Government Regulating ESG Ratings Providers ‘Legitimises’ The Industry, Claim Critics

Critics have warned that the government’s announcement to regulate ESG ratings providers in its latest budget means that the controversial practice will be “legitimised.” In its Spring budget last week, the Conservative government said that it will regulate providers of Environmental, Social and Governance (ESG) ratings to users within the UK by bringing them into the regulatory perimeter of the Financial Conduct Authority. The proposals were first put forward in last March 2023 as part of the government’s green finance strategy. ESG investing is used to screen investments based on corporate policies and to encourage companies to promote “sustainable practices” such as reducing carbon emissions. ...