CareEdge to Operate as ESG Rating Provider: Approval Received From SEBI

CARE Ratings Limited (CARE), one of the leading credit rating agencies in India, announced a significant development on May 2nd, 2024. Its wholly-owned subsidiary, CARE Advisory Research & Training Limited (now known as CARE ESG Ratings Limited – CareEdge-ESG), has received approval from the market regulatory Securities and Exchange Board of India (SEBI) to function as a Category I ESG Ratings Provider (ERP).

A Catalyst for Change

CareEdge-ESG aspires to be a driving force in India’s journey towards a sustainable future. The company leverage a comprehensive framework, meticulously crafted by incorporating key indicators from established global and domestic sustainability standards, while ensuring context-specific relevance to the Indian market.

This robust framework underpins rigorous assessments based on the evaluation of over 700 data points. Furthermore, CareEdge-ESG uses an indicator-level materiality approach, ensuring accurate weighting within the assessment model.

Value Proposition for Businesses

The growing emphasis on non-financial reporting stems from the recognized link between strong sustainability practices and long-term business success. CareEdge-ESG’s ratings will empower companies to:

• Benchmark Performance: Issuers can utilize the ratings to identify areas for improvement in their sustainability practices by comparing their performance against industry benchmarks.
• Competitive Advantage: The ratings provide valuable insights into a company’s relative standing amongst its peers within the sector.

Leveraging Established Expertise

CareEdge-ESG benefits from its association with the CareEdge Group, a knowledge-based analytical group offering a comprehensive suite of services, including ratings, analytics, consulting, and now, ESG ratings. Established in 1993, the parent company, CARE Ratings Ltd. (CareEdge Ratings), boasts a strong legacy exceeding three decades.

As India’s second-largest rating agency, CARE has established a global footprint and a proven track record of rating companies across diverse sectors. It consistently holds leadership positions within high-growth markets.

Looking Forward

CareEdge-ESG’s entry into the ESG rating space is a significant development for the Indian market. With its robust framework, experienced team, and established backing from CARE, CareEdge-ESG is well-positioned to play a critical role in promoting sustainable business practices and empowering Indian companies to thrive in the evolving global landscape.

“With the use of ESG ratings, sustainable growth journey of businesses can get an independent viewpoint. A business can now assess its relative position and take action to strengthen its sustainability policies & practices. Investors and stakeholders have adopted new perspectives on ESG-based reporting, and performance, both domestically and internationally. With SEBI’s ERP regulations & license, non-financial ratings will change for the better, guiding the Indian economy towards sustainability” said Mehul Pandya, MD & Group CEO, CareEdge.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.