SEBI’s framework for ESG Rating Providers (ERPs), effective from July 2024, brings regulatory structure to India’s ESG assessment market. ERPs must now register with SEBI, adhere to transparency requirements for their methodologies, manage conflicts of interest, and provide companies with the opportunity to review and respond to their assessments before publication.
The framework addresses a global concern: the opacity and inconsistency of ESG ratings. By requiring ERPs to disclose their assessment criteria, data sources, and weighting methodologies, SEBI is pushing the Indian market toward greater standardisation and accountability.
For companies, the implications are practical. SEBI-registered ERPs will assess listed entities using disclosed methodologies, and companies will have a formal right to engage with the assessment process. This creates both an obligation (to provide accurate data) and an opportunity (to ensure accurate representation).
RSustain helps clients engage constructively with ESG rating processes: understanding different ERP methodologies, identifying disclosure gaps that affect scores, preparing structured data submissions, and responding to preliminary assessments with supporting evidence.
India’s ERP framework is among the most comprehensive globally. It signals a maturing ESG ecosystem where assessment quality is regulated, not left entirely to market forces. Companies that engage proactively with the rating process will benefit; those that ignore it will be rated without their input.