EU Commission plans to regulate ESG ratings

The EU Commission wants to create a legal framework for ESG ratings by rating agencies and make ratings clearer and more transparent. A legislative proposal is to be presented in mid-June. There are now around 150 agencies worldwide that offer ESG ratings. The largest and most important players, on which the market is heavily focused (such as MSCI, ISS and Moody’s), are US or British firms. MSCI, for example, holds a 30 percent market share. According to the Commission, „major ESG ratings providers based outside the EU currently provide services to investors in the EU.“