FCA publishes final rules for ESG rating providers

The Financial Conduct Authority (FCA) has published its final rules for environmental, social and governance (ESG) rating providers, bringing them into its regulatory scope for the first time.

The new rules aim to raise standards in the market by improving the transparency, reliability and comparability of ESG ratings, as the FCA seeks to build confidence in the information investors rely on.

An initial consultation on proposals to regulate ESG ratings providers was launched in late 2025, with the regulator estimating that the changes would deliver approximately £500m in net benefits over the next decade.

Firms or organisations providing ESG ratings and assessments will be subject to the new regime, with the regulator publishing guidance to help firms understand whether they are in scope.

The framework includes requirements that cover transparency, governance, systems and controls, the management of conflicts of interest, and engagement with users of ESG ratings and rated entities.

The FCA said it was designed to be proportionate to firms’ sizes and activities, and was informed by existing international standards, including recommendations from the International Organization of Securities Commissions.

ESG rating providers in the UK will need to be authorised by the FCA and can apply from 24 June 2027.

The regulator urged firms that could be in scope to start preparing now, with the FCA to provide pre-application support to assist those seeking authorisation.

“Trusted information is essential for well-functioning markets,” said FCA director of authorisations and sustainable finance, Laura Dawes.

“These rules will help improve transparency and raise standards across the ESG ratings market while supporting competition, innovation and growth.

“Firms should check now whether they are in scope and start preparing for authorisation. We'll continue to provide practical support to help them prepare.”

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