Recently, the Council of the European Union adopted the new ESG Ratings Regulation, following a proposal from the European Commission and an agreement with the European Parliament. This regulation addresses inconsistencies, lack of transparency, and fragmented practices in ESG rating activities across Member States. It reflects the EU’s commitment to sustainable finance markets and the Green Deal objectives. The regulation has been published in the EU’s Official Journal on December 12 and will take effect 20 days after publication, with provisions applicable 18 months later.
Previously, ESG rating activities lacked EU-wide regulation, leading to discrepancies and greenwashing risks. The new regulation establishes harmonised standards for quality, reliability, and transparency, tackles conflicts of interest, and improves methodology disclosures.
Read our full note on the topic to learn about the ESG Ratings Regulation’s scope; authorisation and frameworks; requirements for access to information; and supervisory measures to ensure compliance.
