ESMA consultation on transparency and integrity of ESG rating activities

The European Securities and Markets Authority (ESMA) has published a consultation paper on draft regulatory technical standards (RTS) on the transparency and integrity of environmental, social and governance (ESG) rating activities under Regulation (EU) 2024/3005. This was published together with a press release. The Regulation introduces a common regulatory approach to enhance the integrity, transparency, comparability where possible, responsibility, reliability, good governance and independence of ESG rating activities, and seeks to contribute to the transparency and quality of ESG ratings and to the sustainable finance agenda of the EU. ESMA is mandated to deliver draft RTS in relation to authorisation, recognition, separation of activities and disclosures. The draft RTS sets out the aspects that apply to ESG rating providers, including:

• The information that should be provided in the applications for authorisation and recognition.
• The measures and safeguards that should be put in place to mitigate risks of conflicts of interest within ESG rating providers who carry out activities other than the provision of ESG ratings.
• The information that they should disclose to the public, rated items and issuers of rated items, as well as users of ESG ratings.

The deadline for comments is 20 June. ESMA encourages responses from prospective ESG rating providers, financial market participants, ESG ratings users or rated entities. ESMA will consider the feedback received and expects to publish a final report in Q4 2025. ESMA expects to submit the draft RTS to the European Commission by the end of October.

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