FCA welcomes the launch of industry code of conduct for ESG ratings and data products providers

On December 14, 2023, the Financial Conduct Authority (FCA) published a press statement in which it informs of and strongly welcomes the publication of a new voluntary Code of Conduct for ESG Ratings and Data Products Providers which was developed by the International Capital Market Association (ICMA) and the International Regulatory Strategy Group upon request by the FCA. The code is meant to set a baseline standard for participating providers and to establish transparency and trust in the ESG rating market. Naturally, it is also intended to meet the needs of fund managers and ultimate investors seeking ESG data for their investments. As the FCA notes the FCA itself, „the Treasury and other national and international financial regulators acted as observers as the code was agreed“. The Code is now „owned“ by ICMA and is based on the corresponding IOSCO recommendations.
As far as the UK’s efforts are concerned to bring ESG rating providers under the remit of financial regulation, the FCA notes that it is still working on the issue and considering next steps in consultation with the government.