Skip to content

CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Sustainability Audit, ESG Rating and Emerging Mandates from Government and Regulators

A SEBI-registered ERP discovers that its rating of Narmada Power Ltd was based on data later found to be materially wrong because of an internal processing error. The ERP has already published the rating. What is the most appropriate course consistent with the regulatory framework?

The ERP should promptly correct the rating and disclose the revision and reasons publicly through the prescribed channels. Its duties of accuracy, transparency and accountability sit with the provider itself, so it cannot delay, quietly change internal records, or shift the correction to the rated company.

  1. ALeave it until the next annual review to avoid reputational damage
  2. BQuietly update its internal records only
  3. CCorrect the rating promptly and disclose the revision and its reasons through the prescribed public channelsCorrect
  4. DAsk Narmada Power to publish a clarification instead

Explanation

The ERP regime stresses transparency, accuracy and accountability. A material error must be rectified and the revised rating and rationale made available to users, not hidden or deferred. An internal-only update leaves investors misled, and the duty to correct sits with the provider, not the rated company.

Did you get it right without looking?

One question tells you little. A timed set on Sustainability Audit, ESG Rating and Emerging Mandates from Government and Regulators shows your real accuracy, how long you take and where you lose marks.

Practise Sustainability Audit, ESG Rating and Emerging Mandates from Government and RegulatorsFree diagnostic mock

More Sustainability Audit, ESG Rating and Emerging Mandates from Government and Regulators questions