The FCA is consulting on new rules that will ensure that ESG ratings are transparent, reliable and comparable. It says around half of ESG ratings users are concerned about how the ratings are built and their transparency. The proposals are designed to:
- increase transparency;
- improve governance;
- require identification and management of conflicts of interest; and
- set clear expectations for stakeholder engagement and complaints handling.
It is also consulting on which FCA rules to apply to firms that will become newly authorised as a result of the regulation of ESG ratings.
The FCA asks for comment by 31 March 2026, and will publish feedback later in the year, with the new regime taking effect in June 2028.