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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

Greenleaf Analytics Pvt Ltd in Mumbai wants to issue ESG ratings to listed companies in India for a fee and to market them to investors. Under the SEBI framework for ESG Rating Providers (ERPs), what must it do first?

The firm must first obtain a certificate of registration from SEBI as an ESG Rating Provider. SEBI regulates ERPs directly, so offering ESG ratings for securities market use without registration is not permitted. Approvals from MCA or RBI, or merely informing exchanges, do not replace it.

  1. AObtain a certificate of registration from SEBI as an ESG Rating ProviderCorrect
  2. BObtain approval from the Ministry of Corporate Affairs
  3. CRegister with the Reserve Bank of India as a rating agency
  4. DSimply notify the stock exchanges and begin issuing ratings

Explanation

SEBI regulates ESG Rating Providers through a registration regime under its ESG Rating Providers framework. An entity cannot offer ESG ratings in the securities market without a SEBI certificate of registration. Notifying exchanges, or approvals from MCA or RBI, do not substitute for SEBI registration.

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