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MUMBAI : Madhabi Puri Buch, chairperson of the Securities and Exchange Board of India (Sebi) on Tuesday said the market regulator aims to use a two-track approach on Environmental Social and Governance (ESG). “When it comes to ESG, Sebi’s approach will be two-track" Buch said.

While emphasizing on the need for such an approach, Buch said the first track will include the large entities in our ecosystem who are desirous of getting foreign capital must align with global standards.

“Now if you want foreign capital whether it is equity, debt or hybrid, the world will ask us to comply with the global standards. We need to be able to compare different countries across the globe in order to determine their allocation."

Adding that, for an economy that is capital deficient and which needs foreign capital there is no alternative, so aligning with global standards is absolutely essential for us.

This comes as the Sebi chief was addressing an ESG conference for Industry Transformation - ESG for Atmanirbhar Bharat' held in Mumbai.

In addition, however, Sebi chief said that the entire space of ESG is evolving in a way now, in the context of investment and movement of global capital is relatively new and new rules are written as we speak. In this context, “It is imperative that emerging markets like India or low-cost economies like India have their own independent view on what ESG means to them", she said.

In January this year, he Securities and Exchange Board of India, issued a consultation paper to streamline and standardize the ratings of companies on Environmental Social and Governance metrics.

As per the consultation paper Sebi accredited entities can provide ESG ratings. These entities can include ratings agencies, Sebi registered reasearch analysts among others . The criteria will be applicable for top 1000 companies according to market capitalisation. The regulator has also formed a committee to look at ESG.

ABOUT THE AUTHOR

Priyanka Gawande

Priyanka Gawande is a senior legal correspondent at Mint. She has worked as legal reporter for four years with both television and digital mediums. Based in Mumbai, she reports on disputes across sectors including banking, corporates and finance. This also includes insolvency and bankruptcy cases and intellectual property rights (IPR) litigation. Her focus also comprises tracking capital markets and disputes relating to securities law. Previously, Priyanka worked with Informist Media for 2.5 years covering major insolvency and bankruptcy cases and corporate developments. She started her career in journalism with Business Television India (BTVi) where she reported on primary markets, banking, finance and insurance companies.
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