ESG: ESMA publishes final draft RTS under ESG Rating Regulation

What's New

On 15 October 2025, the European Securities and Markets Authority (ESMA) published a final report containing draft regulatory technical standards (RTS) under the Regulation on the transparency and integrity of ESG rating activities (the ESG Rating Regulation).

Background

The ESG Rating Regulation was published in the Official Journal of the European Union on 12 December 2024 and will apply from 02 July 2026. For more information, see our client note here.

To facilitate the implementation of the ESG Rating Regulation, ESMA was mandated to develop RTS in the areas of authorisation, recognition, separation of activities, and disclosures. As we reported at the time, ESMA launched a public consultation on the draft RTS in May 2025, which closed on 20 June 2025.

Contents of the Final Report

In the final report, ESMA noted that it had revised the three draft RTS to take into account feedback from the public consultation, whilst also being mindful of the EU's wider initiative for simplification and burden reduction. These revisions notably include:

• For the RTS on authorisation and recognition, removing or simplifying a number of information requirements to be submitted to ESMA as part of the application process

• For the RTS on separation of business, while the requirement for a physical separation of business remains, other requirements such as those for network segregation have been clarified or removed where they were judged to impose excessive burden, and

• For the RTS on disclosures to be made to the public, users of ratings, and rated entities, a number of elements have been revised to ensure they are practically achievable for ESG rating providers, while others have been removed where they were judged to not provide sufficient added value for the burden that was imposed.

Next Steps

ESMA has submitted the draft RTS to the European Commission for adoption by means of a Commission Delegated Regulation.

The Commission now has three months to decide whether to endorse the draft RTS and adopt them. If adopted, the RTS will be subject to non-objection by the European Parliament and Council of the EU.