The Institute of Company Secretaries of India (ICSI) is planning to introduce a Stewardship Code for institutional investors to promote responsible investment in September this year.

ICSI is currently working on the Stewardship Code or Principles for both domestic and foreign institutional investors. The Code will be inclusive of environmental, social, and corporate governance (ESG) compliance.

“Stewardship Code is for institutional investors. It is all about responsible investment, which is especially focussed on sustainability of the environment. It is voluntary and not mandatory for domestic and foreign institutional investors. It is expected that institutional investors will be taking note of the Code or the Principles,” ICSI President B. Narasimhan said here on Friday.

ICSI Secretary Asish Mohan said the institute is working on the Code so that the investments are towards sustainability also. “There are many investors in India and outside who are big institutional investors. They put in money in different companies in India. Earlier, these investors were primarily looking at Return on Equity (ROE) or Return on Investment (ROI). Now, the trend of all these investors has been shifted towards sustainability also. Businesses should be run in a sustainable manner and ESG compliance should be there. So that the resources are being used in such a manner that interest of future generations is also kept in mind,” Mohan said, adding ICSI is bringing in the Stewardship Principles so that the investors will be making sure that they follow these principles when they invest in companies.

According to Mohan, ICSI will be the first Indian institution to launch the voluntary Stewardship Principles. “We will be releasing the Code in September. It will be a guideline for investors,” Mohan told businessline.

Many Indian companies in the future are expected to be ranked on the basis of stewardship principles and ESG performances, he added.

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