India Proposes Supply Chain ESG Disclosure, ESG Investing Rules

Large companies in India may be required to provide assurance on their ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. reporting and supply chain-level ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. disclosures, while ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. investing funds will face tighter portfolio and stewardship criteria, according to a new set of proposals released by securities and markets regulator, the Securities and Exchange Board of India (SEBI), aimed at improving transparency and addressing greenwashing risks.

In the new consultation paper released Monday, SEBI notes the “growing recognition of the significant economic and financial impact of climate change and environmentalEnvironmental criteria consider how a company performs as a steward of nature., socialSocial criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. and governanceGovernance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights. (ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments.) risks,” which has led to the launch of ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. funds and calls by investors and regulators for ESG-related disclosures. The regulator established an ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. Advisory Committee in May 2022, and the consultation paper reflects their proposals for a regulatory framework across ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. disclosures by public companies, ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. investing by mutual funds, and ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. ratings providers.

Under the current rules, the top 1,000 listed companies in India by market capitalization are required to provide reporting on ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. factors based on Business   Responsibility   and   Sustainability   Report (BRSR) guidelines introduced in 2021, with BRSR reporting becoming mandatory this year. Noting that investors and other stakeholders will be increasingly relying on these reports, SEBI’s consultation paper said that “assurance becomes key for enhancing credibility of disclosure and investor confidence,” and that more transparency is required in the supply chains of reporting companies.

To address the need for ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. disclosure assurance, SEBI introduced “BRSR Core,” consisting of select KPIs for various E, S and G factors that need to be assured, with proposed mandatory assurance for the top 250 companies beginning next year, followed by the top 500 companies the following year, and the top 1,000 after that.

In the supply chain, the regulator proposes ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. disclosures according to the BRSR Core for the top 250 companies on a comply-or-explain basis beginning in 2024, with assurance beginning the following year.

In the area of ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. investing, SEBI’s consultation paper provides a series of proposals to expand disclosure for ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. funds, and other measures to improve transparency, “with a particular focus on mitigation of risks of mis-selling and greenwashing and other related areas. Proposals include providing better clarity on votes cast on resolutions at AGMs, and providing case studies on stewardship activities including reporting on engagements and outcomes aligned with the fund’s objectives.

Additional proposed rules for ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. funds include having at least 65% of AUM invested providing assurance on BRSR Core disclosures, with the remaining assets in companies reporting on BRSR, providing third party assurance that the portfolio is in compliance with its stated strategy or objective, and a mandated internal ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. audit to ensure that funds’ Scheme Information Documents, Stewardship Reporting, and Responsible Investment Policy documents are accurate.

SEBI also proposes rules for fund names, and that funds provide annual manager commentary highlighting factors including how the ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. strategy is being applied, how engagements are carried out, and tracking of investee company ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. ratings.

The regulator’s consultation paper also includes proposals for ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. ratings providers, including a list of ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. parameters with an India context, and that providers offer a “Core ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. Rating” based on information that has been assured or audited.

SEBI said that it is seeking commentary on the proposals until March 6, 2023. Click here to access the Consultation Paper.

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