Europe consults further on ESG ratings
The European Commission has issued a consultation on the functioning of the market for environmental, social and governance (ESG) ratings in Europe, and how credit rating agencies incorporate ESG risks in their creditworthiness assessment. It complements an earlier Call for Evidence by the European Securities and Markets Authority focussing on market structure.
Responses to the consultation are due by 10 June. They will feed into an impact assessment being made this year that will evaluate whether a possible policy initiative on ESG ratings and on sustainability factors in credit ratings is needed, considering impacts, costs and options for intervention. “These actions are expected to contribute to the achievement of the European green deal objectives by improving the quality of information on which basis investors, businesses and other stakeholders take decisions impacting the transition to a sustainable economy,” says the Commission. We argue that digital disclosure is crucial in this goal of ensuring data quality and the decision-usefulness of ESG ratings.
Read more here.