Britain's financial regulator is about to start policing ESG rating companies for the first time after the sector blew up into a multibillion-dollar mess. The FCA dropped a consultation saying these agencies need to explain their scoring methods and deal with conflicts of interest because the right people are getting wildly different ratings depending on which firm they ask.
The watchdog thinks formal oversight could save around half a billion over ten years by cutting down on all the extra work fund managers have to do when they compare inconsistent scores. Almost everyone who responded to a government survey backed the regulation plan, and it lines up with international recommendations, even though ministers have been screaming at regulators to cut red tape everywhere else.
Final rules should land by late 2026 after the consultation wraps up.
The watchdog thinks formal oversight could save around half a billion over ten years by cutting down on all the extra work fund managers have to do when they compare inconsistent scores. Almost everyone who responded to a government survey backed the regulation plan, and it lines up with international recommendations, even though ministers have been screaming at regulators to cut red tape everywhere else.
Final rules should land by late 2026 after the consultation wraps up.
