28 pages carry this tag.
Three products with similar names that measure different things. Industry-relative ratings, absolute risk ratings and broad scores, the steps in building a rating, SEBI's six rating products, and a checklist for reading a rating report.
ESG raters often disagree about the same company. The research on how much and why, the three sources of disagreement (scope, measurement and weight), the problem of rewritten history, SEBI's attempt to narrow the gap, and how to use ratings that disagree.
India was one of the first countries to regulate ESG raters. The 2023 rules, who must register, Category I and II providers, the six rating products, India-specific parameters, issuer-pays and subscriber-pays models, the 19 registered providers, and how India compares with the EU and UK.
Every ESG rating, fund and model rests on data. The main sources of ESG data on Indian companies, the common quality problems (boundaries, estimates, lags, restatements, size bias), the global data providers, and a checklist for testing a figure before you use it.
Accidents, protests, regulatory action and fraud allegations can hit a company far faster than any rating changes. How controversy scores work, four Indian examples, the gap between allegations and findings, and a simple way to build event risk into a valuation.
The ESG indices that Indian ESG funds and index funds track: Nifty100 ESG, Nifty100 Enhanced ESG, Nifty100 ESG Sector Leaders, BSE 100 ESG, and the global Dow Jones Best-in-Class (formerly DJSI) indices. Their rules, exclusions and weighting, and the checks to run before using one.
The overall score is only as meaningful as the weights. A company can move from "average" to "good" with no change in its pillar scores if the weights...
A number, usually from 0 to 100, that sums up a company's performance across a set of environmental, social and governance indicators.
An opinion from a rating provider on a company's ESG performance or on the ESG risks it faces, expressed as a grade or score.
A rating of how much ESG risk a company has left unmanaged, on an absolute scale where a lower number means lower risk.
A firm that issues ESG ratings or scores; in India, one registered with SEBI under the Credit Rating Agencies Regulations, 1999.
A SEBI-required ESG rating built only on assured or independently assessed data, mainly the BRSR Core indicators.
One of SEBI's required rating products, measuring the speed and size of a company's efforts and investment towards net zero and its improvement over time.
A measure of how serious a company's involvement is in ESG-related incidents, such as accidents, protests, fines or fraud allegations.
A rating approach that judges a company against peers in its own industry rather than against all companies.
A firm that collects, cleans, estimates and sells ESG data on companies, often alongside ESG ratings.
ESG information that a company discloses about itself, for example in its BRSR, annual report or sustainability report.
ESG figures modelled by a data provider when a company has not disclosed them, for example estimated emissions based on industry averages.
An NSE index of Nifty 100 companies, weighted by free-float market capitalisation tilted by ESG score, after excluding certain businesses and severe controversies.
A stricter version of the Nifty100 ESG Index that also removes companies with weak ESG scores.
An NSE index that picks the companies in each Nifty 100 sector that manage ESG risk best and have no major controversies.
An ESG version of the BSE 100, first launched as the S&P BSE 100 ESG Index, that excludes certain businesses and UN Global Compact violators.
A global family of best-in-class sustainability indices launched in 1999, based on S&P Global's Corporate Sustainability Assessment and renamed the Dow Jones Best-in-Class Indices from 10 February 2025.
S&P Global's yearly industry-specific questionnaire and assessment that produces S&P Global ESG Scores.
A business model in which the rated company pays the ESG rating provider for its rating.
A business model in which investors and other subscribers, not the rated company, pay for ESG ratings.
The change in a company's ESG rating or score over time, used by some investors to favour companies that are improving.
Related topics: Valuation, DCF, Relative valuation, Cost of capital, Financial statements, Cash flow, Earnings quality, Red flags
