ICMA Releases Voluntary Code of Conduct for ESG Ratings and Data Products Providers

On December 14, 2023, the International Capital Market Association (ICMA) published a new, globally consistent, voluntary Code of Conduct for ESG ratings and data products providers. The code incorporates recommendations from the International Organization of Securities Commissions (IOSCO) to ensure its 'international interoperability' and applicability in jurisdictions lacking local codes or regulations. The Code is structured around the following six principles: Good Governance; Securing Quality (Systems and Controls); Conflicts of Interest; Transparency; Confidentiality (Systems and Controls); and Engagement (Systems and Controls).

Under the first principle, the ESG ratings and data products providers are expected to “ensure appropriate governance arrangements are in place that enable them to promote and uphold the Principles and overall objectives of the Code”.