The Regulation, as proposed, is a step in the right direction in regulating the ESG ratings market and improve the quality of ESG ratings. However, some uncertainties and issues remain, especially with regards to the Regulation’s scope and in the context of unsolicited ratings. It is welcome that more transparency and reliability is being brought into the procedures regarding methodologies. The proposal lacks, most of all, explicit requirements to facilitate individual engagement and feedback opportunities between ESG rating providers and rated entities, and an obligation for rating providers to publicly consult on changes to methodologies.
