DRWG Delivers Voluntary ESG Ratings Code of Conduct

The ESG Data and Ratings Working Group (DRWG) has released its new voluntary code of conduct for ESG ratings and data products providers. The DRWG-developed code aims to improve the availability and quality of information provided to investors at product and entity levels, enhance market integrity through increased transparency, good governance and sound systems and controls, and improve competition through better comparability of products and providers. The group was convened in November last year by the International Capital Market Association (ICMA) and the International Regulatory Strategy Group and is supported by the UK’s Financial Conduct Authority (FCA). It was co-chaired by investment manager M&G, ratings agency Moody’s, London Stock Exchange Group and law firm Slaughter and May. The initial draft of the code was published on 5 July, followed by a three-month consultation period. The ICMA will take ownership of the finalised code. The code aligns with International Organization of Securities Commissions recommendations to ensure global consistency in ESG ratings regulation. The DRWG stressed they were mindful of related developments in jurisdictions such as Japan, the EU, Singapore, and Hong Kong while developing the code. The code follows the recent release of the Monetary Authority of Singapore’s final Code of Conduct for ESG rating and data product providers and the EU’s unveiling of a draft law to regulate ESG raters earlier this year.

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