In June 2023, the European Commission wrote to ESMA to request technical advice on better incorporating ESG factors into credit ratings. As a result, ESMA is consulting on potential amendments to the EU's regulatory framework for credit rating agencies. 

Amendments would be made to Annex I of Regulation 1060/2009 on Credit Rating Agencies (the CRA Regulation), which sets out the broad regulatory framework for credit rating agencies, and Commission Delegated Regulation (EU) No 447/2012, which sets standards for credit rating methodologies. The proposed amendments include:

• Requiring credit rating agencies to make reference to environmental, social and governance factors they have considered when deciding on ratings
• Ensuring credit rating methodologies are sufficiently detailed to accurately consider ESG factors.

The deadline for responses to the consultation is 21 June 2024. If you would like to share your views and contribute to the PRI’s response, please get in touch with elliot.sutcliffe@unpri.org.