FCA group to develop code of conduct for ESG data and ratings providers

The FCA has formed a group to develop a voluntary code of conduct for ESG data and ratings providers, as mooted in the feedback to its discussion chapter on ESG integration in UK capital markets.

An increasing reliance on third-party ESG data and ratings services necessitates greater regulatory oversight of these providers, the regulator said, to foster transparency and trust in the market. The FCA is awaiting a response from the Treasury on whether its regulatory perimeters will be extended to enable the UK watchdog to develop a regulatory regime focused on areas highlighted in the International Organization of Securities Commissions' recommendations. These include transparency, good governance, management of conflicts of interest, and systems and controls. FCA warns of clamp...