FCA moves to standardise ESG ratings as regulation drives ESG plans

GlobalData surveying indicates that companies are astir apt to found environment, social, and governance (ESG) show plans successful effect to outer regulatory and fiscal pressures. Meanwhile, the FCA has acceptable retired caller proposals aimed astatine improving the transparency and reliability of ESG ratings crossed the market.

GlobalData’s Thematic Intelligence: ESG Sentiment Polls Q3 2025 shows that authorities and unit from authorities is the starring operator for implementing ESG show plans, selected by 37.7% of respondents. This is followed by a tendency to amended fiscal show astatine 27.2%, portion unit from customers accounts for 17.6%. Pressure from investors is cited by 10.8% and unit from workers by 6.8%. The results item that portion fiscal incentives stay relevant, regulatory unit is by acold the most-influential origin shaping ESG adoption.

Meanwhile, the Financial Conduct Authority (FCA) has outlined proposals to guarantee ESG ratings go more-transparent, reliable, and comparable, pursuing the government’s determination to bring these ratings nether the regulator’s remit. Supported by 95% of consultation respondents, the proposals purpose to code long-standing concerns astir inconsistent methodologies and constricted transparency that impact insurers’ quality to measure ESG risks. The FCA’s model focuses connected improving standing transparency, strengthening governance and oversight, managing conflicts of interest, and mounting wide expectations astir stakeholder engagement and complaints handling. Existing FCA rules volition besides use proportionately to caller firms entering the regime.

With authorities identified arsenic the apical operator for companies mounting up ESG show plans, the instauration of clearer regulatory expectations connected ESG ratings reinforces the compliance pressures already shaping firm behaviour. At the aforesaid time, more-transparent and accordant standing methodologies volition enactment companies facing financial, customer, investor, and workforce scrutiny; ensuring ESG show tin beryllium assessed and communicated much credibly crossed each stakeholder groups.

The operation of regulatory pressure, stakeholder expectations, and the request for credible ESG metrics means insurers and different companies volition look rising demands for demonstrable ESG performance. Aligning interior ESG frameworks with the FCA’s strengthened standards volition not lone enactment compliance, but besides heighten firms’ quality to benchmark progress, place risks, and pass responsibly with investors and customers. As ESG expectations proceed to evolve, transparent and well-governed show plans volition go progressively indispensable crossed the fiscal services sector.