LONDON — Britain’s Financial Conduct Authority has proposed a new rulebook to bring ESG ratings providers under direct supervision, targeting conflicts of interest and boosting transparency in a market that influences investment decisions worldwide, Dec. 1, 2025.
The plan would make most firms that sell ESG scores or assessments to UK clients seek authorization ahead of a June 29, 2028, start date, while imposing tougher controls around governance, methodology disclosure and staff behavior.
What FCA ESG ratings rules would change
Under the FCA’s consultation, the firms behind ESG ratings would have to show they can produce ratings independently and consistently — and explain how they do it. The regulator’s proposed framework covers disclosure of methodologies and data sources, stronger oversight and quality controls, and new expectations for how providers engage with rated companies and handle complaints. The FCA outlined the package in its announcement setting out proposals for ESG ratings and in its consultation hub CP25/34 on ESG ratings regulation.
At the center of the crackdown are conflicts of interest — a long-running concern where a provider both rates a company and sells it advisory services, or where commercial incentives may shape scoring outcomes. Reuters reported the FCA is proposing restrictions including preventing employees involved in ESG ratings from trading the securities they rate, alongside disclosure and governance measures aimed at curbing bias.
“Our proposals will give those who use ESG ratings greater trust and confidence — supporting our goal of increasing trust and transparency in sustainable finance,” Sacha Sadan, the FCA’s director of sustainable finance, said.
FCA ESG ratings timeline: consultation now, regime in 2028
The FCA said the consultation is open until March 31, 2026, with final rules expected in late 2026 and an authorization process intended to give providers time to prepare before the 2028 go-live date. The regulator’s full consultation paper is published as a downloadable document CP25/34 (PDF), and professional-services firms have highlighted the phased timetable, including a likely application window ahead of implementation. PwC summary of the FCA’s proposed ESG ratings regime.
Why FCA ESG ratings are in the spotlight
The UK push is part of a broader attempt to “clean up” ESG data markets after investors and companies complained about opaque scoring models and wide divergence between providers. That debate has been building for years, including the government’s 2023 consultation on bringing ESG ratings into the regulatory perimeter.
In 2024, HM Treasury published its response, signaling strong support for regulation and setting the stage for FCA rulemaking. International work has also shaped the direction of travel: IOSCO’s 2021 report urged stronger governance, transparency and conflict management for ESG ratings and data providers.
If adopted, the FCA ESG ratings regime would move the UK closer to other jurisdictions tightening oversight, while giving investors and rated firms clearer routes to challenge errors and understand why ESG ratings differ — without forcing a single “standard” score across the market.
