″Because better sustainability disclosures are in companies’ as well as investors’ own interests, I urge companies to move quickly to issue them rather than waiting for regulators to impose them”
SEBI has constituted a committee for advising on ESG-related matters in the securities market.
The terms of reference of the Committee include the following:
Enhancements in Business Responsibility and Sustainability Report (BRSR)
- Review of leadership indicators that may be made essential – including those related to value chain
- Developing sector specific sustainability disclosures
- Evolving disclosures / metrics that are relevant to the Indian context.
- Identify areas for assurance and roadmap for its implementation
ESG Ratings
- Developing separate/ parallel approach for ESG rating adapted to emerging market e.g. focus on ‘S’ including employment generation, etc.
- Developing uniform indicators of ‘G’ as input to ESG ratings and / or credit rating.
- Disclosures in the rationale by ESG rating providers on what and how qualitative factors were factored in the ESG ratings / observations.
ESG Investing
- Continuous enhancement of disclosures specific to ESG Schemes of Mutual Funds with particular focus on mitigation of risks of mis-selling and greenwashing. The evolution of standards and norms for ESG is a dynamic process which necessitates continuous evaluation.
- Examine whether ESG funds need to have prudential norms, if any.
- Long term plan to prescribe ESG disclosures for all Mutual Fund schemes.
Check out the press release to view the committee members.
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