EFAMA urges regulators to include third party ESG data providers in their new framework for ESG ratings providers

EFAMA has responded to the EC’s proposed new framework for ESG rating activities to enhance transparency and empower investors. The proposal ensures fair fees for ESG ratings services and excludes ratings produced internally by regulated financial market participants.
However, EFAMA urges the EC to consider the inclusion of ESG data providers and strengthening transparency:
EFAMA recommends that the legislative framework cover both ESG data and ESG ratings providers simultaneously. This approach aims to improve the quality and transparency of ESG data and ratings to provide reliable information for investors and regulators. EFAMA also suggests aligning the proposal with international standards, such as those recommended by the IOSCO. This alignment would enhance transparency regarding data sources, ESG KPIs, measurement methodologies, and the scope of business activities assessed.
EFAMA emphasizes that transparency is crucial for trust and accountability in the ESG rating industry, and encourages the EC to further enhance clarity and transparency for financial market participants and end investors.