On November 19, 2024, the Council of the European Union adopted a new regulation on environmental, social, and governance (ESG) rating activities. This regulation aims to make ESG ratings in the EU more consistent, transparent, and comparable, strengthening investor confidence in sustainable financial products.
The main innovations introduced include:
- Reliability and comparability: More uniform standards for ESG ratings are established, ensuring more consistent assessments across different providers.
- Transparency and integrity: Rating providers are required to disclose the methodologies and information sources used, allowing investors to better understand the basis of the evaluations.
- Conflict of interest management: The principle of separating commercial activities is introduced to avoid interference, ensuring that assessments are independent and impartial.
The regulation will enter into force 20 days after its publication in the Official Journal of the EU and will be applicable 18 months after that date.
Source: Parlamento Europeo
