(1 December 2025 – United Kingdom) The UK’s Financial Conduct Authority (FCA) has outlined plans to strengthen trust in ESG ratings through a new transparency and governance framework.
ESG ratings – used to guide investment decisions, risk assessments and regulatory reporting – have faced increasing scrutiny due to inconsistent methodologies and limited disclosure. Global spending on ESG data is expected to reach $2.2bn in 2025, yet concerns around reliability continue to grow.
Following the government’s decision to bring ESG ratings under FCA oversight, the regulator is proposing clear, proportionate rules aimed at improving market confidence.
The proposed framework includes:
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Greater comparability to help firms benchmark ratings.
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Stronger governance, controls and conflict-of-interest management.
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Clear expectations for stakeholder engagement and complaints handling.
Sacha Sadan, director of sustainable finance at the FCA, says: “Our proposals will give those who use ESG ratings greater trust and confidence – supporting our goal of increasing trust and transparency in sustainable finance. This will enhance the UK’s reputation as a global sustainable finance hub.”
Consultation runs until 31 March 2026, with final rules due in Q4 2026 and implementation from June 2028.