(Bloomberg) -- India has authorized the country’s asset managers to launch multiple plans tied to ESG, potentially giving a boost to a globally-hot theme of investing that is still in its infancy in Asia’s third largest economy.

Fund managers will be allowed to launch plans under six strategies of environmental, social, and governance investing with immediate effect, the nation’s market watchdog said in a circular dated July 20. Previously, funds were permitted to launch only one ESG investing vehicle under the thematic category.

The new strategies include investing in companies and issuers that perform better than peers on one or more performance metrics related to ESG matters and facilitate environmental transition, according to the Securities and Exchange Board of India. 

Funds should invest at least 80% of their assets in equities and equity-related products, according to the regulator’s circular. 

Even as ESG investing has gained popularity as one of the hottest strategies globally, it has struggled to acquire a substantial foothold in emerging economies like India, which is still largely reliant on fossil fuels such as coal for its needs.

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