EcoVadis Signs up to the UK Code of Conduct for ESG Ratings and Data Providers

April 16, 2024 EcoVadis EN

With a strong focus on international consistency, the voluntary code will be key to increasing transparency and trust in the ESG data and ratings market.

EcoVadis is pleased to formally sign up to the Code developed by the International Capital Markets Association (ICMA), which was launched earlier this year.

Voluntary oversight helps raise the bar for ESG ratings before regulatory regimes kick in. The UK already announced it will move forward with regulation later in 2024 and several similar initiatives are tabled in Singapore, Japan, South Korea and Hong Kong. 

The Code is intended to have a broad application across a range of ratings and data providers, including those operating outside financial markets such as EcoVadis. Its provisions are aligned with the recommendations initially proposed by the global regulatory forum IOSCO in 2022

Providers that opt-in to the Code will be expected to provide annual statements explaining their approach to implementation. EcoVadis is expected to publish this report six months after the endorsement at the latest.

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UK and Europe Move on Binding Rules for ESG Ratings

On March 6, the UK Treasury confirmed it will regulate ESG ratings, following a year-long consultation period. It’s proposed that both UK and overseas ratings providers who directly provide services to UK users would be in the scope of the regulation with the possibility that further activities may be brought within its remit. The results of the scoping review are yet to be published.

Both the voluntary code and the ensuing UK regulation are intended to be internationally consistent by taking into account developments in other jurisdictions, for example, the EU regulation bringing ESG ratings providers under the European Securities and Market Authority’s (ESMA) supervision. EcoVadis is already gearing up to obtain ESMA’s authorization.

As this emerging regulatory regime develops, we will continue monitoring outcomes and engaging policymakers with other industry players as a member of the Future of Sustainable Data Alliance.

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On December 14, 2023, ICMA unveiled a new globally operable Code of Conduct. The code was initially commissioned by the UK Financial Conduct Authority, developed in consultation with industry stakeholders and under the watchful eye of international observers from financial authorities in Singapore, Japan and Canada.

About the Author

EcoVadis EN

EcoVadis is a purpose-driven company whose mission is to provide the world's most trusted business sustainability ratings. Businesses of all sizes rely on EcoVadis’ expert intelligence and evidence-based ratings to manage risk and compliance, drive decarbonization, and improve the sustainability performance of their business and value chain. Its AI-powered risk mapping, actionable scorecards, benchmarks, carbon action tools, and insights guide a resilience and improvement journey for environmental, social and ethical practices across 200 industry categories and 175 countries.

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