SEBI/HO/DDHS/DDHS -PoD -2/P/CIR/2025/59 — THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992

CIRCULAR SEBI/HO/DDHS/DDHS -PoD -2/P/CIR/2025/59 All Registered ESG Rating Providers, To, All Listed Entities, All Recognized Stock Exchanges, All Registered Depositories Madam/ Sir, Sub: Clarificatory and Procedural changes to aid and strengthen ESG Rating Providers (ERPs) The Master Circular for ESG Rating Providers (ERPs) SEBI/HO/DDHS/DDHSPOD3/P/CIR/2024/45 dated May 16, 2024 ("Master Circular") specifies various procedural/ disclosure requirements and obligations for ERPs. Based on representation received from ERPs and feedback from various stakeholders through public consultation, the following clarifications/ guidelines in respect of provisions of the Master Circular are being specified: 1.1. Withdrawal of ESG ratings 1.1.1. Para 13.1 of the Master Circular provides as under: "Regulation 28M of CRA regulations prescribe, inter-alia, that an ERP shall not withdraw an ESG rating except in cases where the rated issuer, or the issuer whose security is rated, is wound up or merged or amalgamated with another company, or except in cases as may be specified by SEBI from time to time. Further, subject to CRA Regulations, ERP shall withdraw an ESG rating as per its documented policies which shall also be disclosed on its website. In this regard, an ERP shall adhere to the provisions of this circular in withdrawal of any ESG rating." 1.1.2. In this regard, considering the challenges faced by ERPs and in order to align the requirements with the withdrawal norms laid down for credit rating, in addition to the cases specified in Regulation 28M of the SEBI (Credit Rating Agecies) Regulations, 1999 , the following is being specified: April 29, 2025 For ERPs following a Subscriber-Pays business model: The ERP may withdraw a rating provided that there are no subscribers for the ra