IOSCO Seeks Comment on ESG Ratings and Data Providers
Commentary by Steven Lofchie
IOSCO is seeking feedback on proposed recommendations in a Consultation Report on Environmental, Social and Governance ("ESG") Ratings and Data Providers.
The proposed recommendations attempt to mitigate "risks and address some of the challenges faced by users of products and services from ESG ratings and data providers, and the companies that are the subject of these ESG ratings and data products."
IOSCO stated that its goal is to help IOSCO members "in understanding the implications of the activities of ESG ratings and data providers and in establishing frameworks to mitigate risks stemming from these activities."
IOSCO highlighted that the lack of transparency on current methodologies and uneven coverage could lead to inconsistencies in investment strategies and raises "serious questions about relevance, reliability and greenwashing."
Commentary
IOSCO's Report identified many of the same concerns raised by SEC Commissioner Hester Peirce, who has been urging the SEC not to rush to mandate ESG disclosure.