(Reuters) -India’s market regulator on Tuesday issued norms for withdrawing an ESG rating, weeks after its chief told Reuters it is reviewing the reporting requirements on environment for listed companies.
The regulator also provisioned norms for ESG rating agencies, according to a filing.
The ESG ratings providers can withdraw rating on a listed company if business responsibility and sustainability report are not available for a firm or if there are no subscribers for the ratings, according to the new guidelines from the regulator.
Additionally, when rating a security, the ratings provider can withdraw ratings if it has rated the firm for three years or for 50% of the security’s tenure, the regulator said.
Earlier this month, the Securities and Exchange Board of India’s (SEBI) new chief Tuhin Kanta Pandey told Reuters that SEBI will review the ESG disclosures, following concerns raised by Indian industry on reporting requirements on the environment, labor and other issues that it believes are onerous.
This comes at a time when similar moves are being made in different parts of the world. The European Commission has proposed rules to exempt thousands of smaller European businesses from EU sustainability reporting rules, while U.S. President Donald Trump has pushed back against ESG requirements.
India has fared poorly on ESG scores, with Moody’s Ratings classifying the country in the high risk category on environment and social factors.
(Reporting by Manvi Pant in Bengaluru; Editing by Leroy Leo)
