ESG Mutual Funds Schemes

insight featured image

Key highlights of the publication

  • SEBI has mandated the top 1,000 listed companies (by market capitalisation) to make ESG disclosures as per the Business Responsibility and Sustainability Reporting (BRSR) from FY 2021-22 voluntarily and mandatory from FY 2022-23.
  • SEBI issued a press release on 29 March 2023 with respect to a decision taken during its board meeting. The board has approved the regulatory framework for ESG (environmental, social and governance) Disclosures, Ratings and Investing to facilitate a balanced approach.
  • In its meeting dated 29 March 2023, SEBI decided that in order to enhance the reliability of ESG disclosures, the BRSR (Business Responsibility and Sustainability Report) Core shall be introduced, which contains a limited set of key performance indicators (KPIs), for which listed entities shall need to obtain reasonable assurance.
  • The BRSR core will be applicable for the top 150 listed entities (by market capitalisation) from FY 2023 - 24, which shall be gradually extended to the top 1,000 listed entities by FY 2026 – 27.
  • SEBI has suggested that ESG rating providers can form an industry association and play an active role in developing a regulatory framework for ERP in the securities market and engage with the regulator at its ESG advisory committee.
  • The ESG committee has recommended a list of 15 ESG parameters with an Indian context, broadly categorised into: i) Environmental parameters, ii) Social parameters, and iii) Parameters on governance.