97 Amendments of Stéphanie YON-COURTIN related to 2023/0177(COD)
Amendment 107 #
Proposal for a regulation
Recital 6
Recital 6
(6) As part of the Action Plan, the Commission commissioned a study entitled “Study on Sustainability Related Ratings, Data and Research”23 to take stock of the developments in the sustainability-related products and services market, identify the main market participants and highlight potential shortcomings. That study provided an inventory and classification of market actors, sustainability products and services available in the market and an analysis of the use and perceived quality of sustainability-related products and services by market participants. The study highlighted the lack of transparency and accuracy of Environmental, Social and Governance (‘ESG’) ratings methodologies and the lack of clarity over the operations of ESG rating providers.s and ESG data products providers. (Amendment also applied to recitals 11, 13, 14, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 29, 30: ESG ratings and ESG data products providers.) _________________ 23 European Commission, Directorate- General for Financial Stability, Financial Services and Capital Markets Union, Study on sustainability-related ratings, data and research, Publications Office of the European Union, 2021, https://data.europa.eu/doi/10.2874/14850.
Amendment 110 #
Proposal for a regulation
Recital 9
Recital 9
(9) At international level, the International Organization of Securities Commissions (‘IOSCO’) has issued a report in November 2021 containing a set of recommendations on ESG ratings and data products providers25 . _________________ 25 IOSCO Report on ESG ratings and data products providers, available at: https://www.iosco.org/library/pubdocs/pdf/ IOSCOPD690.pdf.
Amendment 111 #
Proposal for a regulation
Recital 10
Recital 10
(10) ESG ratings and ESG data products play an important role in global capital markets, as investors, borrowers and issuers increasingly use those ESG ratings as part of making informed, sustainable investment and financing decisions. Credit institutions, investment firms, insurance undertakings, assurance undertakings, and reinsurance undertakings, amongst others, often use those ESG ratings and ESG data products as a reference for the sustainability performance or for the sustainability risks and opportunities in their investment activity. Consequently, ESG ratings and ESG data products have a significant impact on the operation of the markets and on the trust and confidence of investors and consumers. To ensure that ESG ratings and ESG data products used in the Union are independent, objective and of adequate quality, it is important that ESG rating and ESG data products activities are conducted in accordance with the principles of integrity, transparency, responsibility, and good governance. Better comparability and increased reliability of ESG ratings and ESG data products would enhance the efficiency of that fast-growing market, thereby facilitating progress towards the objectives of the Green Deal. ESG data products can cover ESG “processed data”, including estimates or proxies of missing raw data from a company’s report. Processed ESG data are subject to a methodology applied by the provider that can be based on models or assumptions but may not qualify as ratings in the absence of a ranking system. Therefore processed ESG data should be subject to transparency requirements similarly to ESG ratings. ESG data products can also cover ESG “raw data” that do not need a specific methodology, model or assumption as they would generally come from the issuing entity, through its public report if available, or from responses to questionnaires or other sources. In such a case, there is no specific requirement of transparency over a methodology but the requirements of reliability, integrity, responsibility and good governance should apply in relation to the collection, formatting and re-dissemination of such data by the ESG data product provider.
Amendment 119 #
Proposal for a regulation
Recital 15
Recital 15
(15) Rules on ESG ratings and ESG data products providers should not apply to private ESG ratings or ESG data produced pursuant to an individual order and provided exclusively to the person who placed the order and which are not intended for public disclosure or distribution by subscription or other means. Neither should such rules apply to ESG ratings and ESG data produced by European financial undertakings that are used for internal purposes. ESG ratings developed by European or national authorities and by central banks should also be exempted from such rules. Finally, such rules should not apply to the provision of ESG data that do not include an element of rating or scor, or shared within their group, or provided or disclosed as required by or derived from the regulation applicable to EU financial undertakings, services or products, or as an element in conjunction with, and limited to, their regulated financial products or services. ESG ratings and are not subject to any modelling or analysis resulting in the development of an ESG ratingESG data developed by European or national authorities and by central banks should also be exempted from such rules.
Amendment 135 #
Proposal for a regulation
Recital 21
Recital 21
(21) To ensure a higher-level transparency, ESG rating providers should disclose information to the public on the methodologies, models and key rating assumptions which those providers use in their ESG rating activities and in each of their ESG ratings product. In light of the uses of ESG ratings by investors, the rating products should explicitly disclose which dimension of the double materiality the rating addresses, whether it is both material financial risk to the rated entity and the material impact of the rated entity on the environment and society in general or whether it takes into account only one of them. They should also explicitly disclose whether the rating addresses other dimensions. For the same reason, ESG rating providers should provide more detailed information on the methodologies, models and key rating assumptions to subscribers of ESG ratings. That information should enable users of ESG ratings to perform their own due diligence when assessing whether to rely or not on those ESG ratings. In particular, ESG ratings providers should disclose whether E, S, or G factors are taken into account, or an aggregation thereof, the rating given to each relevant factor, and the weighting each of these factors is given in the aggregation. Disclosure of information concerning models should however not reveal sensitive business information or impede innovation.
Amendment 139 #
Proposal for a regulation
Recital 21 a (new)
Recital 21 a (new)
(21 a) This Regulation should not interfere with the ESG rating methodologies or content. Diversity in the methodologies of ESG ratings providers ensures that the broad requirements of users can be met and promotes competition in the market.
Amendment 149 #
Proposal for a regulation
Article 2 – paragraph 1
Article 2 – paragraph 1
1. This Regulation applies to ESG ratings issued by ESG ratingand ESG data products issued by ESG ratings and ESG data products providers operating in the Union that are disclosed publicly or that are distributed to regulated financial undertakings in the Union, undertakings that fall under the scope of Directive 2013/34/EU of the European Parliament and of the Council, or Union or Member States public authorities.
Amendment 151 #
Proposal for a regulation
Article 2 – paragraph 2 – point a
Article 2 – paragraph 2 – point a
(a) private ESG ratings and ESG data products which are not intended for public disclosure or for distribution;
Amendment 154 #
Proposal for a regulation
Article 2 – paragraph 2 – point b
Article 2 – paragraph 2 – point b
(b) ESG ratings and ESG data products produced by regulated financial undertakings in the Union that are: i) used for internal purposes, or for providing in-house financial services andprovided to other entities that are part of the same consolidated group; or ii) provided or disclosed as an element in conjunction with, and limited to, a regulated financial service or product; or iii) required by or derived from the regulations applicable to EU regulated financial undertakings, services or products;
Amendment 160 #
Proposal for a regulation
Article 2 – paragraph 2 – point c
Article 2 – paragraph 2 – point c
Amendment 167 #
Proposal for a regulation
Article 2 – paragraph 2 – point e
Article 2 – paragraph 2 – point e
(e) products or services that incorporate an element of an ESG rating or of an ESG data product;
Amendment 175 #
Proposal for a regulation
Article 2 – paragraph 2 – point g
Article 2 – paragraph 2 – point g
(g) ESG ratings and ESG data products produced by Union or Member States’ public authorities;
Amendment 177 #
Proposal for a regulation
Article 2 – paragraph 2 – point h
Article 2 – paragraph 2 – point h
(h) ESG ratings and ESG data products from an authorised ESG ratings and ESG data products provider that are made available to users by a third party;
Amendment 178 #
Proposal for a regulation
Article 2 – paragraph 2 – point i – introductory part
Article 2 – paragraph 2 – point i – introductory part
(i) ESG ratings and ESG data products produced by central banks that fulfil all of the following conditions:
Amendment 190 #
Proposal for a regulation
Article 2 – paragraph 2 – point i a (new)
Article 2 – paragraph 2 – point i a (new)
(i a) investment reasearch products, such as equity research reports, which may incorporate ESG considerations, but which are different to the ratings of only ESG matters.
Amendment 201 #
Proposal for a regulation
Article 3 – paragraph 1 – point 1
Article 3 – paragraph 1 – point 1
(1) ‘ESG rating’ means an opinion, a score or a combination of both, regarding an entity, a financial instrument, a financial product, or an undertaking’s ESG profile or characteristics or exposure to ESG risks or the impact on people, society and the environment, that are based on an established methodology and defined ranking system of rating categories and that are providmarketed to third parties, irrespective of whether such ESG rating is explicitly labelled as ‘rating’ or ‘ESG score’;
Amendment 207 #
Proposal for a regulation
Article 3 – paragraph 1 – point 3 a (new)
Article 3 – paragraph 1 – point 3 a (new)
(3 a) ‘ESG data product’ means a product marketed as providing either a specific E, S, or G focus or a holistic or combined ESG focus on an entity, financial instrument, product or company’s ESG profile or characteristics or exposure to ESG, climatic or environmental risks or impact on society and the environment, whether or not they are explicitly labelled as “ESG data products”. ESG data products include: (i) ‘ESG raw data’ gathered from companies' publicly available reportings whenever possible or other sources otherwise, formatted and re-disseminated, and (ii) ‘ESG processed data’ that have been determined or estimated according to a methodology applied by the provider, including, but not limited to, estimates, sectoral data and proxies of missing raw data, and that do not qualify as ESG ratings;
Amendment 208 #
Proposal for a regulation
Article 3 – paragraph 1 – point 4
Article 3 – paragraph 1 – point 4
(4) ‘ESG ratings providers’ means a legal person whose occupation includes the offering and distributionmarketing of ESG ratings or scores on a professional basis, and for a charge;
Amendment 212 #
Proposal for a regulation
Article 3 – paragraph 1 – point 4 a (new)
Article 3 – paragraph 1 – point 4 a (new)
(4a) ‘ESG data products provider’ means a legal person whose occupation includes the marketing of ESG data products on a professional basis, and for a charge;
Amendment 213 #
Proposal for a regulation
Article 3 – paragraph 1 – point 4 b (new)
Article 3 – paragraph 1 – point 4 b (new)
(4 b) ‘ESG ratings and ESG data products provider’ cover an ESG rating provider, or an ESG data product provider, or a provider marketing both ESG ratings and ESG data products on a professional basis, and for a charge;
Amendment 219 #
Proposal for a regulation
Article 3 – paragraph 1 – point 11
Article 3 – paragraph 1 – point 11
(11) ‘group of ESG rating and ESG data products providers' means a group of undertakings established in the Union consisting of a parent undertaking and its subsidiaries within the meaning of Article 2 of Directive 2013/34/EU, and undertakings linked to each other by a relationship and whose occupation includes the provision of ESG ratings and/or ESG data products.
Amendment 220 #
Proposal for a regulation
Title II
Title II
Provision of ESG ratings and ESG data products in the Union
Amendment 221 #
Proposal for a regulation
Article 4 – title
Article 4 – title
Requirements to provide ESG ratings and ESG data products in the Union
Amendment 222 #
Proposal for a regulation
Article 4 – paragraph 1 – introductory part
Article 4 – paragraph 1 – introductory part
Any legal personESG rating or ESG data products provider who wishes to provide ESG ratings and/or ESG data products in the Union shall be subject to either of the following:
Amendment 224 #
Proposal for a regulation
Title II – Chapter 1 – title
Title II – Chapter 1 – title
1 Authorisation to provide ESG ratings and ESG data products in the Union
Amendment 225 #
Proposal for a regulation
Article 5 – title
Article 5 – title
Application for an authorisation to provide an ESG ratings and data products
Amendment 226 #
Proposal for a regulation
Article 5 – paragraph 1
Article 5 – paragraph 1
1. Legal personESG ratings and ESG data products providers established in the Union that wish to provide ESG ratings in the Union shall apply for authorisation to ESMA. (Amendment applies throughout article 5: ESG ratings and ESG data products providers.)
Amendment 231 #
Proposal for a regulation
Article 6 – title
Article 6 – title
Examination of the application for authorisation of ESG rating providers by ESMAs and ESG data products providers by ESMA (Amendment applies throughout article 6: ESG ratings and ESG data products providers.)
Amendment 239 #
Proposal for a regulation
Article 7 – title
Article 7 – title
Decision to grant or to refuse the authorisation to provide ESG ratings and ESG data products and notification of that decision (Amendment applies throughout article 7: ESG ratings and ESG data products providers.)
Amendment 240 #
1. ESMA shall withdraw or suspend the authorisation of an ESG ratings and ESG data products provider(s) in any of the following cases: (Amendment applies throughout article 8: ESG ratings and ESG data products providers.)
Amendment 242 #
Proposal for a regulation
Article 8 – paragraph 2 a (new)
Article 8 – paragraph 2 a (new)
2a. In the event of a withdrawal or suspension on the basis of the cases listed in points (b)-(d) of paragraph 1, ESMA shall publish the decision on its website.
Amendment 243 #
Proposal for a regulation
Title II – Chapter 2 – title
Title II – Chapter 2 – title
2 Provision of ESG ratings and ESG data products in the Union by third country ESG ratings and ESG data products providers
Amendment 244 #
Proposal for a regulation
Article 9 – paragraph 1 – introductory part
Article 9 – paragraph 1 – introductory part
1. A third country ESG ratings and ESG data products providers(s) that wishes to provide ESG ratings and ESG data products in the Union shall only be able to do so where it is included in the register referred to in Article 13 and provided that all of the following conditions have been complied with: (Amendment applies throughout article 9: ESG ratings and ESG data products providers.)
Amendment 253 #
Proposal for a regulation
Article 9 – paragraph 2 – subparagraph 2
Article 9 – paragraph 2 – subparagraph 2
For the purposes of point (a), the Commission shallby XXXX, ESMA shall adopt regulatory technical standards to further specify the implementation of the conditions listed in paragraph 2a), including takeing into account whether the legal framework and supervisory practice of a third country ensures compliance with the IOSCO recommendations for ESG Ratings and ESG data products published in November 2021.
Amendment 257 #
Proposal for a regulation
Article 10 – title
Article 10 – title
Endorsement of ESG ratings and ESG data products provided by a third country ESG rating providers and ESG data products provider(s) (Amendment applies throughout article 10: ESG ratings and ESG data products providers.)
Amendment 264 #
Proposal for a regulation
Article 10 – paragraph 1 – subparagraph 2
Article 10 – paragraph 1 – subparagraph 2
For the purposes of point (b) of the first subparagraph, ESMA may consider that, by XXXX, ESMA shall adopt regulatory technical standards to further specify the implementation of the conditions listed in paragraph 1, including taking into account whether compliance of the provision of the ESG rating to be endorsed with the IOSCO recommendations for ESG ratings and data products is equivalent to compliance with the requirements of this Regulation.
Amendment 268 #
Proposal for a regulation
Article 10 – paragraph 1 – subparagraph 2 a (new)
Article 10 – paragraph 1 – subparagraph 2 a (new)
The endorsement of ESG ratings or ESG data products cannot represent the main activity of an ESG rating provider authorised in accordance with Article 7.
Amendment 269 #
Proposal for a regulation
Article 10 – paragraph 1 – subparagraph 2 b (new)
Article 10 – paragraph 1 – subparagraph 2 b (new)
For the purposes of point (d) of the first subparagraph, ESMA shall develop regulatory technical standards to specify the objective reasons to be accepted.
Amendment 275 #
Proposal for a regulation
Article 10 – paragraph 6
Article 10 – paragraph 6
6. Where ESMA has well-founded reasons to consider that the conditions laid down in paragraph 1this Article are no longer fulfilled, it shall have the power to require the endorsing ESG ratings and ESG data products provider(s) to cease the endorsement. This is without prejudice to the sanctions applicable to the authorised ESG rating and ESG data products in accordance with Articles 33 to 35.
Amendment 278 #
Proposal for a regulation
Article 11 – title
Article 11 – title
Recognition of third country ESG rating providerss and ESG data products providers (Amendment applies throughout article 11: ESG ratings and ESG data products providers.)
Amendment 279 #
Proposal for a regulation
Article 11 – paragraph 1
Article 11 – paragraph 1
1. Until the Commission has adopted an equivalence decision as referred to in Article 9 or, where adopted, in the event that the equivalence decision is repealed, third country ESG rating providers with ans and ESG data products provider(s) belonging to a group in accordance with Article 2(11) of Directive 2013/34/EU with a consolidated annual net turnover on their ESG rating activities below EUR 12 million for three consecutive years may provide ESG ratings and ESG data products to regulated financial undertakings in the Union, provided that ESMA has recognised that third country ESG ratings and ESG data products provider(s) in accordance with this paragraphs XX and YYArticle.
Amendment 283 #
Proposal for a regulation
Article 11 – paragraph 2 – subparagraph 1
Article 11 – paragraph 2 – subparagraph 1
Third country ESG ratings and ESG data products providers(s) that wish to be recognised as referred to in paragraph 1 shall comply with the requirements established in this Regulation and apply for recognition to ESMA. ESG rating providers may fulfilBy XXX, ESMA shall adopt regulatory technical standards to further specify the implementation of thate condition bys listed in paragraph 2, including whether ESG rating providers applying the IOSCO recommendations on ESG ratings provided that such applicationand ESG data products is equivalent to compliance with the requirements established in this Rregulation.
Amendment 287 #
Proposal for a regulation
Article 13 – title
Article 13 – title
Register of ESG ratings and ESG data products providers and accessibility of information on the European Single Access Point (ESAP) (Amendment applies throughout article 13: ESG ratings and ESG data products providers.)
Amendment 289 #
Proposal for a regulation
Article 14 – paragraph 1
Article 14 – paragraph 1
1. ESG ratings and ESG data products providers shall ensure the independence of their rating activities, including from all political and economic influences or constraints. (Amendment applies throughout article 14: ESG ratings and ESG data products providers.)
Amendment 344 #
Proposal for a regulation
Article 16 a (new)
Article 16 a (new)
Amendment 346 #
Proposal for a regulation
Article 17 – paragraph 1
Article 17 – paragraph 1
1. ESG ratings and ESG data products providers shall record their ESG rating activities. Those records shall contain the information listed in Annex II. (Amendment applies throughout article 17: ESG ratings and ESG data products providers.)
Amendment 354 #
Proposal for a regulation
Article 18 – paragraph 2 – point a – point 5 a (new)
Article 18 – paragraph 2 – point a – point 5 a (new)
(5a) the quality of ESG data distributed to regulated financial undertakings in the EU;
Amendment 355 #
Proposal for a regulation
Article 18 – paragraph 2 – point a – point 5 b (new)
Article 18 – paragraph 2 – point a – point 5 b (new)
(5b) the methodology and sources of data used for a specific controversy report;
Amendment 356 #
Proposal for a regulation
Article 18 – paragraph 2 – point b
Article 18 – paragraph 2 – point b
(b) complaints are investigated in a timely and fair manner and that the outcome of the investigation is communicated to the complainant within a reasonable period of timeone month, unless such communication would be contrary to objectives of public policy or to Regulation (EU) No 596/2014 of the European Parliament and of the Council53 ; _________________ 53 Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ L 173, 12.6.2014, p. 1).
Amendment 358 #
Proposal for a regulation
Article 18 – paragraph 2 a (new)
Article 18 – paragraph 2 a (new)
2 a. By XXXX, the ESMA shall establish and operate a complaint mechanism for receiving, investigating and retaining records concerning complaints against ESG ratings or ESG data product providers made regarding ESG ratings or ESG data.
Amendment 359 #
Proposal for a regulation
Article 18 – paragraph 2 b (new)
Article 18 – paragraph 2 b (new)
Amendment 360 #
Proposal for a regulation
Article 18 – paragraph 2 c (new)
Article 18 – paragraph 2 c (new)
2 c. ESMA shall investigate complaints in a timely and fair manner and communicate the outcome of the investigation to the complainant within a reasonable period of time, unless such communication would be contrary to objectives of public policy or to Regulation (EU) No 596/2014 of the European Parliament and of the Council.
Amendment 361 #
Proposal for a regulation
Article 19 – paragraph 1
Article 19 – paragraph 1
1. ESG ratings and ESG data products providers shall not outsource important operational functions where such outsourcing would materially impair the quality of the ESG ratings and ESG data products provider’s internal control policies and procedures, or the ability of the European Supervisory and Markets Authority (ESMA) to supervise the ESG ratings and ESG data products provider’s compliance with its obligations under this Regulation. (Amendment applies throughout article 19: ESG ratings and ESG data products providers.)
Amendment 364 #
Proposal for a regulation
Article 20 – paragraph 1 – introductory part
Article 20 – paragraph 1 – introductory part
1. ESMA may exempt an ESG ratings and ESG data products provider(s) at its request from complying with some of the requirements laid down in Article 14 where that ESG ratings and ESG data products provider(s) is able to demonstrate that those requirements are not proportionate in view of the nature, scale and complexity of its business and the nature and range of the issuance of ESG ratings and provided that:ESG data products and provided that: (Amendment applies throughout article 20: ESG ratings and ESG data products providers.)
Amendment 371 #
Proposal for a regulation
Article 21 – title
Article 21 – title
Disclosure of the methodologies, models, and key rating assumptions and treatment of controversies used in ESG rating activities to the public
Amendment 378 #
Proposal for a regulation
Article 21 – paragraph 1 a (new)
Article 21 – paragraph 1 a (new)
Amendment 385 #
Proposal for a regulation
Article 22 – title
Article 22 – title
Disclosures to usubscribers of ESG ratings and rated entitiesESG data products and to rated entities (Amendment applies throughout article 22: ESG ratings and ESG data products providers. Also Alignment with annex III.)
Amendment 392 #
Proposal for a regulation
Article 23 – paragraph 1
Article 23 – paragraph 1
1. ESG ratings and ESG data products providers shall have in place robust governance arrangements, including a clear organisational structure with well- defined, transparent, and consistent roles and responsibilities for all persons involved in the provision of an ESG rating. and ESG data product(s). (Amendment applies throughout article 23: ESG ratings and ESG data products providers.)
Amendment 402 #
Proposal for a regulation
Article 24 – paragraph 1 – introductory part
Article 24 – paragraph 1 – introductory part
1. ESG ratings and ESG data products providers shall ensure that their employees and any other natural persons whose services are placed at their disposal or under their control and who are directly involved in the provision of an ESG rating: and ESG data product(s): (Amendment applies throughout article 24: ESG ratings and ESG data products providers.)
Amendment 407 #
Proposal for a regulation
Article 25 – paragraph 1
Article 25 – paragraph 1
1. ESG ratings and ESG data product providers shall take steps that are adequate to ensure that: (a) fees charged to clients are fair, reasonable, transparent, non-discriminatory and are based on costs.; (b) other commercial contractual terms are fair, reasonable, transparent and non- discriminatory. (Amendment applies throughout article 25: ESG ratings and ESG data products providers.)
Amendment 411 #
Proposal for a regulation
Article 25 – paragraph 2
Article 25 – paragraph 2
2. For the purposes of paragraph 1, ESG rating and ESG data providers shall provide ESMA with their fee grid and pricing policy, including fee structure and pricing criteria in relation to ESG data, on an annual basis. ESMA may also require ESG rating providers to provide it with additional documented evidence, if deemed necessary. ESMA may take supervisory measures in accordance with Article 33, and may decide to impose fines in accordance with Article 34 where it finds that fees from ESG rating providers are not fair, reasonable, transparent, non- discriminatory and not based on actual costs. (Inspired by CRA regulation.)
Amendment 414 #
Proposal for a regulation
Article 25 – paragraph 2 a (new)
Article 25 – paragraph 2 a (new)
2a. Rated undertakings shall be allowed to communicate freely and at no extra cost on their ESG rating, also in relation to the ESG rating of their peer group.
Amendment 416 #
Proposal for a regulation
Article 26 – paragraph 1
Article 26 – paragraph 1
In carrying out their duties under this Regulation, ESMA, the Commission or any public authorities of a Member State shall not interfere with the content of ESG ratings, ESG data products, or methodologies.
Amendment 419 #
Proposal for a regulation
Article 27 – paragraph 3 – subparagraph 1
Article 27 – paragraph 3 – subparagraph 1
ESMA shall publish an annual report on the application of this Regulation, including on supervisory measures taken and penalties imposed by ESMA under this Regulation, including fines and periodic penalty payments. That report shall contain, in particular, information on the evolution of ESG Ratings and ESG data products market and an assessment of the application of the third country regimes referred to in Articles 9, 10 and 11.
Amendment 420 #
Proposal for a regulation
Article 30 – paragraph 1
Article 30 – paragraph 1
1. ESMA may by simple request or by decision require ESG ratings and ESG data products providers, persons involved in ESG rating and ESG data product activities, rated entities, third parties to whom the ESG ratings and ESG data product providers have outsourced operational functions or activities, and persons otherwise closely and substantially related or connected to ESG ratings and ESG data products providers or ESG rating and ESG data product activities, to provide all information that it needs to carry out its duties under this Regulation.
Amendment 429 #
Proposal for a regulation
Article 33 – paragraph 1 – introductory part
Article 33 – paragraph 1 – introductory part
1. Where ESMA’ finds that a ESG ratings and ESG data products provider has not complied with its obligations under this Regulation, it shall take one or more of the following supervisory measures:
Amendment 436 #
Proposal for a regulation
Article 34 – paragraph 1
Article 34 – paragraph 1
1. Where ESMA finds that an ESG ratings and ESG data products provider, or, where applicable, its legal representative, has, intentionally or negligently, infringed this Regulation, it shall adopt a decision imposing a fine. The maximum amount of the fine shall be 10 % of the total annual net turnover of the ESG ratings and ESG data products provider, calculated on the basis of the most recent available financial statements approved by the management body of the ESG rating provider.s and ESG data products provider. (Amendment applies throughout article 34: ESG ratings and ESG data products providers.)
Amendment 441 #
Proposal for a regulation
Article 35 – paragraph 1 – point a
Article 35 – paragraph 1 – point a
(a) an ESG ratings and ESG data products provider to put an end to an infringement in accordance with a decision taken pursuant to Article 33; (Amendment applies throughout article 35: ESG ratings and ESG data products providers.)
Amendment 446 #
Proposal for a regulation
Article 40 – paragraph 1
Article 40 – paragraph 1
1. ESMA shall charge fees to the ESG ratings and ESG data products providers in accordance with the delegated act adopted pursuant to paragraph 2. Those fees shall fully cover ESMA’s necessary expenditure relating to the supervision of ESG rating providers and the reimbursement of any costs that the competent authorities may incur carrying out work pursuant to this Regulation, and in particular as a result of any delegation of tasks in accordance with Article 41. (Amendment applies throughout article 40: ESG ratings and ESG data products providers.)
Amendment 452 #
Proposal for a regulation
Article 43 – paragraph 1
Article 43 – paragraph 1
1. A competent authority of a Member State that finds that acts infringing this Regulation are being, or have been, carried out on the territory of its own or of another Member State shall inform ESMA thereof. A competent authority that considers it appropriate for investigatory purposes may suggest to ESMA that it assesses the need to use the powers under Article 30 in relation to the ESG ratings and ESG data products provider involved in those acts. (Amendment applies throughout article 43: ESG ratings and ESG data products providers.)
Amendment 456 #
Proposal for a regulation
Article 48 – paragraph 1
Article 48 – paragraph 1
1. ESG ratings and ESG data product providers which provided their services at the date of entry into force of this Regulation shall notify ESMA within 3 months if they want to continue offering their services and apply for authorisation in accordance with Article 5. In that case, they shall apply for authorisation within 6 months after the date of application of this Regulation. (Amendment applies throughout article 48: ESG ratings and ESG data products providers.)
Amendment 470 #
Proposal for a regulation
Annex I – paragraph 1 – point g
Annex I – paragraph 1 – point g
(g) a description of the procedures and methodologies used to issue and review ESG ratings and ESG data products implemented by the applicant; (Amendment applies throughout Annex 1: ESG ratings and ESG data products providers.)
Amendment 477 #
Proposal for a regulation
Annex II – Part 1 – paragraph 1 – point d
Annex II – Part 1 – paragraph 1 – point d
(d) the account records for each subscriber to the ESG ratings; and ESG data products; (Amendment applies throughout Annex II ) paragraph 1 (d)-(j) and paragraph 2: ESG ratings and ESG data products providers.)
Amendment 478 #
Proposal for a regulation
Annex III – Part 1 – paragraph 1 – introductory part
Annex III – Part 1 – paragraph 1 – introductory part
In accordance with Article 21 of the Regulation, ESG ratings and data product providers shall, at the minimum, disclose to the public on their website and through the European Single Access Point (ESAP) the following:
Amendment 480 #
Proposal for a regulation
Annex III – Part 1 – paragraph 1 – point a
Annex III – Part 1 – paragraph 1 – point a
(a) high level overview of the rating methodologies used (and changes thereto), including: (i) whether analysis is backward- looking or forward-looking; (ii) the industry classification used and why such classification is relevant;
Amendment 484 #
Proposal for a regulation
Annex III – Part 1 – paragraph 1 – point b
Annex III – Part 1 – paragraph 1 – point b
(b) high level overview of data processes for establishing ESG ratings (data sources, including if they are public or non–public, and if they are sourced from sustainability statements required by Directive (EU) 2022/2464, estimation of input data in case of unavailability, frequency of data updates);
Amendment 485 #
Proposal for a regulation
Annex III – Part 1 – paragraph 1 – point b a (new)
Annex III – Part 1 – paragraph 1 – point b a (new)
(ba) high level overview of the ESG data product processes (sources, frequency of update) and of methodologies used (and changes thereto) for processed data (including estimated data);
Amendment 490 #
Proposal for a regulation
Annex III – Part 1 – paragraph 1 – point d
Annex III – Part 1 – paragraph 1 – point d
(d) information on the ratings’ objective, clearly marking whether the rating is assessing risks, impacts or some otherboth ("double materiality principle") and any specific dimensions;
Amendment 491 #
Proposal for a regulation
Annex III – Part 1 – paragraph 1 – point f
Annex III – Part 1 – paragraph 1 – point f
(f) in the case of an aggregated ESG rating, weighting of each the three overarching ESE, S and G factors categories (e.g., 33% Environment, 33% Social, 33% Governance) broken down by relevant criteria (e.g. sector, geographic area), and the explanation of the weighting method and criteria used, including weight per individual E, S and G factors;
Amendment 492 #
Proposal for a regulation
Annex III – Part 1 – paragraph 1 – point f
Annex III – Part 1 – paragraph 1 – point f
(f) in the case of an aggregated ESG rating, the rating given to the individual E, S and G factors, the weighting of the three overarching ESG factors categories (e.g., 33% Environment, 33% Social, 33% Governance), and the explanation of the weighting method, including weight per individual E, S and G factors;
Amendment 494 #
Proposal for a regulation
Annex III – Part 1 – paragraph 1 – point i
Annex III – Part 1 – paragraph 1 – point i
(i) Where applicable, reference to the use of Artificial Intelligence (AI) in the data collection or rating/scoring process, with the reference comprising information such as the degree of support, data and places of use;
Amendment 497 #
Proposal for a regulation
Annex III – Part 1 – paragraph 1 – point j
Annex III – Part 1 – paragraph 1 – point j
(j) generalits pricing policy in relation to ESG ratings and ESG data products, including the fee structure and information on criteria used for establishing fees to clients, specifying the various elements taken into consideration, such as the involvement of data analysts, IT equipment, purchasing data, as well as information on revenue divided into fees from ESG rating, ESG data provision and other ancilliary services with a comprehensive description of each;
Amendment 498 #
Proposal for a regulation
Annex III – Part 1 – paragraph 1 – point k
Annex III – Part 1 – paragraph 1 – point k
(k) any limitation in data sources used for the construction of ESG ratings and for processed data of ESG data products.
Amendment 500 #
Proposal for a regulation
Annex III – Part 2 – paragraph 1 – introductory part
Annex III – Part 2 – paragraph 1 – introductory part
In addition to the elements referred to in Article 22 of the Regulation, ESG ratingand in addition to the minimum disclosures referred to in the first parapraph of this annex, ESG ratings and data products providers shall make available the following information to European regulated financial undertakings and to undertakings in the scope of Directive 2013/34/EU that are subject of suchan ESG rating:
Amendment 501 #
Proposal for a regulation
Annex III – Part 2 – paragraph 1 – point a – introductory part
Annex III – Part 2 – paragraph 1 – point a – introductory part
(a) a more granular overview of the rating methodologies used (and changes thereto) per E, S and G factor and in aggregate, including:
Amendment 503 #
Proposal for a regulation
Annex III – Part 2 – paragraph 1 – point a – point 2 a (new)
Annex III – Part 2 – paragraph 1 – point a – point 2 a (new)
(2a) whether the analysis looks at potential material financial risk to the rated entity, or potential material impact of the rated entity on the environment and society in general, or both, the weighting of the two factors, and the explanation of the weighting method, including weight per factor;
Amendment 504 #
Proposal for a regulation
Annex III – Part 2 – paragraph 1 – point a – point 2 a (new)
Annex III – Part 2 – paragraph 1 – point a – point 2 a (new)
(2a) the industry classification used for the rated undertaking and why this classification is relevant,
Amendment 508 #
Proposal for a regulation
Annex III – Part 2 – paragraph 1 – point a a (new)
Annex III – Part 2 – paragraph 1 – point a a (new)
(a a) a more granular overview for users of ESG data products of the methodology, models and key assumptions used to determine the processed data (including estimated data, proxies, sectoral data). The methodology shall be described for each relevant type of processed data;
Amendment 509 #
Proposal for a regulation
Annex III – Part 2 – paragraph 1 – point b – introductory part
Annex III – Part 2 – paragraph 1 – point b – introductory part
(b) a more granular overview of data processes, for establishing ESG ratings or for delivering ESG processed data for users of ESG data products, including:
Amendment 510 #
Proposal for a regulation
Annex III – Part 2 – paragraph 1 – point b – point 1
Annex III – Part 2 – paragraph 1 – point b – point 1
(1) more detailed explanation of data sources used – including whether public or non-public, mentioning whether derived from the sustainability reporting standards developed pursuant to Article 29b of Directive 2013/34/EU /Taxonomy/SFDR], or from another norm of reporting,
Amendment 511 #
Proposal for a regulation
Annex III – Part 2 – paragraph 1 – point b – point 2
Annex III – Part 2 – paragraph 1 – point b – point 2
(2) where applicable the use of estimation and, proxies or industry average and explanation of the underlying methodology,
Amendment 512 #
Proposal for a regulation
Annex III – Part 2 – paragraph 1 – point b – point 3
Annex III – Part 2 – paragraph 1 – point b – point 3
(3) the policies for updating raw and estimated data and revising historical data, date of last updates of data,
Amendment 513 #
Proposal for a regulation
Annex III – Part 2 – paragraph 1 – point b – point 4
Annex III – Part 2 – paragraph 1 – point b – point 4
(4) data quality controls, including the frequency thereof, and data governance, including the remediation process,
Amendment 514 #
Proposal for a regulation
Annex III – Part 2 – paragraph 1 – point b a (new)
Annex III – Part 2 – paragraph 1 – point b a (new)
(b a) for users of ESG raw data products, a more granular overview of the raw data process including: - the data collection process, whether the information publicly available or not, - the update process, - the control and remediation process, - how “non material” information (as per the reporting entity) are considered;
Amendment 515 #
(c) where applicable, information about the engagement with rated entitieof ESG rating providers with rated entities, including the following; - The name, contact number and email of the analyst who shall be the consistent contact point with whom the rated entity can interact to address any queries relating to the ESG rating process; - the period during which questionnaires, if any, are being sent out; - the procedure allowing the rated entity to correct errors; - the description of the timing and precise terms of the rating process;
Amendment 517 #
Proposal for a regulation
Annex III – Part 2 – paragraph 1 – point d
Annex III – Part 2 – paragraph 1 – point d
(d) where applicable, an explanation of any AI methodology used in theESG data collection or rating processproducts or ESG rating process, including the type of technology as well as its date and place of use;
Amendment 518 #
Proposal for a regulation
Annex III – Part 2 a (new)
Annex III – Part 2 a (new)
2a Periodic disclosures to ESMA An ESG rating provider and an ESG data product provider shall provide annually, by 31 March, to ESMA the following information: (a) List of fees charged to each client to access ESG ratings and scores for subscriber-pay model or fees charged to entities for individual ESG rating or score in an issuer-pay model; (b) Its pricing policy, including the fees structure and pricing criteria in relation to ESG ratings and scores.