ESG Impact Ratings seek to measure the extent to which entities integrate, manage, & reflect the impact of an entity’s
business activities on the environment and the society, in the context of its governance practices. The ratings aim to
measure the externalities created by an entity’s operations for which it may not be bearing the costs directly, and
instead such costs are having to be borne by third parties, or the environment, or the society. A lower ESG Impact
Rating would be suggestive of the need for the entity concerned to incur relatively higher costs and investments for
internalising the externalities. In contrast, a high ESG Impact Rating would indicate that the entity concerned is highly conscious of its sustainable business practices.
The ESG Transition Ratings aim to measure the velocity of the investments made by an entity in making the transition to the Net Zero Goals as well as improving its ESG impact profile. These ratings reflect the incremental changes that an entity has made in its transition journey over recent years or concrete plans/ targets it harbors to address the risks and opportunities involved in transitioning to more sustainable operations. An ESG Transition Rating captures the current state of an entity’s preparedness for future transitions, drawing insights from its historical actions, ongoing operations, and disclosed plans assessed by ICRA. The ultimate outcome depends up on the entity’s future actions, which could be influenced by shifts in the broader operating environment and the regulatory context apart from entity level changes.
ESG Combined Ratings/ Scores, as the name suggests, combine the ESG Impact Rating and the ESG
Transition Rating of an entity i.e., incorporate both the current state of ESG preparedness as well as the
investments done, initiatives undertaken, and the progress made/ being made by an entity in its ESG transition journey over a period of time.
Core ESG Impact Rating is the ESG Impact Rating of an entity that is based only on third-party assured or audited
data disclosed by the rated entity. For simplicity and consistency, the Core ESG Impact Rating is arrived at using the BRSR Core indicators
Core ESG Transition Rating/ Score is an ESG Transition Rating/ Score that is based only on third-party assured or
audited data disclosed by the rated entity. For simplicity and consistency, the Core ESG Transition Rating/ Score is designed using the BRSR Core indicators.
Core ESG Combined Rating/ Score is an ESG Combined Rating/ Score that is based only on third-party assured or
audited data disclosed by the entity. For simplicity and consistency, the ESG Combined Rating/ Score is designed using the BRSR Core indicators.
