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SES ESG Research Private Ltd. (SES ESG), a wholly owned subsidiary of Stakeholders Empowerment Services (SES), said it had received the ‘Certificate of Registration as an ESG (environment, social and governance) Ratings Provider’ (ERP) from market regulator SEBI.
SES began ESG ratings in 2018-19. Its coverage has now increased to more than 500 companies. This could rise further based on client needs, the firm said.
ESG (environment, social and governance) Ratings
Environmental, Social, and Governance (ESG) goals are a set of standards for a company’s operations that force companies to follow better governance, ethical practices, environment-friendly measures and social responsibility.
Environmental criteria consider how a company performs as a steward of nature.
Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates.
Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.
Importance -
It focuses on non-financial factors as a metric for guiding investment decisions wherein increased financial returns is no longer the sole objective of investors.
In recent years, the environmental, social and governance (ESG) investments have emerged as a subject of great interest and significance across the globe.
The ESG investments lead to public good as well as make business sense. They are beneficial for both —the shareholders and all other stakeholders.
The ESG rating providers (ERPs) offer rating products in two categories:
(1) risk ratings: an assessment of a company’s resilience to ESG related risks, and
(2) “impact” ratings: an assessment of the impact of a company’s operations on the environment and society.
Globally, there are no universally recognised ESG reporting standards and frameworks.
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