ESG ratings providers to come under FCA regulation

Written by Adam Cadle

28/10/2025

ESG ratings providers in the UK are to come under the regulatory remit of the Financial Conduct Authority (FCA), which said it would consult on new rules before the end of the year.

The FCA said that its recommendations would focus on transparency, on governance, on systems and controls and on conflicts of interest, and that it would produce guidance to help firms assess whether their activities will require authorisation.

“This marks a significant milestone in the UK’s commitment to enhancing transparency and trust in this market,” the FCA added.

“ESG ratings continue to play a critical role in influencing investment and capital allocation decisions. The legislation, which was broadly supported by the industry, will provide us with the necessary powers to regulate ESG ratings providers – an important step towards ensuring that there are transparent, reliable and comparable ESG ratings.

“In parallel with the Government finalising its legislation, we have been developing our regime for ESG ratings. Now that the legislation has been laid before Parliament, we intend to consult on our proposed rules before the end of the year.

“We are committed to working with industry, Government and wider stakeholders to ensure our approach to regulation is practical, proportionate and supports innovation. This is an opportunity to raise the bar for transparency and trust, while ensuring the market remains competitive and resilient.”

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