26-05-2021

PR Newswire


ESG Risk AI unveils ESG Rating Methodology

 (11:41 Hrs. IST) 

MUMBAI, India, May 26, 2021 /PRNewswire/ -- India's first ESG Rating Agency, ESG Risk AI - an Acuité Group Company, has unveiled its ESG rating methodology and made it available to all stakeholders creating transparency in the ESG assessment process. The methodology will enable the key stakeholders including corporates, asset owners, asset managers, retail investors and banks to understand the evaluation and scoring process of ESG risk. This in turn will aid in integrating ESG factors in their decision-making process. 

ESG Risk AI uses a comprehensive taxonomy, robust methodology, and analyst expertise to assess a company's ESG performance and assign a rating. The scores are based on a wide range of ~739 data points and 525 indicators that have been selected and assigned weights based on their materiality and relevance to specific industries. Each score provides a summary of the corporate's ESG strategy, initiatives, results, and negative news across 19 critical themes including energy, emissions, water, environmental management, ESG reporting, human rights, community, supply chain, and shareholders' rights among others. The scores are then reviewed by analysts to assign the ESG Rating. The detailed methodology document is available for download on ESG Risk AI's website (https://esgrisk.ai/methodology/).

Speaking on the development, Mr. Sankar Chakraborti, Chairman-ESG Risk Assessments & Insights, and CEO-Acuité Group, said, "With environmental, social and governance (ESG) issues taking centre-stage, we are observing heightened awareness and enthusiastic adoption of ESG practices by Indian corporates. Our decision to make ESG assessment methodology widely accessible comes with a sense of responsibility towards enhancing transparency in the ESG assessment process."

"We are witnessing the emergence of investors who seek association with organisations that align with their values of profit with purpose, besides offering above-market returns over a long term. Similarly, banks have sharpened their focus on companies with high standards of governance and risk management to avoid further build-up of NPAs. Top these with the regulatory thrust such as the recent Business Responsibility and Sustainability Report (BRSR) by SEBI, sustainability initiatives have become mainstream for corporates too. Our pioneering initiative of ESG Rating thus aligns well with the emerging needs thereby facilitating decision making within ESG Framework," he added.

Along with scores on Environment, Social, and Governance parameters, ESG Risk AI's assessment method also assigns a Transparency Score to indicate the standard of the disclosure.

About ESG Risk AI

ESG Risk Assessments & Insights Limited (ESG Risk AI) is India's first ESG Rating company and is a wholly-owned subsidiary of Acuité Ratings & Research Limited. Its assessment methodology covers a company's performance on Environment, Social, and Governance parameters as well as its reporting transparency. Apart from ESG Ratings, the company has developed ESG assessment tools and electronic workflow.

About Acuité Group

Acuité Group comprises India's leading credit rating agency, Acuité Ratings and Research, a pioneer SME focused rating company, SMERA Ratings & Gradings, and India's first ESG Rating Company, ESG Risk AI

Acuité Ratings has assigned credit ratings to more than 8,600 entities across 200+ industries. SMERA Ratings has rated over 50,000 SMEs.

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Roshni Rohira
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