SEBI Introduces Comprehensive ESG Rating Regulations Emphasizing Transparency, Accountability, and Standardized Disclosure Protocols

SEBI amended Credit Rating Agencies Regulations in 2025, introducing key modifications for ESG rating providers. The amendment establishes a subscriber-pays business model with specific compliance requirements, including transparency in rating processes, fee structures, and disclosure protocols. ESG rating providers must now share rating reports simultaneously with subscribers and rated entities, allow two-day comment periods, and disclose rating methodologies. The regulations mandate that ratings be based on publicly available information, ensure minimal fee conflicts, and require providers to state the financial regulator overseeing their ratings. These changes aim to enhance accountability, reduce potential conflicts of interest, and standardize ESG rating practices across financial sectors. .....

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