The Board of the International Organization of Securities Commissions (IOSCO) has published a set of recommendations applicable to ESG Ratings and Data Product Providers.
Ashley Alder, Chairman of IOSCO and CEO of the Hong Kong SFC said: “ESG ratings and third-party data products have played an important role in the ESG ecosystem so far, especially in the absence of consistent and comparable issuer disclosures. Their significance and usefulness will only continue as capital markets intensify efforts to support the shift towards a net zero economy. This is why IOSCO has undertaken this work.”
Better transparency of ESG ratings and data can help mitigate greenwashing.https://t.co/MXdfdnYCaL pic.twitter.com/jCZCyUbhDc
— IOSCO Press (@IOSCOPress) November 23, 2021
The market for ESG ratings and data has grown over the past few years, in part due to a lack of consistent information disclosures at the entity level. As this market does not typically fall within the remit of securities regulators, IOSCO suggests that regulators could consider focusing greater attention on the use of ESG ratings and data products and the activities of ESG rating and data products providers in their jurisdictions. This could help to increase trust in ESG ratings and data going forward.
IOSCO has also set out specific recommendations on what regulators could consider when developing their framework. These recommendations are underpinned by more specific guidance to assist members when navigating this new market.
The recommendations include promoting more transparency regarding the methodologies that ESG ratings and data product providers use in developing their products; ensuring their procedures for managing conflicts of interest are appropriate and improving communication channels between providers and the entities covered by their ESG ratings or data products without undermining their impartiality.
Erik Thedéen, Chair of the IOSCO Sustainable Finance Task Force and Director General of Finansinspektionen of Sweden, said: “This report represents an important milestone in the development of ESG markets. Investors should be able to understand and trust the ESG ratings and data products they use; implementation of IOSCO’s recommendations will help achieve that outcome.”
Source: IOSCO
NEWSLETTER SIGN UP
And receive exclusive articles on securities markets
It's been a month since we had our Women In Finance Awards in New York City at the Plaza! Take a look back tab some moments, and nominate for our upcoming awards in Mexico City and Singapore here: https://www.marketsmedia.com/category/events/
4
Citadel Securities told the SEC that trading tokenized equities should remain under existing market rules, a position that drew responses from various crypto industry groups. @ShannyBasar for @MarketsMedia:
SEC Commissioner Mark Uyeda argued that private assets belong in retirement plans, saying diversified alts can improve risk-adjusted returns and that the answer to optimal exposure “is not zero.” @ShannyBasar reporting for @MarketsMedia:
COO of the Year Award winner! 🏆
Discover how Jennifer Kaiser of Marex earned the 2025 Women in Finance COO of the Year recognition.
Related articles
-
Regulatory clarity has shifted how investors are approaching digital assets.
-
Tadawul Group's tech & innovation arm aims to lead the digital transformation of Saudi Arabia’s markets.
-
The new tape will be the unified successor to the three existing consolidated equity market data feeds.
-
LSEG will provide AI-ready content, multi-asset class data and workflow solutions.
-
The white paper marks the first step to support more reliable and effective pre-trade transparency.