Hey there,
Let me take you back to the time I was figuring out my own financial path. I was working late nights, battling invoices, and wondering if I’d ever crack the code of investing in a way that aligned with both my values and my balance sheet. Sounds familiar?
This is why I started Truetal. And this blog is not just another “finance article.” It’s more like a letter – from one entrepreneur to another – about how you can grow your wealth responsibly without compromising your values. Today, we’re diving deep into the difference between Green Bonds and ESG Funds — two sustainable investing tools that could reshape your financial strategy and our planet’s future.
Why Sustainable Investing Matters (Especially to Us Business Owners)
Sustainable investing isn’t just a buzzword anymore. It’s a survival strategy — for your business, your values, and our collective future.
According to a 2024 study by Morgan Stanley, 85% of individual investors in the U.S. expressed interest in sustainable investing. What’s more, over $10 trillion in assets globally are now aligned with ESG principles. This means the market isn’t just growing — it’s exploding.
When I first heard this, I asked myself: “How can small businesses like mine participate without being overwhelmed?” That’s where Green Bonds and ESG Funds come into the picture.
What Are Green Bonds?
Green Bonds are like traditional bonds — you lend money, and in return, you get fixed interest payments. But here’s the twist: the money you invest is specifically used to fund eco-friendly projects like renewable energy, clean water, and pollution reduction.
Real Example:
In 2023, the New York MTA (Metropolitan Transportation Authority) issued a $500 million green bond to improve energy efficiency in subway systems. Investors earned stable returns and contributed to reducing urban emissions.
✅ Pros of Green Bonds:
- Stable and predictable returns
- Ideal for long-term investments
- Transparent use of funds (always green)
- Backed often by governments or corporations with strong credit ratings
❌ Cons:
- Less liquidity compared to mutual funds
- Returns can be slightly lower than traditional corporate bonds
What Are ESG Funds?
ESG Funds are pooled investments like mutual funds or ETFs that include companies meeting specific Environmental, Social, and Governance standards.
Real Example:
The Vanguard ESG U.S. Stock ETF includes companies with high ESG ratings. Over the past 5 years, its performance has been competitive with — and sometimes better than — traditional market indices.
✅ Pros of ESG Funds:
- Diversified across industries and companies
- Liquidity: You can buy/sell anytime like stocks
- Aligned with ethical standards
- Good for medium- and short-term goals
❌ Cons:
- Fund managers may have varying ESG criteria
- Can include companies with “borderline” ESG records
- Returns can fluctuate like any equity fund
Green Bonds vs ESG Funds – What’s Right for You?
| Feature | Green Bonds | ESG Funds |
| Risk Level | Low to Medium | Medium to High |
| Liquidity | Lower (like fixed deposits) | Higher (like stocks) |
| Transparency | High (project-based) | Varies (fund-based) |
| Best For | Long-term & stable investing | Short- to mid-term & diversified |
| Ideal Investor | Conservative & purpose-driven | Growth-focused & value-aligned |
So, What Should You Do as a Small Business Owner?
Here’s what I’d tell my younger self:
- If you want steady returns with a green touch, start with Green Bonds.
- If you’re aiming for growth with a conscience, explore ESG Funds through low-cost ETFs.
- Use platforms like Zerodha Coin, Groww, or even smallcase to access ESG-based funds.
- Allocate a small % of your business profits — even ₹5,000 a month — to sustainable investments. Let your money make a difference while it grows.
Why This Matters to Me (and Maybe to You Too)
I didn’t start my business just to file returns or chase invoices. I started Truetal because I wanted to make finance meaningful and simple for people like us — who hustle every day, take risks, and want to do better for our families, teams, and communities.
Sustainable investing is not just about returns. It’s about values. And whether you choose green bonds or ESG funds — what matters is that you’ve taken the first step.
Let’s Wrap It Up
Key Takeaways:
- Green Bonds = Safe, Stable, Project-specific, Long-term
- ESG Funds = Diversified, Growth-focused, Flexible, Short-to-mid-term
- Your investing journey doesn’t need to start big — just start aligned.
I hope this guide felt less like a blog and more like a chat between two passionate entrepreneurs.
If this resonated, share it with someone who needs clarity. And feel free to write to me — I’m here to simplify finance, one honest story at a time.
Mahesh Gadhave
Founder – Truetal.in
Your friendly guide to accounts, tax, and ethical money moves.
