International Regulatory Strategy Group
Published 29 Jun 2023
The IRSG is pleased to respond to the HM Treasury (HMT) consultation on the future regulatory regime for Environmental, Social, and Governance (ESG) ratings providers. We support the overall direction of travel proposed in the consultation. There is a clear justification for increased regulation of ESG rating potential or actual conflicts of interest, and ultimately improving product quality and outcomes for rating users.
An intermediate step towards this will arise through the introduction of the voluntary Code of Conduct for ESG data and rating providers, the working group for which is supported by the IRSG (as co-secretariat with ICMA). The Code of Conduct is not, however, intended to be the final word on the matter of regulation for ESG rating providers, and the HMT proposals would seem the logical next step in this space.