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

Anand Steels Ltd received an ESG rating based on a provider's disclosure-driven model. After the rating, the company publishes a restated emissions figure that is 18% higher than reported earlier. The provider had relied on the earlier figure. What should a rating provider following sound practice do?

A provider following sound practice should review the restated emissions data and, if it is material, update or reassess the rating while disclosing the change. Ignoring a material restatement would reduce reliability, and asking the company to withdraw correct data would compromise independence.

  1. AIgnore the restatement until the next annual cycle regardless of materiality
  2. BCancel its registration immediately
  3. CReview the restated data and, where material, update or reassess the rating with disclosure of the changeCorrect
  4. DAsk the company to withdraw the restatement

Explanation

A credible provider monitors new information and updates ratings when material data changes, with transparency about the revision. Ignoring a material restatement undermines reliability, deregistration is not an automatic response, and pressuring the company to withdraw correct data is improper.

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