FMSB Review Targets Increased ESG Ratings Transparency

The Financial Markets Standards Board (FMSB), a non-profit focused on fair and efficient wholesale markets, has published a review examining ESG ratings methodologies and data collection processes with a view to increasing transparency and comparability. The review highlights topics including issues associated with limited transparency and market understanding of ratings, the different objectives of rating products and the impact of controversies on an issuer’s ESG rating, which it says can be material but little understood. Myles McGuinness, FMSB’s CEO, said: “We hope that this Spotlight Review can help to support increased transparency around collection processes and methodologies as a means of facilitating comparability of ESG ratings.” 

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