As firms grow increasingly reliant on third party ESG data and ratings products, we support this industry-led solution to increase transparency and trust in this growing market.
We are pleased to welcome the launch of the industry group’s consultation on a voluntary Code of Conduct[2].
In 2022, we appointed the International Capital Market Association and the International Regulatory Strategy Group to convene an industry group to develop a voluntary code. The Group is co-chaired by M&G, Moody’s, London Stock Exchange Group and Slaughter and May, with us, HM Treasury (HMT) and other relevant financial regulators acting as observers.
As part of the Code’s development, the group engaged with standard-setters in other jurisdictions to ensure international consistency.
Sacha Sadan, Director of ESG, said:
‘Today is an important step in increasing transparency and trust in the growing market for ESG data and ratings products. It’s also vital that the Code has been developed with international consistency in mind. We thank the Secretariat for their hard work and encourage everyone to take part in the consultation.’
The Code consultation will run for 3 months, until 5 October 2023. The Code will be updated and finalised by the end of 2023.
HMT is consulting on whether our regulatory perimeter should be extended to include ESG ratings providers. The consultation has just closed and we will continue to work closely with them as they consider the responses and next steps.
If agreed, introducing regulation would take time. The Code will play an important role in raising standards in the short-term, as well as continuing to apply to any firms that fall out of the scope of potential future regulation.