Sebi sets up panel to review ESG rating rules

Metro India News | NEW DELHI

The Securities and Exchange Board of India (Sebi) on Wednesday announced the formation of a working group to review the regulatory framework governing ESG Rating Providers (ERPs). The move comes in response to feedback from market participants and other stakeholders on the current framework.

The working group includes representatives from a diverse set of stakeholders, including issuers, investors and ESG rating users, domestic and global ESG rating agencies, ESG analysts, legal experts, and members of academia.

The panel has been tasked with conducting a detailed review of the existing ERP regulations. Its responsibilities include examining suggestions and representations received from market participants, and recommending measures to improve transparency, reliability, and investor confidence in ESG ratings.

In addition, the group will study international developments in ESG regulation to identify best practices that could be adapted for the Indian context. This includes assessing global standards, approaches taken by other regulators, and potential areas for alignment while considering the unique features of the Indian market.

The working group is expected to submit a comprehensive report to Sebi with findings and recommendations on policy and regulatory changes required in the ERP framework. Sebi aims to use the report to strengthen ESG rating mechanisms in the country and ensure that investors have access to credible and reliable ESG information to make informed decisions.

By reviewing and updating the framework, Sebi hopes to enhance the overall transparency and effectiveness of ESG ratings in India, while also aligning the country’s practices with international norms, thereby boosting investor confidence and promoting sustainable investment practices.

The panel’s recommendations are expected to play a key role in shaping future policies for ESG rating providers and improving the overall ESG ecosystem in India.