Regulating ESG ratings providers

The information below is ‘cut and pasted’ from an email received from the Treasury on 15 November 2024, on regulating ESG ratings providers.

We have not had time to digest the contents yet. However we are of the view that as ESG ratings are important and increasingly able to impact asset values – because of their popularity.  As such, we agree with the analysis that they should fall within the financial services regulatory perimeter.

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“As you are aware, the Government published a consultation on a future regulatory regime for Environmental, Social and Governance (ESG) ratings providers on 30 March 2023.

Thank you for your participation and engagement with this consultation.

Following a full review and analysis of all consultation responses, the government announced earlier this year that it would proceed with developing a regulatory regime for ESG ratings providers.

In accordance with the Chancellor of the Exchequer’s Mansion House speech, yesterday evening, I am writing to now notify you that the government has published its consultation response and the draft legislation, which will bring ESG ratings providers into regulation. This will be delivered via the government laying secondary legislation next year and regulated by the Financial Conduct Authority, following its own consultation on regulatory regime requirements.

You can find the consultation response and draft statutory instrument documents here: Future regulatory regime for Environmental, Social, and Governance (ESG) ratings providers – GOV.UK

The government welcomes technical comments on the draft legislation by 14 January 2025.

Thank you”