ESG ratings and reporting
Having the right ESG rating and providing the right ESG data will be top of the corporate agenda to remain relevant in a world where businesses are increasingly supply-chain-conscious and aware of the impact the supply chain has on your own ESG footprint. We also expect to see ratings being a factor in more and more investment decisions. Businesses will need to comply with more widespread ESG data disclosure requirements, such as those imposed by the EU Taxonomy and the UK’s FCA. Third party ESG ratings agencies will boom, although the inherent conflicts in many of these ratings agencies’ models (sometimes supplying both ratings and improvement advice) will make for a bumpy ride and international regulation will begin to catch up. But not all businesses will be happy with their third-party ESG ratings (sometimes justifiably) and will want to engage and dispute ratings. Investors and other firms using this data will need to consider just how much weight they place on something which can seem as much art as science.
ESG
"Businesses will need to comply with more widespread ESG data disclosure requirements, such as those imposed by the EU Taxonomy and the UK’s FCA."
– Lucian Firth, Partner, London
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