Capital market watchdog Securities and Exchange Board of India (Sebi) today called for 'meaningful' dialogue between various regulators and market players to ensure better corporate governance practices.
The Sebi will watch corporate governance trends of companies and will discuss with other regulatory agencies to seek ways to improve the environmental, social and governance (ESG) standards of companies, its Chairman C B Bhave said at a conference here.
"We want to have dialogue with other regulatory agencies (to improve ESG standards of companies). We are happy to discuss this with the Reserve Bank, the government and other agencies...," Bhave said.
As and when a consensus emerges on the matter among market participants, the country's exchanges can also contemplate the idea of categorising companies in terms of ESG compliance, he said.
Noting that ESG values cannot be imposed on the market by mere regulation, Bhave said the initiatives should come from companies themselves.
"If most of the people think that legislation cannot be adopted, it cannot be enforced."
Bhave said that when a mishap occurs in the market on account of a lack of good practices among companies, the regulators will have to step in and take appropriate action.
"When there is a mishap in the model, the Government and regulators cannot sit back," Bhave said.
