The transfer comes on the again of accelerating ESG impact in funding choices.
Notably, the ESG (environmental, social, and governance) elements decide an organization’s impact on society and surroundings.It provides a non-monetary glimpse on the prospects of future alternatives and dangers to the enterprise.
“The past couple of years have seen ESG-led investments gain traction. ESG assets stood at $37.8 trillion as of March 2021, and accounted for around a third of global assets under management (AUM),” the company stated.
“India has also caught on to the trend, with the AUM of ESG-focused funds totting up to more than Rs 12,000 crore as of December 2021.”
Accordingly, the evaluation will probably be primarily based on a proprietary framework that weighs sectoral impact on surroundings and social elements, and the relative efficiency of an organization on ESG features.
“Additionally, with investors beginning to screen opportunities through the ESG lens, sustainability parameters can have a bearing on the cost and availability of funds for corporates. Such corporates generally access the capital markets, both equity and debt, and or rely on foreign investors to meet their funding needs.
“Crisil Ratings will, subsequently, assess and disclose the impact of the ESG features on the credit danger profiles of firms, which is able to underscore their potential to elevate funds and, in flip, monetary flexibility. This, nevertheless, is based on the supply of ESG info,” it added.
In addition, the move comes as the top 1,000 listed companies will now have to mandatorily disclose non-financial information from next fiscal under SEBI’s Business Responsibility and Sustainability Reporting (BRSR) norms.