Some funds creating green portfolios, but investment routes won't change soon

Asset managers are trying to take environmental and social issues into consideration when selecting companies to invest in. Mutual fund managers were originally bound by law in the us and in Europe to invest in what will bring the highest return. However, as consumer consciousness started changing, mutual funds have been pushed to review their priorities.

In 2000, the uk government introduced a law requiring pension funds to disclose how they incorporate social responsibility aspects into their investment strategies, if at all. Consequently, rather than seeking short-term high returns, pension fund managers across the uk have been increasingly investing in what they believe will, by being sustainable, yield high returns in the long term.Similarly, the Norwegian parliament passed a law in 2005 requiring that the state pension fund (formerly the petroleum fund, in which the country pooled its oil profits), would only invest in sustainable and environmentally friendly companies across the world.

More recently, the Indian division of abn amro Bank launched a Sustainable Development Fund, a close-ended equity mutual fund; icici Bank announced a Rs100-crore fund to finance