FCA ESG Ratings Regulation: Providers Need Authorization

The Financial Conduct Authority published final rules on November 3, 2026 that require ESG rating providers operating in the UK market to be authorized from June 29, 2028, with applications opening on June 24, 2027. The FCA ESG ratings regulation is the first time the regulator has supervised the sector.

The rules, set out in policy statement PS26/22, “ESG ratings: final regime,” cover how ratings are produced, governed and communicated. They do not prescribe a particular sustainability view or methodology.

For banks, asset managers and large companies, the change reaches both sides of the market. Asset managers, lenders and benchmark administrators use ESG ratings to inform capital allocation and manage risk, and the companies being rated will deal with providers that must meet FCA standards on governance and engagement.

What the FCA ESG ratings regulation requires

The framework introduces requirements on transparency, governance, systems and controls, the management of conflicts of interest, and engagement with users of ESG ratings and rated entities. The FCA said it is designed to be proportionate to firms’ size and activities.

Providers must comply with baseline FCA rules plus tailored requirements intended to support trust in the market. The approach is informed by recommendations from the International Organization of Securities Commissions (IOSCO) and the ICMA Code of Conduct for ESG Ratings and Data Providers.

The FCA stated the aims as improving the transparency, reliability and comparability of ESG ratings. It said the rules should support competition, innovation and growth as well as raise standards.

“Trusted information is essential for well-functioning markets. These rules will help improve transparency and raise standards across the ESG ratings market while supporting competition, innovation and growth.”

Laura Dawes, director of authorisations and sustainable finance, FCA

Dawes added that firms “should check now whether they are in scope and start preparing for authorisation.”

Scope of the ESG ratings regulation

The FCA ESG ratings regulation applies to firms or organizations providing ESG ratings and assessments. The FCA defines ESG ratings generally as assessments of how companies or other entities, assets or financial products perform against environmental, social and governance criteria.

The regulated activity was created by HM Treasury in The Financial Services and Markets Act 2000 (Regulated Activities) (ESG Ratings) Order 2025, made in October 2025. According to the FCA, 95% of respondents to the government’s consultation supported the move.

From June 29, 2028, firms providing ESG ratings in the UK need FCA authorization and the relevant permission before carrying on the activity, unless an exclusion applies. PS26/22 includes perimeter guidance to help firms decide when authorization may be required. The FCA has told firms to check whether any product or service that includes an assessment, score or opinion on ESG matters falls within the activity.

Timeline for FCA ESG ratings authorization

The FCA is staggering applications by projected revenue. Firms expecting ESG ratings revenue of £500,000 or more in the 12 months after applying must apply between June 24 and July 29, 2027. Firms below that line apply between July 30 and August 31, 2027.

The FCA said applying early gives it more time to assess applications. It also said submitting an application does not guarantee authorization, and firms that apply late may not receive a decision before the regime starts.

February 2027: the Pre-Application Support Service opens to meeting requests.
December 7, 2026: FCA webinar on PS26/22 and the new regime.
January 2027: a second webinar on the authorization process, and further application information from the FCA.
June 24, 2027: authorization gateway opens.
June 29, 2028: regime takes effect.

The final rules follow consultation paper CP25/34, which ran from December 1, 2025 to March 31, 2026. The FCA has also added a voluntary reporting pilot for ESG rating providers to its next steps.

How the UK rules compare with the EU regime

Providers active in both markets face two regimes on different clocks. Regulation (EU) 2024/3005, the EU ESG Ratings Regulation, has applied since July 2, 2026, with the European Securities and Markets Authority (ESMA) as direct supervisor.

Under the EU transition, providers notified ESMA between July 2 and August 2, 2026. The latest date to submit an application was November 2, 2026, a day before the FCA published its final rules. Small EU-based providers can use a three-year temporary regime under Article 5.

The EU regulation also sets routes for third-country providers. EU providers may endorse ratings from non-EU providers in the same group under Article 11, and Article 12 sets separate timelines for third-country providers.

The FCA ESG ratings regulation starts about two years later and runs through FCA authorization rather than ESMA registration. The FCA has not set out an equivalence or recognition route in the materials it published with the press release. Providers selling into both markets should expect separate applications, since the UK application windows do not open until 2027.

What buyers and rated companies should expect

Banks and asset managers that buy ESG ratings use them in investment and lending decisions. Under the UK regime, providers will have to meet transparency and conflicts standards, and users of ratings are among the groups the new engagement rules cover.

Compliance teams can use the two-year runway to map which ratings and data feeds feed into product governance, disclosure and risk models. Firms that already hold ESG data in a consolidated ESG data stack will find it easier to see which suppliers fall inside the perimeter. Asset managers reporting under the Sustainable Finance Disclosure Regulation in the EU may also need to track which of their providers hold ESMA status.

Providers will need their own conflicts controls. A rating provider that also sells consulting or data services to the companies it rates has an obvious conflict to manage, and the FCA rules require firms to manage conflicts of interest as part of the regime. Teams drafting those policies can start from the conflicts of interest template pack.

The FCA cited demand from investors. Its Financial Lives Survey 2024 found 72% of adults with investments or a defined contribution pension wanted their investments to do some good as well as provide a financial return.

What comes next for the regime

The FCA’s policy statement page lists a webinar on PS26/22 for December 7, 2026. The regulator’s ESG ratings authorization page says pre-application meetings open in February 2027, ahead of the gateway on June 24, 2027.