FCA-convened industry group unveils code of conduct for ESG ratings and data providers

investmentweek.co.uk:

The code was set up to provider greater scrutiny and transparency within the ESG ratings and data products space, to provide markets with greater confidence in ESG data, especially considering the current efforts to achieve net zero.

The code was initially commissioned by the Financial Conduct Authority in 2022 and has been released following a three-month consultation period.

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The IRSG and ICMA explained the code was set up to provider greater scrutiny and transparency within the ESG ratings and data products space, to provide markets with greater confidence in ESG data.

IRSG said the code can be adopted on a voluntary basis and aims to enhance consistency, transparency and accountability in financial services to ensure markets have confidence in the integrity of ESG ratings and data products via enhanced systems, processes and controls.

The steering committee, which co-chaired the ESG data and ratings code of conduct working group (DRWG), said: «Members of the DRWG have sought to ensure that the code of conduct is internationally consistent, primarily by basing the code of conduct on the International Organisation of Securities Commissions' recommendations.

»The members also sought to bear in mind, in developing the code, related developments in jurisdictions such as Japan, the EU, Singapore and Hong Kong. We hope the code of conduct, although having roots in the UK, can provide an international model and play a role in helping to ensure consistent global standards for ESG ratings and data product providers."

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Farmida Bi, chair of the IRSG Council,