ESG ETFs in India (2026)
Environmental, social, and governance metrics now play a larger role in how indices classify companies. ESG ETFs turn these rule-based filters into exchange-traded portfolios and let investors follow sustainability-linked allocations within transparent frameworks. This article explains how ESG ETFs work and covers the benefits, risks, and evaluation factors that shape outcomes.
List of Best ESG ETFs in India for 2026
ESG ETF Stock Screener
ESG ETF Stock Screener: Analyse & Filter Indian Stocks on Tickertape
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| NameStock (1)↓ | ↓Sub-SectorSub-Sector↓ | ↓Market CapMarket Cap↓ | ↓Close PriceClose Price↓ | ↓PE RatioPE Ratio↓ | ↓1D Return1D Return↓ | ↓1M Return1M Return↓ | ↓6M Return6M Return↓ | ↓1Y Return1Y Return↓ | ↓PB RatioPB Ratio↓ | ↓Return on EquityReturn on Equity↓ | ↓ROCEROCE↓ | ↓Dividend YieldDiv Yield↓ | ↓Debt to EquityDebt to Equity↓ | ↓Volatility vs NiftyVolatility vs Nifty↓ | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1. | Mirae Asset Nifty 100 ESG Sector Leaders ETFESG | EquityEquity | -- | 39.2539.25 | -- | 0.770.77 | -8.44-8.44 | -9.31-9.31 | 0.100.10 | -- | -- | -- | -- | -- | 1.011.01 |
Disclaimer: Please note that the above table is for informational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing. The data is derived from Tickertape Stock Screener and is subject to real-time updates.
Selection criteria: Sub-sector: Equity | Market Cap: Sorted from Highest to Lowest
Selection criteria: Sub-sector: Equity | Market Cap: Sorted from Highest to Lowest
What are ESG ETFs?
ESG ETFs are exchange-traded funds that choose companies using environmental, social, and governance criteria. These indices screen businesses for measures such as carbon intensity, labour practices, and board structure. Investors gain rule-based sustainability exposure through units that trade on stock exchanges.
Overview of Top ESG ETFs in India
Mirae Asset Nifty 100 ESG Sector Leaders ETF
This ETF tracks an index that selects companies from the Nifty 100 based on environmental, social, and governance performance within each sector. The framework retains industry representation while favouring higher ESG scores. Investors gain exchange-traded exposure to sustainability-tilted large-cap leaders.
How to Invest in ESG ETFs?
Here’s how you can invest in ESG ETFs using Tickertape -
- Create an account on the Tickertape or log in if you already have one.
- Open ESG ETFs Screener
- You can review this data to evaluate each ETF’s performance trends and determine whether they align with your investment thesis.
- Once you’ve decided on an ETF, you can place a buy order through your brokerage account linked to Tickertape.
Further, you can analyse your overall portfolio and potential red flags in it by connecting it to Tickertape. Check out detailed analysis of your portfolio now!
Taxation on ESG ETF
Capital gains tax on equity ETFs depends on how long the units are held. The table below summarises the rates for short-term and long-term holdings.
| Holding Period | Tax Treatment |
|---|---|
| Short-Term (< 12 months) | Gains taxed at a flat rate of 20%. |
| Long-Term (> 12 months) | Gains taxed at 12.5%. Exemption applies to the first ₹1.25 lakh of long-term gains across all equity assets in a financial year. |
How Do ESG ETFs Work?
- Index screening:Providers begin with a parent universe such as large-cap or broad-market stocks. They apply environmental, social, and governance filters to remove or downgrade companies based on predefined metrics like emissions, controversies, or governance quality.
- Score-based selection:Eligible companies receive ESG scores from specialised research agencies. The Nifty 100 ESG index then selects higher-ranked names within sectors or assigns weights that favour stronger performers.
- Portfolio replication:The ETF buys securities in proportions similar to the index. When company scores, controversies, or rankings change, periodic reviews update constituents and weights.
- Market trading:Investors buy and sell ETF units on exchanges throughout trading hours. Prices move according to both underlying stock performance and market demand.
Types of ESG ETFs
Exclusion-Based ETFs
These ETFs begin with a broad market universe and remove companies linked to specified activities such as tobacco, controversial weapons, or high carbon intensity. The goal is to maintain market-like exposure while avoiding businesses that fail predefined ethical or environmental thresholds.
Best-in-Class ETFs
Instead of removing entire industries, these strategies compare companies within the same sector and prefer those with relatively stronger ESG scores. This approach allows representation across industries such as energy or metals while tilting toward firms with better disclosure and governance practices.
Thematic Sustainability ETFs
ESG fund concentrate on businesses connected to long-term sustainability trends like renewable energy, waste management, or climate solutions. The portfolio narrows to companies whose revenues directly relate to environmental or social transformation themes.
Governance-Focused ETFs
Here, selection gives greater importance to board quality, shareholder rights, audit standards, and transparency. Such indices often aim to identify firms where management structure and accountability mechanisms meet higher institutional benchmarks.
Advantages of Investing in ESG ETFs
Sustainability Screens
ESG ETFs use published screening frameworks (e.g., exclusion of high carbon emitters, labour controversies) and select companies that meet defined environmental, social, and governance thresholds. This ensures portfolio construction aligns with specific sustainability filters rather than discretionary stock picks.
Balanced Exposure
Many ESG benchmarks start with a broad universe (such as Nifty 100) and apply best-in-class filters, retaining sector balance. This can reduce concentration in carbon-intensive segments while maintaining exposure to large industries that score well on ESG metrics.
Method Transparency
ESG ETF methodologies and constituent ESG scores are publicly available, which allows investors to see how holdings rank on criteria such as board independence or emissions intensity. The openness of screens and weights helps build understanding of sustainability positioning.
Risks of Investing in ESG ETFs
Index Construction Bias
Because ESG indices apply exclusion and inclusion criteria, they may systematically underweight or exclude certain sectors (e.g., energy). This divergence from traditional market weights can affect performance when those sectors outperform.
Scoring Variation
ESG ratings and controversies data vary across providers. One ETF may rely on a specific scoring vendor, which influences which companies qualify. Differences in underlying ESG data can lead to variation in portfolio makeup and outcomes versus other benchmarks.
Potential Tracking Gaps
ESG variants of standard indices may behave differently from their vanilla counterparts, especially during sector rotations. These structural differences can result in tracking gaps relative to broader indices during certain phases of market cycles.
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Factors to Consider Before Investing in ESG ETFs
Screening Methodology Details
The framework used by the index determines how ESG criteria are interpreted, which thresholds apply, and how exclusions operate. Some approaches emphasise carbon intensity, while others prioritise governance standards or controversy assessments. These design choices shape portfolio coverage and risk characteristics.
Sector and Factor Tilt
Weight differences relative to parent benchmarks highlight how exposure changes after ESG filters apply. Such frameworks can raise allocations to areas like healthcare or technology while reducing representation from energy or materials, influencing volatility and return behaviour.
Data Updates
The choice of scoring provider and the timing of index reviews affect how current the portfolio remains. More frequent updates allow constituent selection to reflect evolving disclosures, ratings adjustments, and sustainability developments.
Conclusion
ESG ETFs combine market exposure with systematic sustainability screening. Portfolio behaviour depends on how indices define eligibility, apply exclusions, and maintain sector balance relative to traditional benchmarks. Differences in scoring models and rebalancing rules can lead to return patterns that diverge from broad market funds.
Investors can review holdings, sector tilts, and methodology details using the Tickertape Stock Screener to understand how ESG strategies align with wider portfolio objectives.
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Frequently Asked Questions on ESG ETFs
What is ESG in ETF?
ESG in an ETF refers to environmental, social, and governance criteria used to select and weight companies. The index evaluates disclosures such as emissions, labour standards, board practices, and controversies before determining inclusion.Which ESG ETF is best?
The Indian market currently has limited ESG ETF availability, with the Mirae Asset Nifty 100 ESG Sector Leaders ETF being a prominent option. Evaluation therefore centres on index methodology, scoring framework, sector exposure, liquidity, and tracking behaviour rather than wide product comparison. Disclaimer: This is for informational purposes only and does not constitute investment advice or a recommendation.What is the Nifty 100 ESG index?
The NIFTY 100 ESG starts with companies from the Nifty 100 and applies ESG filters and scoring systems. Higher-ranked firms within sectors receive preference, while others may see reduced representation.Is ESG ETF good?
ESG ETFs provide exposure to companies that meet defined sustainability parameters. Outcomes may differ from traditional benchmarks because exclusions and score-based tilts can change sector and stock weights. Disclaimer: Suitability varies based on individual objectives, beliefs, and risk profile. This content is not a recommendation.How is ESG performance measured in an ETF?
Index providers collect data from company reports, regulatory filings, and independent research agencies. They translate this information into scores that influence eligibility, ranking, and portfolio weights during scheduled reviews.What is the difference between ESG funds and ETFs?
ESG funds and ESG ETFs both use environmental, social, and governance criteria for portfolio construction, but they differ in structure and trading. Mutual funds transact at end-of-day net asset values, while ETFs trade on exchanges throughout market hours with live pricing and liquidity.
