3 November 2026
If you are covering the publication of the FCA's policy statement on the final rules for ESG rating providers tomorrow, please find below a press comment from Gemma Woodward, head of responsible investment at Quilter Cheviot:
“The FCA’s confirmation of the final policy statement for ESG ratings is a welcome step to make a burgeoning industry a more transparent, and ultimately useful, one. ESG ratings have grown in popularity over recent years as demand for responsible and sustainable investments proliferated quickly at the turn of the decade, yet so much of what went into them was subjective and interpreted in differing ways. As such, moving to a regime where disclosures are clearly made around methodologies, data samples, AI and limitations, amongst other things, should result in better decision making for investment professionals.
“ESG ratings have been shown to have real influence over investment decisions, with asset managers often over-relying on what they provide to comply with their own reporting. With SDR and anti-greenwashing rules now raising the bar significantly, it is only right that bringing the providers behind them within the regulatory perimeter is a sensible evolution of the market.
“However, as with any score-based disclosure, this new set of rules should not be interpreted as there being one objectively correct ESG score. ESG rating providers will continue to have differing methodologies, definitions and samples, and while they must disclose this, it is up to allocators to interrogate that data and not allow it to replace thorough due diligence.
"Indeed, when these rules were first proposed, our hope was that regulation would make it easier for users to understand and interrogate the data and methodologies behind ESG ratings. The final regime has kept that focus on transparency, but as the market develops we need to make sure the data being received translates into genuinely useful information for investors rather than disclosure for disclosure's sake.”
