The FCA summarised feedback received to its discussion chapter (in CP21/18) on environmental, social and governance (ESG) integration in UK capital markets and has set out the potential next steps.
The FCA received 50 responses to the discussion chapter. The feedback is summarised as follows:
1. Issues related to ESG‑labelled debt instruments – Overall, respondents did not support additional measures by the Government or the FCA to strengthen the terms related to use of proceeds within contractual agreements, or to enhance the information on use of proceeds required to be disclosed in a prospectus. However, respondents supported some form of recognition or encouragement by the FCA for issuers and their advisors to adhere to existing industry principles for ESG‑labelled debt instruments and for some form of regulatory oversight of SPO providers and verifiers.
2. ESG data and rating providers – Overall, most respondents supported increased regulatory oversight of ESG rating providers with a focus on transparency, governance/systems and controls, and management of conflicts of interest to help achieve better outcomes for markets and consumers.
FCA will work on the key policy actions that result from the comments.