The ICMA and the IRSG, influential entities in the financial sector, have taken a noteworthy step in the ESG domain. The ICMA, a key player in the capital market, has joined forces with the IRSG, a strategic regulatory body, signaling their dedication to sustainable finance.
This joint effort addresses the growing reliance on third-party data and ratings in the ESG market. Acknowledging the necessity for consistency and reliability, the ICMA and IRSG’s code of conduct responds to the increasing demand for transparency and standardization in ESG ratings and data products.
Operating at the core of the capital market, ICMA provides a platform for industry stakeholders, focusing on best practices and standards. Similarly, the IRSG plays a crucial role in shaping regulatory strategies, connecting finance and policy.
The newly introduced code of conduct for ESG ratings and data product providers serves as a framework promoting transparency, good governance, and conflict of interest management. It emphasizes enhancing systems and controls within the ESG sector, aligning with global standards.
While voluntary, this code sets a benchmark for providers beyond potential future regulation, aligning with IOSCO recommendations and advancing harmonized global practices in ESG reporting.
In the first half of 2023, the UK government, in consultation with the FCA, explored extending regulatory boundaries to include ESG ratings providers. This code will be a reference point in these ongoing deliberations. FCA Director of ESG, Sacha Sadan, stated, “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.”
By FCCT Editorial Team
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