ESG Ratings in India: How MSCI, Sustainalytics, and CRISIL Score Your Company

ESG ratings have moved from a niche analytical tool used by specialist investors to a mainstream factor in investment decisions, procurement processes, and credit assessments. For Indian companies — whether listed multinationals or mid-sized exporters — your ESG rating can now affect the cost of your capital, your eligibility for supply chain contracts, and your access to international markets. Understanding how rating agencies assess your company is the first step to improving your score.

How MSCI ESG Ratings Work

MSCI rates over 14,000 companies globally on a scale from AAA (leader) to CCC (laggard), using a combination of public disclosures, government databases, and proprietary research. MSCI's methodology is sector-specific — the issues that matter most for a mining company are different from those for a software firm. For Indian industrial companies, key MSCI focus areas include carbon emissions intensity, water stress exposure, toxic emissions, health and safety record, and governance structure. MSCI uses a rules-based approach that weights issues by their potential financial impact and time horizon. Companies that do not disclose relevant data are typically assigned worst-in-class scores for that metric, which is why proactive disclosure is consistently one of the highest-return ESG investments.

Sustainalytics and CRISIL: Other Ratings Indian Companies Face

Sustainalytics (owned by Morningstar) uses a risk-based framework that measures how much of a company's ESG risk is unmanaged. Scores range from 0 (no risk) to 100 (high unmanaged risk). CRISIL, India's leading credit rating agency, has developed its own ESG scoring framework specifically designed for the Indian context — covering listed and unlisted companies, with assessments used by Indian institutional investors, banks, and regulators. CRISIL's framework places particular emphasis on regulatory compliance, local environmental impacts, and governance practices relevant to Indian corporate structures.

How to Improve Your ESG Rating

The fastest route to improving your ESG rating is not necessarily changing your operations — it is improving the quality and completeness of your disclosures. Rating agencies cannot credit you for practices they cannot see. Companies that systematically review the specific data points each agency uses, ensure those are accurately captured in public filings and their BRSR report, and proactively engage with rating agencies on data accuracy consistently achieve better scores than companies with similar underlying practices but weaker disclosure habits. On the environmental side, establishing a verified GHG emissions inventory and a credible reduction roadmap — supported where appropriate by carbon credit purchases — signals the quality of management that agencies and investors look for. Csquare helps Indian companies build the carbon and ESG data infrastructure that underpins credible, improving ESG ratings.