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The European Securities and Markets Authority (ESMA) has released draft Regulatory Technical Standards (RTS) under the 2024 ESG Rating Regulation, introducing strict requirements for ESG ratings providers in the EU. These include authorization, transparent disclosure of methodologies, and robust conflict-of-interest safeguards, with operational separation required for firms offering advisory services. A public consultation is open until June 20, 2025, with final rules expected by October 2025. Additionally, ESMA’s new Guidelines on Enforcement of Sustainability Information strengthen oversight of sustainability reporting, aligning it with financial standards. The risk-based approach targets greenwashing and double materiality, with coordinated EU-wide enforcement. Companies face increased scrutiny, requiring enhanced governance and compliance to meet these rigorous ESG data and reporting standards.

The EU Parliament has approved delays to key sustainability reporting laws, cutting compliance burdens for companies. New ESG rules will take effect from 2027, with a 2026 opt-in option.

The EU Council has approved delays to the CSRD and CSDDD sustainability reporting rules, reducing compliance burdens for companies. Scope cuts will remove 80% of firms from CSRD obligations.