ESG ratings: deal ensures a transparent and competitive framework to favour truly sustainable business investments across the EU

No green transition is possible without private capital and EU companies’ support. That´s why Renew Europe welcomes today´s interinstitutional agreement on the Enviromental, Social and Governance (ESG) ratings regulation, aiming to set clear principles and rules to enhance reliability and transparency of ESG rating activities. This will enable investors and financial institutions to make better informed decisions regarding sustainable investments.

The ESG rating market suffers from a severe lack of transparency, which hinders investors and can enable misinformation and green washing. Thanks to Renew Europe´s contribution, the agreement with the Council achieves a balanced approach, giving flexibility to rating providers to develop and use tailor-made methods in the elaboration of these indicators, while enshrining stricter transparency requirements to increase confidence in the EU sustainable finance markets and accelerate our climate goals.

MEP Billy Kelleher (Fianna Fáil, Ireland), Renew Europe shadow rapporteur on ESG rating activities, stated:

“The ESG ratings market must be developed with integrity, quality and transparency so that investors can have confidence in the ratings when making sustainable investments. The agreement has struck a balance between ensuring integrity without stifling innovation or competition".