ESG: Regulations Summary

Only businesses certified by the Securities and Exchange Board of India (SEBI) can provide ESG rating services. Even overseas agencies that provide ESG rating services will need to obtain SEBI accreditation in order to supply services to Indian firms.

The market regulator established two categories for rating entities based on their net worth and functions.

Methodology for rating

The certified rating agency must disclose its rating methodology for all ESG ratings on its website, while keeping proprietary or confidential aspects of the methodologies in check, and include category-wise weightages of environmental, social, and governance factors in ESG ratings, as well as the weightage of high level themes or key issues in each of the three factors.