“ESG preparedness should be made mandatory in Mauritius”

• l The focus is on trying to make greenwashing difficult so that investors are not deceived.
• l CARE Edge Ratings is working on launching sovereign rating services.

In a compelling address at the 2^nd ESG Summit in Mauritius, Mr. Najib Shah, Chairman of CARE Edge Ratings Limited, emphasized the imperative for collective action on Environmental, Social, and Governance (ESG) factors, highlighting the shared responsibility across governments, corporates, and individuals. Mr Shah’s speech underscored the pivotal role of governance, the resonance of social initiatives, and the pressing need for environmental stewardship.

“The recommendation of COP 28 cannot be applicable only to governments. Each one of us, as corporates and as individuals, has a role to play,” asserted Mr Shah, reflecting on the global call for concerted efforts to address climate change and sustainability challenges.

He noted that while governance and social aspects of ESG have received attention in various countries’ policies, the environmental component has historically lagged behind, leading to significant repercussions. “It is the environmental part, despite individual pieces of legislation regarding hazardous waste control, which has tended to be neglected for far too long, and for which we are paying a heavy price,” the Chairman of CARE Edge Ratings Ltd said, stressing the need for stringent regulatory protocols.

The sovereign rating initiative will be of particular interest to countries in Africa who have always perceived a less than fair deal from rating agencies

Acknowledging strides made in regulatory frameworks worldwide, Mr Shah commended initiatives such as the EU’s Sustainable Finance Disclosure Regulation and the Securities Exchange Commissions Regulations for bolstering transparency and accountability in ESG reporting. “The focus is on trying to make greenwashing difficult so that investors are not deceived,” he asserted. He further emphasized the pivotal role of regulatory mechanisms in empowering investors to make informed decisions.

The Chairman of CARE Edge Ratings Ltd also highlighted India’s proactive measures in addressing ESG concerns, citing regulatory interventions by the Securities and Exchange Board of India (SEBI) aimed at enhancing ESG disclosures and assessments. “The regulatory framework will ensure the rating agencies will carry the task of ESG assessments diligently and objectively,” Shah affirmed, underscoring the importance of robust ESG frameworks in driving value creation.

Expanding on CARE Edge Ratings Limited’s commitment to advancing ESG principles, Mr Shah announced the forthcoming launch of sovereign rating services, including a focus on African countries, and Mauritius. “The sovereign rating initiative will be of particular interest to countries in Africa who have always perceived a less than fair deal from rating agencies,” he declared. He also added that it is important to foster inclusive markets and empower economies through ESG-driven initiatives.

In alignment with global standards, Shah outlined plans for the establishment of an independent ESG service entity in South Africa, underscoring the commitment to adopting EU taxonomy and fostering collaboration with stakeholders to promote sustainable practices.

With Mauritius positioned as an international financial centre and a gateway to Africa, the Chairman of CARE Edge Ratings Ltd advocated for the implementation of a comprehensive ESG framework, emphasizing the importance of aligning with EU guidelines to attract investment and enhance transparency. “Disclosures on ESG preparedness should be made mandatory in Mauritius,” he urged, citing tangible benefits such as cheaper financing for green or social projects.

Mr Shah reaffirmed CARE Edge Ratings Limited’s dedication to supporting Mauritius and African countries in their ESG journey, emphasizing the importance of collective action in addressing the pressing challenges of our time. “Despite muted criticism from some quarters, ESG is here to stay,” he affirmed. He thus urged stakeholders to seize the opportunity for meaningful change.