The European Securities and Markets Authority (ESMA) consultation on technical standards under the Regulation on the transparency and integrity of ESG rating activities closes on 20 June.
The consultation was launched following adoption of the Regulation, which was published in the Official Journal of the European Union on 27 November 2024, to bring about a common regulatory approach on the “integrity, transparency, comparability where possible, responsibility, reliability, good governance and independence of ESG rating activities.”
ESMA is tasked with deliving the regulatory technical standards to make the Regulation work. It has a deadline of 2 October 2025 to deliver these in draft form to the European Commission.
“These draft technical standards establish key elements of the regulatory framework in a number of areas:
- First, they set out the information that should be provided in the applications for authorisation and recognition of an ESG rating provider. These requirements are dealt with in a single technical standard and provide clarity as to what information should be common to the applications of EU and Non-EU entities, and what additional information should be provided by non-EU entities in the case of an application for recognition.
- Second, they set out the measures and safeguards that should be put in place to mitigate risks of conflicts of interest within ESG rating providers who carry out activities other than the provision of ESG ratings. These are divided into organisational requirements that are applicable to all ESG rating providers, and more specific technical and control measures that apply in the case of certain specified activities.
- Third, they specify in greater detail the information that is to be disclosed by ESG rating providers to the public, rated items, issuers and the users of ESG ratings. This will ensure that to the extent possible, ESG rating providers will disclose the required information in as comparable and consistent a manner as possible.
