ESG Ratings: New Separation Obligations for Rating Agencies in 2026

Key data

If your company contracts ESG ratings to access green financing, issue sustainable bonds or meet institutional investor requirements, this regulation directly affects you: the ratings you receive will be subject to stricter controls over their independence. And if you are an ESG rating provider in the EU, you have new structural obligations to comply with.

The Delegated Regulation (EU) 2026/872, published on 28 July 2026, develops the technical regulatory standards provided for in Regulation (EU) 2024/3005 and imposes concrete measures to eliminate conflicts of interest that may arise when the same entity rates a company's sustainability and, at the same time, provides it with consulting or audit services.

What does this regulation establish?

The regulation establishes three major blocks of obligations for ESG rating providers:

This regulation completes the regulatory framework initiated with Regulation (EU) 2024/3005, which established the general supervision regime for ESG rating providers in the European Union. The 2026 delegated regulation provides the specific technical specifications that those providers must apply in their daily operations.

The objective is clear: to prevent an agency that charges for advising a company on sustainability matters from also being the one that rates it. This dual role creates a structural conflict of interest that can compromise the objectivity of the rating and, therefore, mislead investors, financiers and regulators.

Economic and operational impact

For ESG rating providers, the impact is direct and significant:

• Need to reorganize internal structures to ensure the required functional separation.
• Investment in systems to control information flows between divisions.
• Review and update of corporate governance policies and conflict of interest management.
• Possible need to segregate or divest from business lines incompatible with rating activity.
• Risk of loss of authorization to operate in the European market in case of non-compliance.

For companies that contract ESG ratings (for sustainable financing, green bond issuance, compliance with investor ESG requirements), the impact is indirect but relevant:

• The ratings received will have greater credibility and reliability with investors and financiers.
• Consolidation of the ESG provider market may occur, with exit of players unable to assume separation costs.
• Companies must verify that their ESG rating providers comply with the new regulatory framework, especially if the rating is used to access financing or for sustainability reports.

Who does it affect?

• ESG rating providers authorized or in the process of authorization in the EU that also provide consulting, audit or other financial services to the entities they rate.
• Large consulting firms and audit firms with integrated ESG rating divisions.
• Listed companies and sustainable debt issuers that contract ESG ratings to access green financing or meet institutional investor requirements.
• CFOs and sustainability directors responsible for managing relationships with ESG rating providers.
• Institutional investors and fund managers that use ESG ratings in their investment and due diligence processes.
• Legal and compliance advisors that accompany ESG providers in their regulatory adaptation.

Practical example

Imagine a European consulting firm that offers two services to large companies: on one hand, it advises them on improving their sustainability policies (emissions reduction, corporate governance, diversity); on the other hand, it issues ESG ratings on those same companies that investors use to make investment decisions.

Under Delegated Regulation (EU) 2026/872, this consulting firm has a structural problem: the same entity that charges for improving a company's sustainability is the one that later rates it. That is exactly the conflict of interest that the regulation wants to eliminate.

To comply, the consulting firm will have to choose between several options: create a legally separate subsidiary for the rating activity, establish strict information barriers between consulting and rating teams, or directly divest from one of the two business lines. If it does not, it is exposed to regulatory sanctions and loss of authorization to issue ESG ratings in the European market.

What should companies do now?

1. Identify if you are an ESG rating provider in the EU: If your entity issues ESG ratings and also provides other services to the rated companies, you are directly affected by this regulation.
2. Audit your business lines: Map what activities you combine with ESG rating (consulting, audit, financial services) and assess whether there is a conflict of interest under the regulation's criteria.
3. Design the separation structure: Define whether separation will be done through internal information barriers, creation of separate legal entities or divestment from incompatible lines.
4. Update corporate governance policies: Implement independence policies and structural safeguards that document and guarantee the objectivity of the rating process.
5. If you contract ESG ratings: Verify that your provider complies with the new regulatory framework. A rating issued by an unauthorized or non-compliant provider may undermine the credibility of your sustainable financing or ESG reports.
6. Consult with specialized legal advisor: Technical regulatory standards have complex structural and legal implications. Involve your legal team or an external advisor specialized in financial regulation and sustainability.

Official source

Consult the complete regulation at official source

Disclaimer: This article is for informational purposes only and does not constitute legal advice. For specific decisions, consult a qualified professional. Source: https://eur-lex.europa.eu/./legal-content/AUTO/?uri=OJ:L_202600872