ESG Ratings and Data Providers

As interest in sustainable investing has increased, so too has the importance of ESG data and ratings that measure the performance of assets and underlying companies. ESG ratings and data providers thus play an essential role in the sustainable finance ecosystem by providing information on and assessments of companies, that are material to investment decisions.

There is a heavy reliance on ESG ratings and data providers among financial market participants without the internal capacity to gather and process large volumes of data on a wide range of ESG metrics. However, despite this fundamental importance, ESG ratings and data providers are not subject to any specific regulatory requirements concerning conflicts of interest or the methodologies that they apply. Consequently, the European Commission has announced its intention to further assess the role of ESG ratings and data providers with a view to informing future regluatory initiatives.