On 16 October 2025, ESMA published its Final Report on the Regulatory Technical Standards (RTS) under the ESG Ratings Regulation (ERR), a milestone on the journey to regulate providers of environmental, social and governance (ESG) ratings in the EU. The final RTS set the blueprint for authorization, recognition and disclosure requirements for ESG rating providers, signaling a major step toward enhancing the transparency and integrity of ESG-rating activities.
Due to the increased acidity of the ocean, the ocean chemistry experiences massive changes that adversely affect not just aquatic beings but also the human population.
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Due to the increased acidity of the ocean, the ocean chemistry experiences massive changes that adversely affect not just aquatic beings but also the human population.
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Due to the increased acidity of the ocean, the ocean chemistry experiences massive changes that adversely affect not just aquatic beings but also the human population.
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The RTS has now been submitted to the European Commission as delegated regulations, and the EU Parliament and the Council of the EU will have three months to decide whether to object. Once adopted, the RTS will enter into force 20 days after their publication in the Official Journal and will apply from 2 July 2026, aligning with the regulatory entry date of the ESG Ratings Regulation itself.
Due to the increased acidity of the ocean, the ocean chemistry experiences massive changes that adversely affect not just aquatic beings but also the human population.
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Abhigyan Gupta
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The European Securities and Markets Authority (ESMA) is the EU’s financial markets regulator. Its role is to enhance investor protection, ensure orderly financial markets, and improve transparency across the EU. ESMA develops rules, supervises key financial entities, and coordinates oversight among national regulators.
The ESG Ratings Regulation is a new EU rule that makes sure companies providing ESG ratings work in a clear, fair, and trustworthy way. ESG ratings measure how well a company performs on environmental, social, and governance issues, and investors rely on these scores to make decisions. The regulation requires rating providers to be officially approved, avoid conflicts of interest, and clearly explain how they create their ratings. In short, it helps ensure that ESG ratings are transparent, unbiased, and reliable.
ESMA’s Regulatory Technical Standards (RTS) provide detailed rules on how the ESG Ratings Regulation must be implemented. They define specific requirements for: • authorization or recognition of ESG rating providers, • governance and conflict-of-interest safeguards, and • transparency and disclosure obligations. These standards operationalize the regulation and ensure consistent application across the EU.
In the EU, ESMA is the direct supervisor and regulator of ESG rating providers. It grants authorization to EU-based providers, recognizes or endorses non-EU providers, and monitors compliance with conduct, governance, and transparency rules.
ESG rating providers must publicly disclose: • rating methodologies and underlying assumptions, • data sources and their limitations, • how qualitative and quantitative inputs are used, • processes for revising methodologies, and • their business model and potential conflicts of interest. The purpose is to help users understand how ratings are produced and how reliable they are.
