Sebi Seeks Feedback on New ESG Rating Guidelines

The Securities and Exchange Board of India (Sebi) is requesting public feedback on its draft guidelines for strengthening the framework of ESG rating providers, focusing on aspects like withdrawal norms, disclosure, audits, and governance. Sebi aims to refine the ERPs' operational guidelines, with public comments due by March 6.

The Securities and Exchange Board of India (Sebi) has unveiled a draft circular, seeking public consultation on its proposed guidelines to fortify the framework governing environmental, social, and governance (ESG) rating providers.

The forthcoming regulations intend to address pivotal facets such as ESG rating withdrawals, rationale disclosures, internal audits, and governance mandates for ERPs. As per the circular, Sebi has invited public remarks until March 6.

The outlined draft delineates specific conditions for ESG rating withdrawals, contingent on the rating provider's business model. ERPs using a subscriber-pays model can withdraw ratings only if devoid of existing subscribers at the time. For ERPs using an issuer-pays model, withdrawal conditions hinge on a minimum tenure and bondholder approvals. Furthermore, designated sections on stock exchange websites will feature ESG ratings conspicuously.