~ 363 ~ ISSN Print: 2664-8792 ISSN Online: 2664-8806 Impact Factor: RJIF 8 IJRM 2025; 7(1): 363-372 www.managementpaper.net Received: 08-12-2024 Accepted: 06-01-2025 Dr. Trupti M Joshi Professor, MBA, Indira School of Business Studies, Pune, Maharashtra, India Dr. Madhavi Madireddy Professor & Director Aurora's PG College, MBA & MCA Rarnanthapur, Hyderabad, Telangana, India Corresponding Author: Dr. Trupti M Joshi Professor, MBA, Indira School of Business Studies, Pune, Maharashtra, India Evaluating ESG Mutual Funds in India: A data- driven approach to performance metrics Trupti M Joshi and Madhavi Madireddy DOI: https://www.doi.org/10.33545/26648792.2025.v7.i1d.301 Abstract Purpose: The study aims to benefit investors in making informed decision by identifying the best ESG mutual fund among eight funds available as an investment option. Design/Methodology/Approach: Quantitative technique used to determine the performance of eight ESG funds as of March 31, 2024, and since their inception, with the Nifty 50 index as the benchmark. Risk-adjusted metrics like Treynor’s measure, Jensen's alpha, Sharpe measure and Sortino measure were applied for performance evaluation. Findings: According to the performance study of ESG mutual funds, the research found that Quant Equity ESG fund has been able to outperform the peer fund, while the ICICI Prudential ESG Exclusionary strategy fund, Axis ESG integration, is positioned second and third among eight ESG funds. Research Limitations: The study was restricted to theme-based ESG mutual funds in India, and the performance was considered from April 1st, 2023, to March 31st, 2024, and since inception. External factors such as economic disruptions may have affected fund performance and influenced the outcome. Practical implications: The study offers insights to investors for making informed decisions based on risk-adjusted returns also offers a foundation for future research. Originality: The novelty of the study lies in calculating sophisticated performance metrics, including downside risk, Treynor's measure, Jensen's alpha, and Sortino ratio, using daily NAV data, which are usually not furnished in standard mutual fund factsheets. Keywords: ESG Fund, Sustainable investing, Nifty 50 index, Modern Portfolio Theory (MPT) for Sharpe measure & Treynor’s measure, Capital Asset Pricing Model for Jensen’s alpha, Sortino ratio 1. Introduction ESG is a subpart of the SDGs, which is a new concept that came into the limelight a decade ago and is gaining recognition across the globe. The study is on sustainable investment options available as an alternative investment opportunity for investors who are conscious enough “about environmental, social, and governance” issues. (Blank et al., 2016) [9] , (Billah MM, Hassan R, Haron R & Zain N.R.M. (Eds.) 2024 [7] ESG “(Environmental, Social, and Governance)” is also called “socially responsible investing", “impact investing.” And “sustainable investing,” (Yue et al., 2020) [66] Sustainable investing means putting our money into companies that strive to make the world better. (S. Singh, n.d.) These businesses are expected to create long-term wealth by compounding their profits for investors. (Latika & Gaikwad, 2022) [35] , The ESG mutual fund is an allocation that targets industries and companies whose primary focus is safeguarding the environment and communities where they work and ensuring that management and corporate governance meet high standards. ESG investors invest in companies willing to perform in these three areas companies that conduct business by considering environmental protection, nurturing societal values, and protecting stakeholders' interests. 1.1 ESG fund strategies SEBI has launched six new strategies of mutual funds under the ESG theme. In the current regulatory framework, the mutual fund companies or AMCs (Team, M. 2024) [59, 60] (Team, M.2024a) [59, 60] are allowed to start only one ESG thematic category for the equity schemes. Strategies introduced under the SEBI circular as under: SEBI Circular. International Journal of Research in Management 2025; 7(1): 363-372