The French Autorité des Marchés Financiers (AMF) renews its call for a European regulatory framework for providers of ESG data, ratings and related services.
In its response to the European targeted consultation which closed on June 10, the AMF considers that the market for ESG ratings will grow, influenced strongly by investor demand for ratings to make their investment decisions.
To support investor due diligence, AMF recommends greater transparency on methodologies and management of conflicts of interest. As demonstrated in recent scandals, AMF states that the lack of transparency on the objectives and methodologies of ESG products and services led to “mismatches between the expectations and understanding of users and the actual ESG performance of the investments”. Greater transparency will enable investors to better understand, assess and compare ESG products.
AMF specifically calls for a European regulation to mitigate the risks of reliance on non-EU organizations which do not apply the European sustainability framework.