EFAMA: ‘The market for ESG ratings should be transparent and competitive’

The European Fund and Asset Management Association (EFAMA) has released today a new issue of its Market Insights series titled “ESG ratings of Article 8 and 9 funds: assessing the current market and policy recommendations for the future”.   This research was motivated by the development of the market for ESG ratings against the backdrop of a growing demand for Article 8 and 9 funds, two ESG-related fund categories introduced by the Sustainability Financial Disclosure Regulation (SFDR).

We have analysed the ESG ratings assigned by two commercial providers – Refinitiv and Morningstar Direct – to a large sample of Article 8 and 9 funds, focusing on the differences between ratings given to the same funds by these firms and between ratings of Article 8 and Article 9 funds.  Based on our findings, we present policy recommendations to help ensure that the market for ESG ratings functions well in the future.

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