ESG Ratings: Final Regime (Financial Conduct Authority)

Summary

• The FCA received 90 consultation responses from a wide range of stakeholders following the December 2025 consultation paper.p.4
• From 29 June 2028, all in-scope ESG rating providers will be required to be FCA-authorised to carry out ESG ratings activity in the UK.p.5
• The authorisation gateway opens on 24 June 2027, supported by a pre-application support service starting in February 2027.p.6
• Providers must notify rated entities with a minimum notice period of 2 business days before making a rating available for the first time.p.32
• Firms with a forecast annual revenue of £500,000 or more from UK ESG ratings activities will pay a Category 6 application fee of £11,260.p.46
• The estimated total compliance cost of the final rules is £99.80m over 10 years in present value terms, generating an estimated net benefit of £569.82m.p.53

Key insights

1. The FCA supports methodological diversity and does not prescribe a specific analytical approach for ESG ratings.p.4
2. Baseline FCA handbook standards apply to ESG rating providers, but the Consumer Duty is explicitly excluded.p.7
3. Public transparency disclosures require providers to detail methodologies, coverage, data quality policies, and review practices.p.12
4. Rated entities that are not direct users will receive detailed non-public disclosures upon request rather than by default.p.14
5. Authorised providers must maintain sufficient senior governance and oversight capability in the UK without needing to locate all rating activities locally.p.18
6. ESG rating providers must give direct users advance notice of material methodology changes, but are not required to notify rated entities in advance.p.23
7. Public disclosure of conflicts of interest is expected only as a last resort where material risks to rating integrity cannot be reasonably prevented or managed.p.26
8. ESG rating providers will be categorised as Core firms under the Senior Managers and Certification Regime.p.39
9. The jurisdiction of the Financial Ombudsman Service and coverage under the Financial Services Compensation Scheme will not apply to ESG rating activities.p.38