The ICMA and the IRSG, known for their influential roles in the financial sector, have made a significant move in the realm of ESG.
The ICMA, a cornerstone in the capital market sector, collaborates with the IRSG, a strategic body in regulatory matters, showcasing their commitment to sustainable finance.
This initiative aims to address the increasing reliance on third-party data and ratings in the ESG market. Recognizing the need for consistency and reliability in this area, ICMA and IRSG’s code of conduct is a response to a growing demand for transparency and standardization in ESG ratings and data products.
ICMA operates at the heart of the capital market, providing a platform for industry stakeholders. It focuses on promoting best practices and maintaining standards. Similarly, the IRSG plays a pivotal role in shaping regulatory strategies, bridging the gap between finance and policy.
The newly launched code of conduct for ESG ratings and data product providers is a framework designed to promote transparency, good governance, and conflict of interest management. It emphasizes strengthening systems and controls within the ESG sector, aligning with global standards.
This code, while voluntary, sets a benchmark for providers outside the scope of potential future regulation. It aligns with the International Organization of Securities Commissions’ (IOSCO) recommendations, marking a significant step towards 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 serve as a reference point in these ongoing deliberations.
FCA Director of ESG, Sacha Sadan, remarked, “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.”
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