European plans to regulate ESG ratings providers has won backing from the region’s pension and insurance industries.
PensionsEurope and Insurance Europe, which represent companies across the bloc, said the European Commission’s (EC) proposed Rating Regulation would “lead to a significant enhancement in the transparency of ESG ratings”.
The EC wants to bring ratings providers under the wings of its regulator to help prevent greenwashing and to ensure greater visibility in the calculations that go into each provider’s rating. Critics describe the firms’ methodologies as “black boxes” for the lack of transparency into how they are determined.
“There is an urgent need for the availability and transparency of ESG data to be improved, not only to fulfil regulatory requirements but, more importantly, to reallocate capital to sustainable assets,” the two organisations wrote in a joint statement.
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