The European Securities and Markets Authority (ESMA), has published its advice and guidelines on ESG considerations and disclosure requirements for the credit rating market.
ESMA say it would be “inadvisable” to amend the CRA Regulation to require the consideration of sustainability characteristics in all rating assessments. However, ESMA say guidelines on disclosure requirements are intended to improve the overall quality and consistency of CRAs’ press releases related to their rating activity. The guidelines require greater transparency around whether ESG factors were a key driver of the credit rating action. This will allow the users of ratings to better assess where ESG factors are affecting credit rating actions.