Featured Product

    IOSCO Proposes Recommendations on ESG Ratings and Data Providers

    July 26, 2021

    The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers. The proposed recommendations are intended to mitigate risks stemming from ESG activities; they are also intended to address certain challenges faced by the users of products and services of ESG ratings and data providers and by the companies that are the subject of these ESG ratings and data products. The comment period for this consultation report ends on September 06, 2021.

    The consultation report is intend to assist IOSCO members in understanding the implications of the activities of ESG ratings and data providers and in establishing frameworks to mitigate risks stemming from these activities. The report proposes examines the market landscape for ESG ratings and data providers, before moving on to make recommendations for securities markets regulators, ESG rating and data products providers, users of these products and services, and companies subject to these providers’ review. The report recommends that regulators of ESG ratings and data products could consider to enhance focus on the use of ESG ratings and data products and ESG ratings and data product providers in their jurisdictions. Moreover, ESG ratings and data products providers could consider

    • issuing high-quality ESG ratings and data products based on publicly disclosed data sources and other information sources, where necessary, using transparent and defined methodologies.
    • ensuring their decisions are, to the best of their knowledge, independent and free from political or economic pressures and from conflicts of interest arising due to the ESG ratings and data products providers’ organizational structure, business, or financial activities, or the financial interests of the ESG ratings and ESG data products providers’ employees.
    • avoiding activities, procedures, or relationships that may compromise, or appear to compromise, the independence and objectivity of the ESG rating and ESG data products provider’s operations or identifying, managing, and mitigating the activities that may lead to those compromises.
    • making high levels of public disclosure and transparency an objective in their ESG ratings and data products, including their methodologies and processes.
    • maintaining, in confidence, all non-public information communicated to them by any company, or its agents, related to their ESG ratings and data products, in a manner appropriate in the circumstances.
    • improving information gathering processes with entities covered by their products in a manner that is efficient and leads to more effective outcomes for both the providers and these entities.
    • responding to and addressing issues flagged by entities covered by their ESG ratings and data products while maintaining the objectivity of these products.

    The consultation also proposes entities subject to assessment by ESG ratings and data products providers could consider streamlining their disclosure processes for sustainability-related information to the extent possible, keeping in mind regulatory and other legal requirements in their jurisdictions. Finally, the recommendation for users of ESG ratings and data products is to consider conducting due diligence on the ESG ratings and data products that they use in their internal processes. This due diligence could include an understanding of what is being rated or assessed by the product, how it is being rated or assessed, and the limitations and the purposes for which the product is being used. 


    Related Links

    Comment Due Date: September 06, 2021

    Keywords: International, Banking, Securities, ESG, ESG Ratings, Data Providers, Sustainable Finance, Disclosures, IOSCO

    Featured Experts
    Related Articles

    EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models

    The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.

    June 21, 2022 WebPage Regulatory News

    BIS Hub Updates Work Program for 2022, Announces New Projects

    The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.

    June 17, 2022 WebPage Regulatory News

    US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule

    Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)

    June 16, 2022 WebPage Regulatory News

    EIOPA Consults on Review of Securitization Framework in Solvency II

    The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.

    June 16, 2022 WebPage Regulatory News

    UK Authorities Issue Regulatory and Reporting Updates for Banks

    The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.

    June 15, 2022 WebPage Regulatory News

    BaFin Consults on Resolvability Requirements for Resolution Planning

    The Federal Financial Supervisory Authority of Germany (BaFin) proposed to amend the “Capital Investment Conduct And Organization Ordinance” and issued a draft circular on the minimum resolvability requirements for resolution planning.

    June 10, 2022 WebPage Regulatory News

    EBA Consults on Certain Standards and Guidelines Under CRR and BRRD

    The European Banking Authority (EBA) proposed guidelines, for the resolution authorities, on the publication of the write-down and conversion and bail-in exchange mechanic, with the comment period ending on September 07, 2022.

    June 08, 2022 WebPage Regulatory News

    OJK Publishes Regulatory Updates for Financial Sector Entities

    The Financial Services Authority of Indonesia (OJK) is strengthening cooperation with the Australian Prudential Regulation Authority (APRA) and the Japanese Financial Services Agency (JFSA)

    June 03, 2022 WebPage Regulatory News

    EU Publishes Rules on DLT and Data Governance

    The European Parliament and the Council published Regulation 2022/868 on European data governance (Data Governance Act).

    June 03, 2022 WebPage Regulatory News

    EBA Publishes Phase 2 of Reporting Framework 3.2

    The European Banking Authority (EBA) published phase 2 of its reporting framework 3.2. The technical package supports the implementation of the updated reporting framework by providing standard specifications

    June 03, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8267