The Securities and Exchange Board of India (SEBI) has set up a working group to examine the current regulatory framework applicable to ESG Ratings Providers. This follows SEBI’s earlier introduction of regulatory oversight for ESG ratings providers through its 2023 Master Circular.
The regulator stated that the review has been initiated after receiving input from stakeholders and market participants. The working group will evaluate the existing framework and propose recommendations aimed at strengthening transparency and trust in ESG ratings.
This development comes amid increased global regulatory focus on ESG ratings and their governance.
Key Details
- SEBI has constituted a working group to review regulations applicable to ESG Ratings Providers
- The current framework was introduced through SEBI’s 2023 Master Circular
- The review has been initiated based on feedback received from stakeholders and market participants
- The working group includes participants from industry, investment institutions, ESG ratings providers, users of ESG ratings, legal professionals, analysts, and academia
- The group will review the existing framework and consider stakeholder suggestions
- It will also identify measures to improve transparency, reliability, and confidence in ESG ratings
- The review will include consideration of regulatory approaches and developments in other jurisdictions
Why it matters
ESG ratings play a role in how investors and stakeholders assess sustainability-related performance. SEBI’s review focuses on the regulatory framework governing ESG ratings providers and aims to evaluate whether refinements are needed based on stakeholder input and global regulatory developments.
How EcoActive Supports
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Support internal review, validation, and approval processes for ESG disclosures. - Support ESG reporting and ratings submissions
Help organizations manage ESG disclosures used in reporting and ESG ratings processes.
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