Britain to propose law next year to regulate ESG raters

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🗞️ Driving the news: Britain plans to propose a law next year to regulate ESG (environmental, social, and governance) rating providers
• This move aims to increase transparency and ensure reliability in ESG benchmarks, which are crucial for sustainable investments

🔭 The context: Currently, ESG raters in the UK adhere to a voluntary code of conduct, unlike the European Union which already has mandatory rules
• The new regulation aligns with recommendations from the International Organisation for Securities Commissions (IOSCO)

🌍 Why it matters for the planet: Proper regulation of ESG ratings can prevent greenwashing and ensure that investments genuinely contribute to sustainability
• This can boost investor confidence and channel more funds into truly sustainable projects

⏭️ What's next: The UK Treasury will respond quickly to industry consultations and introduce legislation next year
• This will align the UK's approach with global standards and support the growth of sustainable finance

💬 One quote: "The new approach will boost growth, help deliver a cleaner economy and ensure that companies in critical sectors like defence are not penalised by opaque ratings," said the finance ministry

📈 One stat: ESG raters like S&P Global, Moody's, MSCI, and Morningstar's Sustainalytics are major players in the market, influencing billions of dollars in investments

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