UK FCA ESG Data and Ratings Code

On Nov. 22, UK FCA reported group to develop ESG code of conduct.

  • FCA announced group to develop code of conduct for ESG data and ratings providers.
  • Follows UK FCA Jun. 2022 feedback on capital market ESG integration, see #141880.
  • Overview
  • As financial services firms integrate ESG into activities and expand their ESG-focused products, they are increasingly reliant on third-party ESG data and ratings services.
  • In feedback statement on ESG integration in UK capital markets (FS22/4), expressed support for introducing regulatory oversight of certain ESG data and ratings providers.
  • Support greater transparency and trust in market for ESG data and ratings services.
  • If Treasury extends regulatory perimeter, FCA to take steps to develop and consult on proportionate, effective regulatory regime, focus on areas in IOSCO recommendations.
  • Transparency, governance, management of conflicts of interest, systems and controls.
  • While UK GVT considers this, and to maintain momentum, FCA working to convene and support industry participants to develop and follow a voluntary code of conduct.
  • Appointed the International Capital Market Association (ICMA) and the International Regulatory Strategy Group (IRSG) as the Secretariat leading the group's work.
  • Next Steps
  • The Secretariat will convene independent group to develop the code; FCA, BoE, other relevant financial regulators and government departments will sit as active observers.
  • The group will be co-chaired by M&G, Moody’s, London Stock Exchange Group (LSEG) and Slaughter and May, and composed of stakeholders including investors, ESG data and ratings providers, and rated entities; will aim to meet for first time later this year.
  • FCA also updated its sustainable finance webpage with information on code of conduct.
  • ICMA Press Release
  • On the same day, ICMA announced appointment by FCA to jointly provide Secretariat for a working group to develop a code of conduct for ESG data and ratings providers.
  • CEO welcomed the mandate from FCA to conduct this working group with the IRSG.
  • Combined, in-depth experience of UK and global financial markets will help ensure an unbiased and balanced approach to the development of code for market participants.

Regulators ICMA; UK FCA
Entity Types B/D; Bank; BS; CU; Depo; Exch; IA; IB; Ins; Inv Co; Pension
Reference PR, 11/22/2022; FS22/4; ESG
Functions Compliance; Legal; Registration/Licensing; Reporting; Risk
Countries United Kingdom
Category National Regulator ; Trade Association
Products Banking; Commodities; Fixed Income; Fund Mgt; Insurance; Issuance/IPO; Loan; Pensions; Securities; Wealth Mgt
Regions EMEA
Rule Type Concept
Rule Date 11/22/2022
Effective Date 11/22/2022
Rule Id 154174
Linked to Rule :141880
Reg. Last Update 11/22/2022
Report Section UK

Last substantive update on 11/23/2022