Green Star Fund Ranking (GSR)
Peer-relative fund assessment — Framework and Methodology
IiAS Sustain's Green Star Fund Rankings (GSR) provide a portfolio-based, comparative assessment of the ESG profile of mutual fund portfolios. The rankings evaluate the ESG characteristics of a fund's underlying holdings and its overall ESG alignment, enabling peer-relative benchmarking within each SEBI mutual fund category. Funds are assigned between one (lowest) and five (highest) Green Stars.
Company-Level ESG Ratings
The GSR is built on company-level ESG ratings assigned by IiAS Sustain using a proprietary, indicator-driven framework across three core pillars:
Environmental
- Emissions and Carbon Footprint
- Energy, Resource Management and Circularity
- Sustainable Sourcing and Business Resilience
- Technologies for Social Impact
Social
- Workforce Well-being
- Workforce Diversity
- Product and Stakeholder Responsibility
Governance
- Policies
- Responsibilities of the Board
- Disclosures and Transparency
- Board Diversity
- Stakeholder Management
The assessment universe comprises the top 500 listed companies by market capitalisation as of 28 March 2025. Data is sourced from publicly available disclosures — including Business Responsibility and Sustainability Reports (BRSR), annual reports, integrated and sustainability reports, and company websites — and is standardised and normalised to enable comparability across sectors and issuers.
Indicators are evaluated using a combination of quantitative metrics and qualitative analysis, with sector-specific weightings applied to reflect differences in ESG risk exposure. Indicator-level scores are aggregated into pillar scores (E, S, G) and combined into an overall ESG score.
The base score is further refined through positive and negative screening factors, and a controversy overlay that accounts for ESG-related incidents, classified as none, moderate, serious, or severe. The final ESG Composite Score is mapped to a scale ranging from A+ (highest) to D (lowest).
From Company Ratings to Fund Ranking
Fund-level ESG scores are derived by aggregating and rolling up company-level ratings using a holdings-based approach. Each portfolio constituent's ESG rating is weighted by its proportional allocation within the fund, producing a portfolio-level score that reflects both stock selection and portfolio construction. To ensure analytical robustness, IiAS Sustain applies a tight set of eligibility criteria, as detailed below.
Eligibility Criteria
To be ranked, funds must meet all of the following criteria:
- At least 80% of AUM covered by IiAS ESG ratings
- Minimum track record of three years
- AUM greater than ₹500 million (₹50 crore)
- A minimum of 20 funds in the SEBI fund category
Peer-Relative Ranking
Funds are ranked on a relative basis within their respective SEBI mutual fund categories, ensuring comparability among funds with similar investment mandates and risk-return profiles. Based on their relative positioning, funds are assigned Green Star ratings from one to five stars.
Multiple plans of the same scheme (growth, IDCW, direct, regular, etc.) are consolidated and treated as a single scheme. Only categories with a minimum of 20 eligible funds are included to maintain statistical robustness. Accordingly, small-cap, contra, dividend yield, and similar categories are excluded due to limited peer sets; index funds are excluded given limited variation in portfolio composition; and sectoral/thematic funds (infrastructure, pharma, etc.) are excluded as scores are largely driven by sector allocation. Where appropriate, categories are combined — flexi-cap and multi-cap funds, for instance, are evaluated together, while focused funds (including ESG-focused strategies) form a distinct category.
Data Source
Mutual fund holdings and classification data are sourced from Value Research and remain their sole and exclusive property.
Important Notes and Limitations
The GSR is a backward-looking measure based on historical portfolio disclosures. It reflects a weighted average of the ESG ratings of underlying holdings and does not constitute an assessment of financial performance or returns. It is intended as a preliminary analytical tool for ESG comparison and should not be construed as investment advice or a recommendation to invest in or divest from any fund or underlying company.
IiAS Sustain reserves the right to modify its methodology from time to time.
Green Star Fund Ranking Scale
Funds are assigned a relative Green Star Fund Ranking based on their percentile rank within the same SEBI mutual fund category. The ranking reflects how a fund compares to its peers, not an absolute ESG score.
| GSR | Definition |
|---|---|
Leader The underlying portfolio demonstrates superior alignment with ESG parameters. Based on its portfolio profile, a 5-Green Star fund ranks in the top 10% of its SEBI fund category. | |
Strong The underlying portfolio reflects strong ESG metrics across key parameters. Based on its portfolio profile, a 4-Green Star fund ranks in the top 30% of its SEBI fund category. | |
Good The underlying portfolio exhibits sound and dependable ESG metrics. Based on its portfolio profile, a 3-Green Star fund ranks in the top 50% of its SEBI fund category. | |
Fair The underlying portfolio meets baseline ESG expectations. Based on its portfolio profile, a 2-Green Star fund ranks in the top 70% of its SEBI fund category. | |
Basic The underlying portfolio shows limited ESG strength and may require improvement across key parameters. Based on its portfolio profile, a 1-Green Star fund ranks below 70% of its SEBI fund category. | |
Unrated | Unrated IiAS will not assign a ranking to a fund if:
• Less than 80% of the portfolio is in companies rated by IiAS Sustain;
• The fund has been in existence for less than three years;
• The fund does not have a corpus of Rs 500 million (Rs 50 crores);
• The fund category comprises fewer than 20 funds. |
Benefits
- Track your portfolio beyond just financial numbers
- Track SEBI-aligned stewardship practices
- Peer benchmarking for smarter fund selection
- Transparent insights amid evolving regulations