India Proposes Supply Chain ESG Disclosure, ESG Investing Rules

Large companies in India may be required to provide assurance on their ESG reporting and supply chain-level ESG disclosures, while ESG investing funds will face tighter portfolio and stewardship criteria, according to a new set of proposals released by the Securities and Exchange Board of India (SEBI), aimed at improving transparency and addressing greenwashing risks. In the new consultation paper released, SEBI notes that the “growing recognition of the significant economic and financial impact of climate change and environmental, social and governance (ESG) risks,” which has led to the launch of ESG funds and calls by investors and regulators for ESG-related disclosures. The regulator established an ESG Advisory Committee in May 2022, and the consultation paper reflects their proposals for a regulatory framework across ESG disclosures by public companies, ESG investing by mutual funds, and ESG ratings providers.