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FCA welcomes the launch of industry code of conduct for ESG ratings and data products providers
The code is owned and maintained by the ICMA. In 2022, the FCA appointed the ICMA and IRSG to convene an industry group to develop a globally consistent voluntary code for those providing the third-party data and ratings increasingly relied upon by the market.
The FCA, the Treasury and other national and international financial regulators acted as observers as the code was agreed.
In line with IOSCO’s recommendations, the code focuses on promoting transparency, good governance, management of conflicts of interest, and strengthening systems and controls in the sector.
Sacha Sadan, FCA Director of Environmental, Social and Governance, said:
‘As part of the FCA ESG Strategy, we committed to using our voice and influence to promote globally aligned solutions where possible.
‘With its strong focus on international consistency, this industry-owned code will play a key role in increasing transparency and trust in the ESG data and ratings market.
‘We encourage all ESG data and ratings providers to engage with and sign up to the code.’
In the first half of 2023, the UK government consulted on whether and how the FCA’s regulatory perimeter should be extended to include ESG ratings providers. The FCA continues to work closely with the government as it considers its next steps.
The code launched will provide a benchmark for any providers that fall outside the scope of potential future regulation.
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