ESG Ratings and Sustainability Risks in Credit Ratings: ECON Draft Report Made Available

The ECON Committee published the draft report on the ESG proposal. The Rapporteur introduced stricter disclosure requirements, made changes to competition between ESG rating providers, and the transparency of rating activities. In her draft Report, Rapporteur Aurore Lalucq (S&D, France) submitted a total of 97 amendments to the text proposed by the Commission.


The main changes introduced are especially on the integrity and reliability of ESG rating activities (AMs 32 - 61). ESG rating providers would be required to provide separate environment, social, and governance ratings instead of providing a single ESG metric aggregating all factors. In addition, entities that are part of groups with ESG rating providers would be prohibited from providing consulting or auditing activities to any rated companies.


The Commission and ESMA would need to publish a report three years after the entry into force of the Regulation analysing whether to extend the scope to ESG data providers, and they would need to publish another report on the functioning of the ESG rating market.


The Rapporteur’s draft Report is provisionally expected to be discussed on 13 November 2023. The MEPs of the ECON Committee are expected to submit their amendments to the Rapporteur’s draft Report until the 10 October 2023.  A vote on the (compromise) amendments to the draft Report and the draft Report itself would then take place, with a view to adopting a Report that would be submitted to the Plenary for confirmation. It is expected to be adopted by the Committee on 28 November 2023.


FEBIS is involved in the discussions, tabling amendments to the report and engaging with the respective shadow rapporteurs.



Source: ECON 

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