We’ve covered the transition of many global economies from unregulated ESG ratings landscapes to voluntary codes of conduct for raters, all the way to fully regulated ratings markets. However, maintaining ESG ratings regulations matters just as much as adoption. ESG ratings are relatively new, and iteration is necessary to address market concerns. The Securities Exchange Board of India (SEBI) is now in the process of addressing those concerns, with a new review of ratings regulations. ESG Today reports:
“The Securities and Exchange Board of India (SEBI) announced that it has launched a new working group to review of the regulatory framework governing ESG Rating Providers.
The new review follows the release by SEBI in 2021 of its ‘Master Circular for ESG Rating Providers,’ which effectively brought ESG ratings providers into the SEBI’s regulatory framework for credit ratings agencies. The regulator said that its decision to conduct the review follows feedback from market participants and stakeholders regarding the current framework.”
We’ve seen that ratings regulations are necessary in building and maintaining trust in sustainable finance. Additionally, sustainable finance regulations are complex and often require fine-tuning. As countries develop their ratings regulations, global best practices are emerging.
Our members can learn more about ESG regulations here.
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