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ESG Advisory Committee - SEBI

SEBI has constituted a committee for advising on Environmental, Social, and Corporate Governance (ESG) -related matters in the securities market as ESG Advisory Committee as on May 06 2022.


ESG Advisory Committee

The committee was formed under the chair of Mr Navneet Munot with other respected industry leaders as members and divided into 5 groups.

Group 1 - Prepare of sustainability reports - 7 member

Group 2 - Users of sustainability reports (Mutual Funds, Asset Managers, Insurance Companies) - 4 member

Group 3 - ESG Rating Providers, Proxy Advisors, Credit Rating Agencies - 4 Member

Group 4 - Others – Technical Expert, Assurance Providers - 3 member

Group 5 - Secretariat to the Committee & Co-ordinator - 4 member


Purpose

The committee has to make recommendations to streamline the regulatory framework for the following three parts:

A. ESG Disclosure - 4 objective

B. ESG Ratings - 3 objective

C. ESG Investing - 3 objective


A. ESG Disclosure - 4 objective

  1. Review of leadership indicators that may be made essential - including those related to value chain

  2. Developing sector specific sustainability disclosures

  3. Evolving disclosures / metrics that are relevant to the Indian context.

  4. Identify areas for assurance and also roadmap for its implementation

B. ESG Ratings - 3 objective

  1. Developing separate/ parallel approach for ESG rating adapted to emerging market e.g. focus on ‘S’ including employment generation, etc.

  2. Developing uniform indicators of ‘G’ as input to ESG ratings and / or credit ratings

  3. Disclosures in the rationale by ESG rating providers on what and how qualitative factors were factored in the ESG ratings / observations

C. ESG Investing - 3 objective

  1. Continuous enhancement of disclosures specific to ESG Schemes of Mutual Funds with particular focus on mitigation of risks of mis-selling and greenwashing. The evolution of standards and norms for ESG is a dynamic process which necessitates continuous evaluation.

  2. Examine whether ESG funds need to have prudential norms, if any.

  3. Long term plan to prescribe ESG disclosures for all Mutual Fund schemes.


Member of Committee


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