CP25/34: ESG ratings: proposed approach to regulation 

Read CP25/34[1]

Why we are consulting

From 29 June 2028, any firm wishing to provide certain types of ESG ratings in the UK will need FCA authorisation.

We are consulting on proposed rules and guidance for the regulation of ESG ratings providers, following recent legislation from HM Treasury[2] to bring ESG ratings within our regulatory perimeter.

We want to:

• Make ESG ratings more transparent, reliable and comparable.
• Support better decision-making and greater confidence in the market.
• Be proportionate and support growth in sustainable finance.

Our approach is shaped by international standards, including recommendations[3] from the International Organization of Securities Commissions (IOSCO).

Who this is for

Our proposals will be relevant to:

• ESG ratings providers.
• Users of ESG ratings (including asset managers, asset owners and benchmark administrators).
• Companies that are rated.
• Trade associations.

The consultation paper may also be of interest to:

• Civil society organisations.
• Other regulators and policy makers.
• Academics and journalists.

Next steps

We are asking for comments on this Consultation Paper by 31 March 2026.  

Online response form[4]

Submit your feedback online using our response form above or email [email protected].

Our approach to engagement will include webinars and roundtables to gather stakeholder feedback on our proposals.

We will review the feedback and plan to publish a Policy Statement (PS) with final rules in Q4 2026.  

The new regime will come into effect on 29 June 2028.

Background

ESG ratings assess the environmental, social and governance characteristics of organisations or products. They are widely used by asset managers, lenders, benchmark administrators and others, to inform capital allocation decisions and manage risk, among other uses.  

There are ongoing concerns about the quality, transparency, independence and consistency of ratings in the market.  

In 2023, the Treasury consulted on bringing ESG ratings under FCA regulation, with strong support from industry. In October 2025, the Government published legislation to bring ESG ratings into regulation, subject to final parliamentary approval.  

Our proposals draw on international standards and industry practice, including:

• IOSCO recommendations[3]
• the International Capital Market Association (ICMA) Code of Conduct for ESG Ratings and Data Providers[5]

We propose to apply existing FCA rules to ratings providers, alongside tailored requirements to address specific risks in this market.