Purpose

This policy establishes a structured framework for identifying, disclosing, managing, and mitigating conflicts of interest to ensure the independence, objectivity, and credibility of ESG ratings issued by Shesh ESG Rating Provider.

Scope

This policy applies to all

• Employees
• Directors and senior management
• Analysts and rating committee members
• Consultants, contractors, interns, and temporary staff
• Third parties engaged in rating-related work

Definition of Conflict of Interest

A conflict of interest arises when personal, financial, professional, or other considerations compromise, or appear to compromise, the independence or objectivity of ESG rating activities.

Conflicts may be:

• Actual: A real conflict exists.
• Potential: A conflict may arise in the future.
• Perceived: External stakeholders may view a situation as compromising independence.

Types of Conflicts of Interest

Common conflicts include

• Personal financial interest in a rated entity (shares, investments, loans).
• Close relationships with management or employees of rated entities.
• Gifts, benefits, or hospitality from rated entities or intermediaries.
• External employment, consulting, or advisory roles with rated entities.
• Pressure from clients, management, or commercial teams.
• Involvement in fee negotiations linked to rating outcomes.
• Participation in marketing or business development for rated clients.
• Prior employment with an entity being rated.
• Analyst rotation issues or familiarity risk.

General Principles

• ESG rating decisions must be impartial, evidence-based, and free from undue influence.
• Employees must avoid any activity that impairs, or could impair, independent judgment.
• Transparent disclosure and prompt management of conflicts is mandatory.
• Compliance with regulatory expectations for Category 2 rating providers is required.

Disclosure Obligations

Employees must disclose:

• All actual, potential, or perceived conflicts immediately.
• Financial interests in clients, rated entities, or competing organisations.
• Relationships with individuals or entities connected to ongoing rating assignments.
• External employment, freelance work, or board positions.
• Any situation that may reasonably appear to influence objective judgment.

Disclosures shall be submitted through the Conflict of Interest Declaration Form and recorded in the Conflicts Register.

Review and Assessment

The Compliance Officer or designated committee will:

• Review all disclosed conflicts
• Assess materiality and risk
• Determine mitigation measures
• Document decisions and actions taken

Decisions are binding on affected employees.

Conflict Management Measures

Depending on severity, the company may implement:

• Recusal: Removing an individual from a rating assignment or committee
• Reassignment: Assigning work to an independent analyst.
• Information barriers: Restricting access to sensitive information.
• Approval controls: Requiring high-level review of decisions.
• Rotation of analysts: Minimizing familiarity bias.
• Enhanced monitoring: Additional supervisory checks.
• Restriction on securities trading: Mandatory divestment or abstention.

Prohibitions

To maintain independence:

• Employees involved in rating work shall not participate in fee negotiations.
• No employee may guarantee favourable rating outcomes.
• Rating analysts may not solicit business or engage in promotional activities for rated entities.
• Personal securities trading based on non-public information is strictly prohibited.
• Analysts shall not rate entities where they have had employment within the last 12 months

Organizational Controls

The company shall maintain

• A segregated rating function separate from business development.
• Analyst rotation practices.
• A rating committee structure with documented decision rationale.
• A Conflicts Register that is periodically reviewed.
• Annual conflict-of-interest declarations from all employees.
• Independent compliance oversight.

External Disclosure

• Where required, the company shall disclose to clients or public users:
• Any conflict that may impair independence
• Analyst involvement and previous relationships, if relevant

Disclosure will be included in rating reports or communications, as per regulatory guidelines.

Breach and Consequences

Failure to disclose or manage conflicts may result in:

• Removal from rating responsibilities
• Formal warnings
• Suspension or termination
• Legal or regulatory action, if applicable

Intentional concealment is a serious violation.

Training and Awareness

All employees shall undergo periodic training on:

• Recognizing conflicts
• Disclosure procedures
• Ethical rating practices
• Regulatory expectations applicable to Category 2 rating providers

Record Keeping

The Compliance Officer shall maintain:

• Conflict of Interest Declarations
• Conflicts Register.
• Documentation of mitigation actions
• Annual employee disclosures.