New EU ESG regulations require compliance by end of 2025, overseen by ESMA, prompting industry reactions.
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The new European Union regulation on ESG (environmental, social, and governance) ratings has been positively received by the banking sector, regulatory bodies, and civil society, although compliance remains a challenge. Providers of these ESG ratings must meet new requirements and obtain licenses by the end of 2025, after which they will be supervised by ESMA and required to submit regular reports. An ESG rating agency stated that this regulation is an important step toward a more transparent and structured market, benefiting investors, rated companies, and the market generally, while also noting several criticisms of the new rules.
