Sebi plans to make registration mandatory for ESG rating providers

Sebi proposes framework for ESG scoring parameters and rating providers in fresh consultation paper

The Securities and Exchange Board of India (Sebi) is planning to make the registration for environmental, social, and governance (ESG) rating providers, or ERPs, mandatory under a new regulatory framework that will also look to address norms related to disclosures, methodology for ESG scoring, and developing a parallel approach for ESG rating suitable to emerging markets.

In a fresh consultation paper, the capital markets regulator has proposed a framework for ESG scoring parameters and rating providers.

Presently, ERPs are not subject to any regulatory oversight but continue to provide services for the securities market — a risk Sebi has identified