SEBI points new wave of ESG proposals
The Securities and Trade Board of India (SEBI) has issued proposals on a wide-ranging regulatory framework for ESG that cowl disclosure necessities for listed entities, the usage of ESG rankings within the securities market and ESG investing by mutual funds.
Some key proposals embody new necessities for India’s prime 250 firms to make disclosures in relation to their provide chains on a ‘comply or clarify’ foundation starting for fiscal years 2024-25. Nonetheless, assurance of such disclosures won’t be obligatory for fiscal years 2024-25, and as a substitute, assurance might be enforced on a ‘comply or clarify’ foundation from fiscal 12 months 2025-26 onwards.
The SEBI can also be searching for to extend transparency on the votes solid by ESG funds and their engagement with portfolio firms by way of enhanced disclosure necessities in an effort to mitigate the ‘greenwashing’.
On ESG rankings, the SEBI proposes that ESG rankings suppliers must consider 15 ESG parameters that “have an Indian context” when assigning ESG rankings to Indian firms. In parallel, SEBI has additionally proposed a wider supervisory and regulatory framework for the ESG rankings market, based mostly on amendments to its current CRA Laws. SEBI will take into account business suggestions and publish closing guidelines for India’s ESG regulatory framework sooner or later.
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