About ESG Ratings

Our ESG ratings provide an opinion on the issuer’s ESG performance by assessing its exposure to ESG risks, impact on environment and society, its internal governance factors, and ability to manage such ESG risks and opportunities over the medium term. ESG Ratings are assigned on a scale of 0 to 100.

The assessment is based on a proprietary framework comprising over 500 key performance indicators (KPIs) for each rated entity. The rating considers all material ESG parameters in the relevant sector and how well they are managed by the rated entity compared with its peers. It involves cross-sector, relative benchmarking of entities operating in India using domestic benchmarks and considering relevant global best practices.

For a parameter to be considered ‘material’, filters are applied from both, the risk perspective (how it may negatively impact a company’s financial risk and return profiles) and the impact perspective (how it may impact the country’s ESG landscape).

The assessment is based on quantitative and qualitative disclosures made by the company. The rating exercise also embeds a transition assessment by evaluating the track record of the company in addressing ESG risks and its initiatives aimed at improving ESG risk management.

ESG ratings can be subscribed to by investors such as banks, asset management companies (AMCs), financial institutions, insurance companies, foreign institutional investors, pension funds and retail investors as well as issuers.

The ratings can be used for investing and lending decisions, ESG risk monitoring, evaluating best practices among peers, and identifying opportunities.

Note: ESG ‘score’ and ‘rating’ are used interchangeably and are not different from each other.