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SEBI Sets Up Panel to Reassess Regulatory Norms for ESG Rating Agencies
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In a significant move aimed at strengthening the sustainable finance ecosystem, the Securities and Exchange Board of India (SEBI) on Wednesday announced the constitution of a dedicated working group to reassess the regulatory framework applicable to ESG Rating Providers (ERPs). The initiative comes in response to various suggestions and representations received from market participants, including investors, issuers, and rating agencies, who have highlighted the need for refinements in the current guidelines.
According to SEBI, the review is intended to evaluate the effectiveness, transparency, and consistency of the existing norms governing ESG ratings, which play a crucial role in guiding investment decisions and promoting responsible corporate practices. As ESG considerations gain increasing prominence in capital markets, ensuring a robust and credible regulatory structure has become essential.
The newly formed working group brings together a diverse set of stakeholders, including representatives from listed companies (issuers), institutional investors and ESG rating users, domestic as well as international ESG rating providers, ESG research analysts, legal professionals, and members from academia. By incorporating inputs from across the ecosystem, SEBI aims to develop balanced recommendations that enhance accountability, improve disclosure standards, and align India’s ESG rating framework with evolving global best practices.
According to SEBI, the review is intended to evaluate the effectiveness, transparency, and consistency of the existing norms governing ESG ratings, which play a crucial role in guiding investment decisions and promoting responsible corporate practices. As ESG considerations gain increasing prominence in capital markets, ensuring a robust and credible regulatory structure has become essential.
The newly formed working group brings together a diverse set of stakeholders, including representatives from listed companies (issuers), institutional investors and ESG rating users, domestic as well as international ESG rating providers, ESG research analysts, legal professionals, and members from academia. By incorporating inputs from across the ecosystem, SEBI aims to develop balanced recommendations that enhance accountability, improve disclosure standards, and align India’s ESG rating framework with evolving global best practices.
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