“The new reporting requirements are expected to bring in greater transparency through disclosure of material ESG-related information to enable market participants to identify and assess sustainability-related risks and opportunities,” Sebi said in a statement.
The move comes in the face of rising preference among investors for companies with a high environment, social and governance score and the rising prominence of ESG funds. Earlier this year, Sebi had held a discussion with industry participants to chalk out ways to improve ESG disclosures in the country.
Sebi said that the new report lays emphasis on quantifiable metrics across sectors and time periods. “The disclosures on climate and social (employees, consumers and communities) related issues of the entity have been significantly enhanced and made more granular,” the regulator said.
The regulator also undertook several measures to streamline certain listing obligations and disclosures.
Sebi’s board approved that companies be mandated to disclose audio recording and transcripts of meetings held between companies and analysts or institutional investors. Companies will have to disclose audio or video recording within 24 hours or before opening of next day’s trading. The transcript of the meeting will have to be made public within five days.
Sebi also extended the norms for having a dividend distribution policy and risk management committee to top 1,000 companies by market capitalization from 500 earlier.
The regulator said that the risk management committee must have a minimum of three members from the board of directors and at least one of them must be an independent director.
“The quorum for a meeting of the
shall be either two members or one third of the members of the committee, whichever is higher, including at least one member of the board of directors in attendance,” the regulator said.
Sebi also streamlined several small disclosure requirements such as advertisement of financial results on newspapers, seeking stock exchange’s permission to change company name, timeline for submission of periodic reports like investor complaints, corporate governance report and shareholding pattern.
“The amendments are aimed at ensuring gender neutrality and maintaining consistency within the LODR Regulations, harmonizing certain provisions of the LODR Regulations with the Companies Act,” Sebi said.