SEBI Constitutes Advisory Panel On ESG Matters

Capital markets regulator SEBI has constituted an advisory committee for advising on ESG (environment, social and governance) matters in the securities market. The committee will be headed by HDFC Mutual Fund's Navneet Munot, SEBI said in a statement.

In all, the committee has 19 members and further, four SEBI officials will be secretariat to the committee as well as coordinator. The committee has experts, including R Mukundan, MD and CEO of Tata Chemicals; C Siva Kumar, executive director of NTPC, Amit Talgeri, chief risk officer at Axis Bank, Sharad Kalghtagi, ESG head Cipla; Amit Tandon founder and MD Institutional Investor Advisory Services; J N Gupta, founder and MD of Stakeholders Empowerment Services and Rama Patel, Director of Crisil Ratings.Apart from Munot, the committee has experts, including R Mukundan, MD and CEO of Tata Chemicals; C Siva Kumar, executive director of NTPC, Amit Talgeri, chief risk officer at Axis Bank, Sharad Kalghtagi, ESG head Cipla; Amit Tandon founder and MD Institutional Investor Advisory Services; J N Gupta, founder and MD of Stakeholders Empowerment Services and Rama Patel, Director of Crisil Ratings. 

The terms of reference of the committee include enhancements in business responsibility and sustainability report, ESG ratings and ESG investing. With regards to enhancements in Business Responsibility and Sustainability Report (BRSR), SEBI said the panel will be responsible for reviewing leadership indicators that may be made essential - including those related to the value chain and developing sector-specific sustainability disclosures. It will also review evolving disclosures/metrics that are relevant to the Indian context and identify areas for assurance and a roadmap for its implementation. In addition, the committee will examine developing separate or parallel approaches for ESG rating adapted to an emerging market like focus on 'S' including employment generation.

This will also include developing uniform indicators of 'G' as input to ESG ratings and credit rating disclosures in the rationale by ESG rating providers on what and how qualitative factors were factored in the ratings and observations. With respect to ESG investing, SEBI said the committee will oversee continuous enhancement of disclosures specific to ESG Schemes of mutual funds with a particular focus on mitigation of risks of misselling and attempt at greenwashing. 

"The evolution of standards and norms for ESG is a dynamic process which necessitates continuous evaluation," SEBI said. It will also examine whether ESG funds need to have prudential norms if any as well as a long term plan to prescribe ESG disclosures for all mutual fund schemes.

With PTI Inputs