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India’s Capital Markets Regulator Proposes Tighter ESG Rules

India’s capital market watchdog proposed tighter environmental, social and governance rules as it seeks to minimize the risk of greenwashing and misuse of ratings by companies.

In a consultation paper released Monday, the Securities and Exchange Board of India sought to regulate ESG ratings providers, mandate disclosures and compel listed companies, registered funds or index-providers to use only these accredited ESG raters. It also proposed a subscriber-pay model, which contrasts with the one used by traditional credit-rating firms where the issuer of the bond pays a fee.