Capital markets regulator Sebi has given approval to CARE Ratings Ltd's subsidiary CARE ESG Ratings to provide environmental, social, and governance (ESG) ratings.

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Such ratings will enable the issuers to discern steps for the betterment of their sustainability performance.

Having received the registration under the Sebi (Credit Rating Agencies) Regulations on May 2, 2024, CARE ESG Ratings Ltd will commence its ESG rating activity, according to a statement issued by CareEdge Group on Friday.

"With the use of ESG ratings, a sustainable growth journey of businesses can get an independent viewpoint. A business can now assess its relative position and take action to strengthen its sustainability policies & practices.

“Investors and stakeholders have adopted new perspectives on ESG-based reporting, and performance, both domestically and internationally," Mehul Pandya, MD and Group CEO of CareEdge, 
said.

Last month, Sebi gave clearance to ICRA's subsidiary Pragati Development Consulting Services Ltd and Crisil's entity Crisil ESG Ratings & Analytics to offer ESG ratings.

In 2023, the Securities and Exchange Board of India (Sebi) amended its regulations pertaining to credit rating agencies, whereby ERPs can be allowed to register with the regulator under the CRA (Credit Rating Agencies) norms.