Regulatory Briefing: UK FCA on ESG ratings

The case for regulating ESG data and ratings is becoming increasingly stronger as the UK Financial Conduct Authority has thrown its weight behind the idea. The FCA says it sees “a clear rationale for regulatory oversight of certain ESG data and rating providers” in line with proposals made late last year by the International Organization for Securities Commissions. 

The FCA sets out its view in a feedback statement entitled “ESG integration in UK capital markets”. It is, in effect, now asking the UK Treasury to extend its remit to include ESG rating providers. Primary legislation might be required to extend its powers and the FCA proposes a voluntary code of conduct in the interim.