Govt working on ESG ranking for LIC ahead of IPO
The government is working on the ESG ranking for Life Insurance Corporation of India (LIC) before its initial public offering (IPO).
According to the information received, the Ministry of Finance is working to get the ESO (Environmental, Social and Governance) score for the Mega Initial Public Offering (IPO) by LIC.
A better ESG score will help in value addition to LIC. At the same time, it will also be helpful in attracting large and accountable amounts of capital.
ESG is a type of sustainable investment. It measures the impact of the ethical contribution of the company on the stakeholders of the company.
Most of the world’s largest companies inform about their ESG performance. This allows investors to quickly identify companies that are complying with inclusive growth factors.
Benefits of ESG
- Helping investors tailor their investment goals to their personal values and beliefs.
- Increase access to capital by attracting growing sustainable funds
- Companies have better operating performance and better stock performance. Also, the capital requirement is also less.
Status of ESG in India
- Under Business Responsibility and Sustainability Reporting (BRSR) by Listed Entities, Securities and Exchange Board of India (SEBI) has issued notification for inclusion of ECG reporting.
- The BRSR will be applicable to the top 1000 listed entities (by market capitalisation). Reporting of BRSR will be mandatory from the financial year 2022-23.
ECG Criteria:
Environmental:
Energy use, carbon footprint, climate change, waste management, pollution monitoring, natural resources, conservation, contaminated assets, hazardous wastes, toxic emissions, compliance with government environmental regulations.
Social:
Employee Welfare, Vendor Relations, Local Social Welfare Programs, Health Care Initiatives, Welfare Initiatives, Gender Equality, Race Equality, Religious Equality, Education Initiatives, Clean Environment First, Human Rights Monitoring.
Governance:
Transparent accounting practices, Investor relations, Conflict of interest in Board decisions, Business ethics, Opportunity to be heard, Political influence, Legal practice, Whistle blower policy
Source – The Hindu
