of performance is massive. The HNIs and bigger corporations are looked at also with the perspective as to how much they give back to the society. This is nothing but responsible investing which is an amalgamation of environmental, social and governance ESG funds in India, which plays a huge role in investment process and the decision making. It usually covers a great area of issues that were earlier not a part of financial analysis, but now are very much relevant. The MNCs have a responsibility of how they deal with the rapidly changing climate, what they are doing to make it better, how well are they having their water management in place, how they treat their employees and workers, if they provide any additional facilities for the underprivileged and a lot more. Also, it is necessary to note that these should not be confused with CSR (Corporate Social Responsibility). In ESG funds, investment in all the things mentioned above is only going to lead in an increase in their credibility and will have a positive impact on the view that people have about them. The investment banking companies help the bigger firms take this decision on investment. www.avendus.com