9 December 2022
If you are covering the news that as part of the Edinburgh Reforms the government will be consulting on bringing Environmental, Social, and Governance (ESG) ratings providers into the regulatory perimeter, please find below a comment from Gemma Woodward, head of responsible investment at Quilter Cheviot:
“Given the proliferation of firms offering ratings on environmental, social and governance factors, and the different methodologies behind these ratings, it is welcoming to see the government look at benefits of bringing them into the regulatory regime. There is an increasing dependency on data and metrics produced by these firms from asset managers and owners in order to meet regulatory reporting requirements such as TCFD, as well as using these within their responsible investment approaches, such as integrating ESG factors within the investment process.
“If the ratings providers issued the raw data then this would be less of an issue as we could have the opportunity to properly interrogate and understand the data and what it is saying. However, their focus increasingly is on aggregated data which is subjective as it will often reflect the ESG rating provider’s view.”
