FESE response to ESMA consultation on the technical standards under the ESG Ratings Regulation

FESE welcomes the opportunity to respond to the ESMA consultation on the technical standards under the ESG Ratings Regulation.

In the consultation, FESE calls for a level playing field between EU and third-country players when it comes to regulatory requirements, a more specific and clear definition of what constitutes an ‘ESG rating’, and ask for further clarifications from ESMA on accreditation/certification processes as well as labelling activities.

Additionally, while FESE supports adequate safeguards against conflicts of interest, we advise against overly strict requirements like using ‘legal separation’ and ‘Chinese walls’ as interchangeable notions, as it might hinder the development of the industry and have disruptive effects.

Finally, while exchanges are supportive of methodological transparency for ESG rating providers, it is important to maintain the independence of developing rating methodologies. FESE underlines the need for flexibility in structuring disclosures and suggests allowing cross-referencing to avoid repetitive information. FESE also seeks clarification on whether size-related requirements from Art. 5 of the ESGR Regulation apply specifically to ESG activities or the total operations of a group.