New Delhi, Apr 26 (KNN) In a move aimed at promoting sustainable investment and corporate practices, the Securities and Exchange Board of India (SEBI) has granted approval to CRISIL ESG Ratings & Analytics Limited to provide environmental, social, and governance (ESG) ratings.

The approval comes at a pivotal time when ESG disclosures are improving and financial markets are increasingly recognising the importance of independent ESG assessments.

CRISIL ESG Ratings & Analytics, a wholly-owned subsidiary of CRISIL Ratings Limited, has been designated as a Category 1 provider of ESG ratings, the rating firm stated on Thursday.

According to Amish Mehta, Managing Director and CEO of CRISIL, “The approval will support decision-making for issuers and investors, and channel funds towards sustainable growth of the Indian economy.”

Last year, SEBI mandated that ESG rating services in India can only be provided by certified entities, including foreign agencies operating in the country.

Prior to this order, CRISIL was offering ESG ratings as part of its overall rating services. The establishment of CRISIL ESG Ratings was a strategic move to comply with SEBI's regulations.

CRISIL has been actively involved in ESG assessments since 2021, launching its ESG ‘scoring’ business and gradually expanding coverage to approximately 1,000 companies across 65 sectors. These scores, now reclassified as ‘ESG ratings,’ will be transferred to the new subsidiary.

Gurpreet Chhatwal, Managing Director of CRISIL Ratings, highlighted the unique features of their ESG ratings framework, stating, “The ESG ratings are based on a unique India-specific framework that factors in nuances at the sectoral level while being guided by global best practices. The process involves analysing over 500 unique data points across environmental, social, and governance aspects for each company.”

(KNN Bureau)