EC adopts Delegated Regulation on transparency and integrity of ESG rating activities

The European Commission has adopted two Delegated Regulations supplementing the Environmental, Social And Governance (ESG) Ratings Regulation (EU) 2024/3005 on the transparency and integrity of ESG rating activities. Both Regulations are based on the final draft RTS published by the European Securities and Markets Authority in October 2025. They will enter into force on the 20th day following publication in the Official Journal of the European Union and will apply from 2 July.

The first Delegated Regulation sets out regulatory technical standards (RTS) on the separation of ESG rating activities from other business activities carried on by ESG rating providers. It specifies the measures and safeguards applicable where a derogation from the separation requirement is relied upon, to prevent conflicts of interest. In particular, providers must establish separate organisational structures and working environments for staff involved in the rating process from any activities listed in Article 16(1) of the ESG Ratings Regulation. Staff will also require regular self declarations confirming non involvement in those activities. Additional technical and internal control measures apply where providers intend to carry on investment services and/or insurance or reinsurance activities, with further safeguards for those that provide, or intend to provide, benchmarks.

The second Delegated Regulation sets out RTS on the information ESG rating providers must disclose to the public and to users of ESG ratings, rated items and issuers. It specifies the content, structure and presentation of disclosures under Annex III of the ESG Ratings Regulation, including product-level disclosures on what risks and impacts are assessed, as well as the methodologies, models and the assumptions used. The Delegated Regulation also establishes a higher level of methodological disclosures for users and rated items.

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