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EU ESG law should end ratings ‘Wild West’ and ‘boost’ investor confidence

Agreement on EU regulation offers the possibility for separate E, S and G ratings
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EU ESG law should end ratings ‘Wild West’ and ‘boost’ investor confidenceImage: Stefan Wermuth/Bloomberg

The European Council and parliament have reached a provisional agreement on a proposal for a regulation on environmental, social and governance rating activities, aimed at boosting investor confidence in sustainable products.

The agreed text aims to reinforce transparency around ESG ratings and foresees the possibility to provide separate E, S and G ratings. If a single rating is provided, the weighting of the E, S and G factors will have to be made explicit.

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