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ARTICLE · 19 FEBRUARY 2024

Agreement On EU ESG Ratings Regulation

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On 5 February 2024, the EU Council and the EU Parliament agreed on a provisional text for the ESG Ratings Regulation (the Regulation).

European UnionEnvironment
Hilger Von Livonius
Hilger Von Livonius
Philipp Riedl
Philipp Riedl

On 5 February 2024, the EU Council and the EU Parliament agreed on a provisional text for the ESG Ratings Regulation (the Regulation).

Under the Regulation, in-scope EU providers of ESG ratings will require a licence from, and be supervised by, European Securities and Markets Authority (ESMA).

In-scope ESG ratings will provide an opinion on a company's or a financial instrument's sustainability profile, by assessing its exposure to sustainability risk and its impact on society and the environment.

The Regulation imposes certain operational requirements such as rules relating to the methodology for ratings and certain disclosure requirements. It provides for the possibility of issuing separate E, S and G ratings. If only a single rating is issued, the weighting of the E, S and G factors will need to be stated.

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