The Securities and Exchange Board of India (Sebi) has proposed to overhaul the framework for ESG ratings by introducing parameters relevant to the Indian context, such as job creation in smaller cities and gender diversity.
In a fresh consultation paper, the market regulator has recommended a unique set of metrics for assigning environmental, social and governance (ESG) scores for listed companies. The parameters will be more aligned to the domestic economy.
“This need is felt since ESG in emerging markets is different as compared to developed jurisdictions. Emerging markets have a different set of environmental & social challenges and it is critical for ERPs (ESG Rating Providers) to consider these while assessing company’s ESG risks/opportunities and impact,” Sebi has said in a paper.
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