Industry led working group launches consultation on Code of Conduct for ESG ratings and data providers


DRWG Draft Voluntary Code of Conduct for ESG Ratings and Data Product Providers For Consultation July 20235 July 2023 The ESG Data and Ratings Working Group (DRWG), with Secretariat provided by the International Capital Market Association (ICMA) and the International Regulatory Strategy Group (IRSG), has today launched a consultation to develop a voluntary Code of Conduct for ESG Ratings and Data Product Providers.

As highlighted in a report from the International Organization of Securities Commissions (IOSCO) from November 2021, the use of environmental, social and governance (ESG) ratings and data products has grown considerably in response to investors’ appetite for investing in companies that take account of sustainability. As a result, the role and influence of ESG ratings and data products providers in financial markets have grown significantly.

As such, there have been calls for closer scrutiny of the transparency, quality and reliability of ESG ratings and data products, to provide the market with confidence.

Against this background, in November 2022 the Financial Conduct Authority appointed ICMA and the IRSG to set up and provide the Secretariat for the DRWG.

The DRWG is chaired by M&G and Moody’s, with the London Stock Exchange Group and Slaughter & May as vice chairs. The working group brings together stakeholders such as ratings and data providers, asset managers, asset owners, banks, corporate rated entities, NGOs, academics and other organisations.

The consultation period will run to 5 October 2023. Interested stakeholders are invited to submit their comments via email to

Announcing the launch of the consultation period, Sacha Sadan, FCA Director of ESG, said: "Today is an important step in increasing transparency and trust in the growing market for ESG data and ratings products. It’s also vital that the Code has been developed with international consistency in mind. We thank the Secretariat for their hard work and encourage everyone to take part in the consultation."

Nicholas Pfaff, Deputy CEO and Head of Sustainable Finance at ICMA commented: "ESG ratings and data products are essential resources for the sustainable finance market. ICMA actively supports this important industry-led initiative by jointly providing the Secretariat."

The Steering Committee of the DRWG added: "Members of the DRWG have worked hard to make sure the Code of Conduct is internationally consistent, primarily through close alignment with the International Organization of Securities Commissions' recommendations but also through taking into account developments in jurisdictions such as Japan, Singapore and the EU. We hope the Code of Conduct will be a significant step in the development of consistent global standards for ESG ratings and data product providers."

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