New EU Legislative Proposal on ESG Ratings

July 2023
Region: Europe
The EU Commission (EC) proposed a new regulation to regulate environmental, social and governance (ESG) rating providers that operate in the EU. The EC seeks to address a lack of transparency and consistency in the ESG rating market, which is expected to grow substantially in the coming years.  All ESG rating providers will, in future, need an authorization from the European Securities and Markets Authority (ESMA) to increase the quality and reliability of their services, to protect investors and ensure market integrity.