Statement in Connection with the European Commission’s Proposal for Regulation of ESG Rating Activities

NEW YORK (June 15, 2023) — Institutional Shareholder Services (ISS) is committed to providing ESG research offerings with a high level of independence, integrity, and transparency. In that spirit, we welcome a common European Union approach to enhance the integrity, transparency, good governance, and independence of ESG rating activities across the provider industry.

ISS is reviewing the proposal in detail. Our initial impression is that the Commission has put forward several constructive provisions.

“The marketplace is best served by a diversity of research approaches and so we appreciate the Commission’s efforts to ensure that a variety of independently derived ESG rating opinions and methodologies continue to be available to investor users,” said Lorraine Kelly, ISS’ Global Head of Investment Stewardship Solutions. “ISS supports the Commission in not setting minimum requirements on the content of ESG ratings and recognizing that disclosure of information concerning rating models should not reveal sensitive business information or impede innovation.”

“ISS will continue to engage with global policymakers to highlight the need for harmonization across markets to help drive comparability and consistency across disclosures and to advocate for an ESG data ecosystem that does not hinder providers’ ability to create a competitive service that meets investors’ varied needs.”

ESG Corporate Ratings are made available through ISS ESG, the sustainable investment arm of ISS. Click here to visit the ISS ESG Gateway where you can access high-level ESG Corporate Ratings and click here for an overview of the ESG Corporate Ratings methodology.

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