ESG Ratings Regulation: Application from 2 July 2026 – Key Considerations for Asset Managers
Monday, 29 June 2026
The EU ESG Ratings Regulation (Regulation (EU) 2024/3005 ) (the “Regulation”) will apply from 2 July 2026, introducing a harmonised regulatory framework for providers of ESG ratings. While the Regulation is primarily directed at ESG rating providers, it also has practical implications for asset managers, with Ireland domiciled investment funds, that use ESG ratings or communicate ESG related assessments to investors.
For most AIFMs and UCITS management companies in Ireland, the Regulation will not require authorisation or fundamentally change existing investment processes. Nevertheless, as the application date approaches, firms should consider whether their current governance, disclosures and marketing materials adequately reflect the new legal landscape.
Who is affected?
The Regulation principally applies to firms whose business is the provision of ESG ratings. However, asset managers should consider whether any proprietary ESG scores, rankings or ratings that they publish externally could fall within the scope of the Regulation.
In addition, firms that rely on third-party ESG ratings as part of their investment process or in fund marketing should understand how those ratings are sourced and used.
Practical considerations
As part of their implementation review, asset managers may wish to consider whether they have:
- identified where ESG ratings are used within investment processes, product governance and investor communications;
- reviewed marketing materials, websites and fund documentation for references to proprietary or third-party ESG ratings;
- assessed whether any internally developed ESG scoring methodologies are used solely for internal investment purposes or are communicated externally;
- confirmed appropriate oversight of third-party ESG rating providers; and
- considered whether any updates to governance or compliance procedures are appropriate in light of the new regime.
For many firms, these exercises will complement existing governance frameworks established under SFDR and other sustainable finance legislation
Looking ahead
Although the Regulation is primarily intended to enhance the transparency, quality and integrity of the ESG ratings market, it also provides asset managers with an opportunity to review how ESG assessments are used and communicated across their organisations.
As supervisory expectations around sustainable finance continue to evolve, ensuring consistency between investment processes, disclosures and marketing materials remains an important aspect of good governance.
If you would like to discuss how the Regulation may affect your business, or would like assistance reviewing your existing ESG governance or marketing materials ahead of the application date, please contact David Naughton,Doireann O’Daly, Brónach Rafferty or your usual contact within our Investment Funds and Financial Services Regulation Department.
