PIMFA
Latest News
November 2025
- FCA Environmental, Social, Governance ratings: Proposed approach to regulation (CP 25/34)
The Financial Conduct Authority (FCA) has published proposals to ensure that environmental, social and governance (ESG) ratings are transparent, reliable and comparable. The proposals follow the decision by the government to bring ESG ratings within the FCA’s remit, supported by 95% of those who responded to its consultation. Introducing clear, proportionate rules for transparency and governance will help to build the market’s trust in ESG ratings and address concerns.
The proposals focus on 4 areas:
- Increased transparency – allowing easier comparisons for the benefit of both those who use ratings and those who are rated.
- Improved governance, systems and controls – to ensure clear decision-making, strong oversight and quality assurance.
- Identification and management of conflicts of interest.
- Setting clear expectations for stakeholder engagement and complaints handling.
The proposals draw on the existing voluntary industry code of conduct and International Organization of Securities Commissions (IOSCO) recommendations to support consistency and international competitiveness. The consultation is open until 31 March 2026. Final rules are expected in Q4 2026, with the new regime coming into effect from June 2028.
If you are not a member of PIMFA Sustainable Finance Working Group, and would like to get involved and help shape the PIMFA response to the consultation, please contact: Maja Erceg.
August 2025
- Climate Reporting Review
The FCA has set out the findings and next steps following their review into firms’ climate reporting. Overall, the FCA found that their rules have increased firms’ consideration of climate risks and supported their integration into firms’ decision-making. Firms were more transparent with their clients and consumers but encountered some challenges with the availability of data and consistent, well-developed methodologies.
The FCA has updated their sustainability reporting requirements webpage to clarify how firms in scope of both the Task Force on Climate-related Financial Disclosures (TCFD) and Sustainability Disclosure Requirements (SDR) rules can report efficiently under both regimes. The regulator is also considering how to streamline and enhance the sustainability reporting framework. The FCA wants to:
- Simplify disclosure requirements and ease unnecessary burdens on firms.
- Maintain good outcomes for clients and consumers and improve the decision-usefulness of reporting, building on the work of SDR to improve trust and reduce greenwashing.
Promote international alignment and help maintain the UK’s position as a global leader in sustainable finance.
October 2025
- FCA welcomes legislation to bring ESG ratings providers into regulation
The FCA has welcomed the government’s legislation to bring Environmental, Social and Governance (ESG) ratings providers into the regulator’s remit.
The legislation, which was broadly supported by the industry, will provide the FCA with the necessary powers to regulate ESG ratings providers – an important step towards ensuring that there are transparent, reliable and comparable ESG ratings. In parallel with the Government finalising its legislation, the FCA has been developing their regime for ESG ratings. Now that the legislation has been laid before Parliament, the regulator intends to consult on the proposed rules before the end of the year.
The proposals, informed by the International Organisation of Securities Commissions (IOSCO) recommendations, will focus on four key areas: transparency, governance, systems and controls, and conflicts of interest.
The FCA will also be producing guidance to help firms assess whether their activities will fall under regulation and require our authorisation.
