FCA finalises ESG ratings rules ahead of 2028 authorisation regime

What happened

The Financial Conduct Authority has published final rules for ESG rating providers, establishing a UK regulatory framework for how environmental, social and governance ratings are produced, governed and communicated.

The regime takes effect on 29 June 2028. From that date, firms providing ESG ratings in the UK will need FCA authorisation and the relevant permission before undertaking the activity, unless an exemption applies.

Providers operating in the UK market will need to apply for authorisation from 24 June 2027. The FCA said application periods would be staggered and encouraged firms to apply as early as possible within their allocated window.

The requirements cover transparency, governance, systems and controls, conflicts of interest, and engagement with ratings users and rated entities. According to the regulator, the framework is designed to be proportionate to firms’ size and activities.

Why it matters

ESG ratings are used by asset managers, lenders and benchmark administrators to inform capital allocation and manage risk. The FCA said its rules aim to improve the transparency, reliability and comparability of the information those users rely on.

For providers, the framework introduces an authorisation requirement alongside standards governing their operations. The FCA has published guidance to help firms assess whether their activities fall within scope and urged them to review the final rules and begin implementation preparations.

The regime does not prescribe a particular sustainability view or ratings methodology. Its focus is on the processes and controls behind ratings and how they are communicated.

Context / What to watch

The final rules, published in policy statement PS26/22, follow government legislation in October 2025 bringing ESG ratings within the FCA’s remit. The regulator’s subsequent consultation ran from 1 December 2025 to 31 March 2026.

The approach draws on international standards, including recommendations from the International Organization of Securities Commissions. The FCA will offer webinars and access to its Pre-Application Support Service to help providers prepare.