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Corporate Laws Central Ministry of Finance Securities and Exchange Board of India Act, 1992

Clarificatory and Procedural changes to aid and strengthen ESG Rating Providers (ERPs)

29-Apr-2025 | SEBI/HO/DDHS/DDHS-PoD-2/P/CIR/2025/59

SEBI has issued the circular regarding the Clarificatory and Procedural changes to aid and strengthen ESG Rating Providers (ERPs) effective from 29th April, 2025.

This circular has been issued in reference the Master Circular for ESG Rating Providers (ERPs) -SEBI/HO/DDHS/DDHSPOD3/P/CIR/2024/45which specifies various procedural/ disclosure requirements and obligations for ERPs

Key Highlights are as follows:
1. The ESG Rating Providers (ERPs) has to comply with the provision of this circular regarding the withdrawal of the ESG rating.
2. The provisions regarding the withdrawal of the rating has been specified for ERPs following a Subscriber-Pays business model and for ERPs following a Subscriber-Pays business model.
3. It has been clarified that ERPs following a Subscriber-Pays business model may share the detailed Rating Rationales/ Rating Reports as specified in as specified in Para 11.3 of the Master Circular, only with their subscribers and may not disclose the same on their websites. However ERPs following a Subscriber-Pays business model shall disclose the same in the format specified.
4. It has been decided to include the Cost Accountant (ACMA/ FCMA) and Diploma in Information System Security Audit (DISSA) qualifications from the Institute of Cost Accounts of India (ICMAI) to the audit team for conducting the internal audit for ERPs. Accordingly the Provision of master circular stands modified.

For more information, kindly refer to the attached document.

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