The Financial Conduct Authority (FCA), the UK’s conduct regulator for financial services firms and financial markets, announced an invitation to ESG rating providers to pilot a new proposed reporting regime for ESG ratings.

The new pilot project follows the release by the FCA in December of new proposed requirements for ESG ratings providers, launched after the finalization of new legislation in October by the UK government to regulate ESG ratings providers, under the supervision of the FCA. The law applies to UK-based providers, as well as foreign providers offering ESG ratings in the UK.

One of the key areas of the FCA’s proposed requirements was on transparency, with the proposals including a series of minimum public disclosure requirements for ESG ratings providers, including reporting on their product’s objectives, whether it assesses ESG risks, impacts or other dimensions, which factors are assessed across a wide range of E, S, and G areas, the meaning of the rating scale and categories, whether ratings are given as absolute values or relative to a peer group, and how the coverage universe of the product is decided.

In its new invitation to ESG rating providers, the FCA said that the aim of the pilot is to avoid unnecessary reporting burden for firms over time, with the initiative seeking to assess whether the proposed metrics for reporting are clear, feasible, proportionate across different business models, and useful for supervisory purposes.

The FCA added that the pilot will enable participants to help inform the design of the future reporting framework and regulatory reporting requirements, noting that it may revise the metrics for the eventual reporting regime based on the feedback.

The FCA previously said that it plans to finalize its rules for ESG ratings providers in Q4 2026, and for the new requirements to come into effect from June 2028.