Cipla ESG rating rises with SES but drops with NSE on US recall
Cipla Limited disclosed mixed ESG outcomes for FY26. SES raised its rating to 69.9 (Grade B), reflecting slight improvement. However, NSE lowered its rating to 67 (Aspiring) from 69, citing a product recall by Cipla USA Inc. in January 2026 as the primary driver for the decline.
*this image is generated using AI for illustrative purposes only.
Cipla Limited reported divergent Environmental, Social, and Governance (ESG) ratings for FY26 from two SEBI-registered rating agencies. While SES ESG Research Private Limited (SES) improved the company’s adjusted rating to 69.9 (Grade B), NSE Sustainability Ratings & Analytics Limited (NSE) reduced its score to 67 (Aspiring). The decline in the NSE rating is attributed to a product recall by Cipla USA Inc., a wholly owned subsidiary of the company, in January 2026.
The disclosures were made pursuant to Regulation 30 read with Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and SEBI Circular no. HO/49/14/14(7)2025-CFD-POD2/I/3762/2026 dated January 30, 2026. The company received the ESG rating reports on August 10, 2026, at 1905 hours IST from SES and 1527 hours IST from NSE.
Rating Comparison
The following table outlines the changes in ESG ratings assigned by SES and NSE for FY26 compared to FY25:
| Rating Agency | FY26 Score | FY26 Grade | FY25 Score | FY25 Grade |
|---|---|---|---|---|
| SES | 69.9 | Grade B (Adjusted) | 69.3 | Grade B (Adjusted) |
| NSE | 67 | Aspiring | 69 | Aspiring |
SES maintained the Grade B classification but increased the numerical score from 69.3 in FY25 to 69.9 in FY26. Conversely, NSE retained the 'Aspiring' grade but lowered the numerical score from 69 to 67.
Impact of Operational Events
The divergence in ratings highlights the sensitivity of ESG scores to specific operational incidents. The NSE report explicitly linked the reduction in its rating to the product recall executed by Cipla USA Inc. in January 2026. This event appears to have outweighed other sustainability metrics in the NSE’s assessment framework for the period.
What the Numbers Show
The simultaneous improvement from one agency and decline from another suggests differing weightages assigned to operational compliance versus broader sustainability initiatives. While SES recognized incremental progress in its adjusted scoring model, NSE’s methodology penalized the recent regulatory or quality-related incident in the US market more heavily. Investors should note that ESG ratings are dynamic and can shift based on discrete events such as recalls, independent of long-term strategic sustainability goals.
Historical Stock Returns for Cipla
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -0.60% | -1.83% | +1.63% | +8.90% | -7.11% | +62.12% |
How might the January 2026 product recall by Cipla USA impact the company's future regulatory compliance costs and insurance premiums in the US market?
Will the divergence in ESG rating methodologies between SES and NSE prompt SEBI to standardize weighting criteria for operational incidents versus long-term sustainability metrics?
Could the lowered NSE ESG score affect Cipla's access to green financing or its eligibility for inclusion in specific ESG-focused mutual funds and indices?
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