The UK Government is set to introduce new legislation next year to regulate agencies that evaluate Environmental, Social, and Governance (ESG) performance. This move aims to enhance transparency in the largely unregulated sector, which influences substantial investment decisions.
The Financial Conduct Authority will oversee the new regime, aligning it with international standards and EU regulations to ensure clarity in ESG ratings. The legislation is expected to address concerns about opaque rating criteria and support the growth of the sustainable finance sector by providing clearer guidelines and improving oversight of ESG data and ratings.
