The European Securities and Markets Authority (ESMA) has issued a public statement reminding third-party providers of environmental, social and governance (ESG) ratings that from 2 July 2026 they must either be authorised under the new EU regulatory framework or have their ratings recognised by ESMA to continue publishing or distributing them in the European Union. The statement, published on 1 July 2026, warns that any unauthorised publication or distribution after that date would breach EU law.
ESMA's statement clarifies the transitional arrangements for ESG rating providers that have not yet obtained authorisation or recognition. It notes that the new regime, established by the ESG Rating Regulation (EU) 2024/3005, entered into force on 2 July 2024, with a two-year transitional period ending on 2 July 2026. Providers that have applied for authorisation or recognition before the deadline may continue their activities until ESMA takes a final decision on their application. However, those that have not submitted an application by 2 July 2026 must cease publication or distribution of ESG ratings in the EU immediately.
The statement also addresses the treatment of ESG ratings published by third-country providers. Such ratings may be used in the EU only if the provider is recognised by ESMA or endorsed by an authorised EU provider. ESMA emphasises that it will take a risk-based approach to enforcement, focusing on cases where non-compliance poses the greatest harm to investors and market integrity.
Stakeholder impact is significant. EU-based ESG rating providers face the immediate need to ensure their authorisation applications are submitted before the deadline to avoid disruption. Third-country providers must either seek recognition or rely on endorsement by an authorised EU entity, which may increase costs and administrative burdens. Investors and asset managers who rely on ESG ratings for portfolio decisions may face reduced availability of ratings from non-compliant providers, potentially affecting their ability to meet regulatory disclosure requirements under the Sustainable Finance Disclosure Regulation (SFDR). Conversely, the new framework aims to enhance transparency and reliability of ESG ratings, benefiting end investors by reducing greenwashing risks.
ESMA's statement serves as a final reminder ahead of the 2 July deadline. The authority is expected to publish a list of authorised and recognised providers on its website, and market participants are advised to verify the status of their ESG rating providers before engaging their services.