ESG Ratings in Europe: new transparency rules affecting investors and listed companies

Key data

If your company is being evaluated by an ESG agency, or if you manage an ESG fund that uses these ratings to make investment decisions, Delegated Regulation (EU) 2026/871 changes the rules of the game. Published on 28 July 2026, this regulation develops the technical standards of Regulation (EU) 2024/3005 and converts into a concrete obligation what until now was an aspiration: that agencies explain exactly how they calculate their sustainability scores.

The market for ESG ratings has grown exponentially in Europe, but until now has operated with little transparency. Two agencies could give radically different scores to the same company without anyone knowing why. That ends with this regulation.

What does this regulation establish?

The regulation specifies with precision what information ESG rating agencies must publicly disclose. This is not a statement of principles: these are technical regulatory standards with concrete and enforceable content. The four mandatory disclosure blocks are:

• Methodology: agencies must publish how they build their ratings, what models they apply and what weightings they use.
• Evaluation criteria: the environmental, social and governance factors that are taken into account, and how they are measured.
• Rated elements: what specific aspects of a company or issuer are being evaluated in each rating.
• Data on analyzed issuers: information about the entities that are the subject of the rating.

This regulation develops Regulation (EU) 2024/3005, which established the general framework for the regulation of ESG agencies in the EU. The 2026 delegated regulation specifies what is meant by "sufficient disclosure" and what technical standards must be met.

Economic and operational impact

The impact of this regulation is distributed differently depending on the type of organization:

For listed companies, the most relevant change is strategic: until now, they received a score without knowing exactly what determined it. With mandatory disclosure of methodology and criteria, they will be able to identify what levers to improve to optimize their rating and, therefore, their access to sustainable financing on better terms.

For institutional investors, comparability between agencies reduces the risk of making decisions based on inconsistent or poorly founded ratings. This has a direct impact on the construction of ESG portfolios and on compliance with their own reporting obligations.

The regulation also acts as a tool to combat greenwashing in ratings: if an agency assigns high scores without transparent and verifiable criteria, it is exposed to regulatory consequences.

Who does it affect?

• ESG rating agencies operating in the European Union: they are the main parties obligated by the regulation and must adapt their disclosure systems.
• Institutional investors (pension funds, insurers, asset managers) that use ESG ratings for their investment decisions.
• ESG funds that incorporate third-party ratings in their asset selection process.
• Listed companies that are subject to ESG rating, especially those with sustainable financing needs (green bonds, sustainability-linked loans).
• CFOs and sustainability directors of large companies that manage relationships with ESG rating agencies.
• Financial advisors and sustainability consultants who work with clients on green financing strategies.

Practical example

Imagine an industrial company listed on the Spanish stock exchange that has been receiving a medium-low ESG rating from a European agency for three years. Until now, the sustainability team knew the score was low, but could not precisely identify whether the problem was in environmental criteria, governance or social indicators, nor what weighting each block had.

With Delegated Regulation (EU) 2026/871 in force, the agency is required to publish its complete methodology and evaluation criteria applied. The CFO and sustainability director can now review exactly what elements have been rated, what company data has been used and how the final score has been built.

Practical result: the company can prioritize improvements that have the greatest impact on its rating, improve its access to sustainable financing and compare whether other agencies apply different criteria that better reflect its actual sustainability profile.

What should companies do now?

1. Identify what ESG agencies rate your company and verify if they are subject to Regulation (EU) 2024/3005. Agencies operating in the EU are directly obligated.
2. Request or consult the methodology published by each agency that evaluates you, once disclosure becomes mandatory. Compare the criteria applied with your actual sustainability profile.
3. Review your ESG reporting strategy in light of the criteria and rated elements that agencies will be required to publish. Align your sustainability reports with what agencies actually measure.
4. If you are an institutional investor or ESG fund manager, update your due diligence processes to take advantage of greater comparability between rating providers.
5. If you are an ESG rating agency, begin adapting your public disclosure systems now to comply with the technical standards established in this regulation and avoid regulatory consequences.
6. Consult with specialists in sustainable finance to assess the specific impact on your green financing strategy or your reporting obligations as an investor.

Official source

Consult complete regulation in 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_202600871