The Council of the European Union has approved a groundbreaking regulation to enhance the transparency, consistency, and comparability of environmental, social, and governance (ESG) ratings. This move aims to bolster investor confidence in sustainable financial products by addressing key concerns about the reliability of ESG assessments.
ESG ratings evaluate a company’s or financial instrument’s sustainability profile by examining its societal and environmental impact and exposure to sustainability risks. Given their growing influence on capital markets and sustainable investments, ensuring their credibility has become a priority.
