The Securities and Exchange Board of India (SEBI) on October 31, 2024, issued the notification regarding the Consultation Paper on Proposals for Ease of Doing Business by ESG Rating Providers (ERPs).
The following has been stated namely: -
• The matters consulted in this paper are as under:
o Requirement of sharing draft ESG rating report with the issuer in case of ERPs following a subscriber-pays model
o Dealing with appeal and representation by the rated issuer in case of ERPs following a subscriber-pays model
o Dispensing with the requirement to disclose the ESG ratings to the stock exchange(s) where the issuer or the security is listed, in case of ERPs following a subscriber-pays model
o Specifying Activity Based Regulation for ERPs
• Suggestions are requested for the following namely: -
o Whether ERPs following a subscriber-pays model should share their report with the subscribers and the rated issuer at the same time?
o Whether there should be a restriction on the rated entity/issuer itself and its group companies or associates to be a subscriber to ESG rating and/or rating of securities of the rated entity/issuer?
o Whether ERPs following a subscriber-pays model should grant an opportunity of representation to the rated issuer? If yes, whether the process specified in the proposal at Para 3.3 above for dealing with comments/clarifications received from the rated entity is appropriate and adequate? Should a rated entity/issuer seeking clarification be provided a facility in some specific form and manner?
o Whether ERPs following a subscriber-pays model may dispense with the disclosure of the ESG ratings to the stock exchange(s) where the issuer or the security is listed?
o Whether the proposed amendments for instituting Activity Based Regulation for ERPs are appropriate and adequate?
• The comments/suggestions should be submitted latest by November 15, 2024 at https://www.sebi.gov.in/sebiweb/publiccommentv2/PublicCommentAction.do?doPublicComments=yes in the prescribed format.
