The EIRIS Foundation has submitted a response to the Financial Conduct Authority’s consultation paper CP25/34 on the proposed regulation of ESG ratings providers, a long-awaited step towards bringing transparency and accountability to a market that sits at the heart of sustainable investment.
The FCA’s consultation, published in December 2025, sets out a proposed regulatory framework for ESG ratings providers requiring FCA authorisation from June 2028. The EIRIS Foundation drew on its unique position, spanning decades of direct experience in ESG research, its role in creating one of the world’s first ESG ratings agencies, and its ongoing work across the investment chain, to offer considered and practical input.
Our Key Points
Across the questions we addressed, four themes came through strongly in our response:
- Tailor governance requirements to purpose. The standards applied to ESG ratings agencies should reflect what those agencies are actually for, identifying ESG risks and opportunities over the long term, rather than simply transplanting requirements designed for banks or fund managers. In particular, we highlighted the importance of strong, well-resourced senior leadership for ongoing methodology development and improvement.
- Disclose more, and make it genuinely public. We welcomed the proposed minimum public disclosures but urged the FCA to ensure that “public means public” i.e readily accessible on providers’ websites, not quietly available only to direct subscribers. We also called for additional disclosure dimensions: whether a rating assesses the what (products and services) or the how (conduct and processes), whether incidents and allegations are incorporated, and what materiality lens is applied.
- Protect against responsible exit failures. Recent events, including the closure of Moody’s ESG offering and several providers withdrawing conflict-related research under US political pressure, illustrate a risk beyond simple financial failure: the disappearance of data that clients depend on. We called for “responsible exit” principles, such as open-sourcing discontinued methodologies or facilitating transition to alternative services.
- Broaden stakeholder consultation — before, not just after. ESG ratings affect workers, communities and civil society, not just companies and investors. We argued that rating methodologies should be developed with wider stakeholder input, using advisory committees, and that this consultation should happen proactively and not only as part of a complaints process.
The EIRIS Foundation helped create one of the world’s first ESG ratings agencies in 1983. We bring that history and the lessons it taught us about what makes ESG analysis genuinely useful to this consultation.
“Good regulation here has the potential to significantly raise the quality of the market, but it must be shaped by an understanding of what ESG ratings are actually trying to do.“
Peter Webster, EIRIS Foundation CEO
Common Ground Across the Responsible Investment Community
The EIRIS Foundation is not alone in broadly welcoming these proposals while urging the FCA to go further in key areas. A clear set of shared priorities is emerging across responsible investment organisations.
UKSIF’s response to the same consultation broadly welcomes the proposed framework while calling for stronger proportionality measures for smaller providers, greater comparability in disclosures, and clearer treatment of asset managers’ internal ratings. The PRI, drawing on its work on ESG ratings regulation at the EU level, has consistently advocated for transparency, independence and robust governance as baseline requirements. Across these organisations, a common thread is clear: the direction of travel is right, but the detail matters and the FCA has a real opportunity to set a high bar.
What Comes Next
The FCA will review responses and publish a Policy Statement with final rules in Q4 2026. The new regime will come into effect on 29 June 2028, with an authorisations gateway opening in June 2027.
The EIRIS Foundation will continue to engage on this agenda. If you would like to discuss any of the points raised in our response, please do not hesitate to get in touch.
The EIRIS Foundation is a charity working in the public interest across the investment chain to build a more just and sustainable financial system. We have been active in the responsible investment space since 1983. The FCA consultation paper CP25/34 is available at fca.org.uk.