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Asset Managers support call for regulation of ESG data, research and ratings

Competitiveness | Data | Sustainable Finance | EU Taxonomy | Sustainability-related Disclosures (SFDR) | Sustainability reporting (NFRD)
18 December 2020 | Press Release
Sustainable Finance
EU Taxonomy
Sustainability-related Disclosures (SFDR)
Sustainability reporting (NFRD)
wind turbines and flowers

EFAMA, the voice of the European investment management industry, joins the French and Dutch financial market authorities call for a European regulation of ESG data, research and ratings.


European asset managers are observing a double-digit growth in the demand for ESG investments, and clients are increasingly sophisticated in their preferences*.


Giorgio Botta, EFAMA Regulatory Policy Advisor, commented: "Asset managers wish to encourage this ESG investment trend by expanding their offering of sustainable products and by providing investors with trustworthy and comparable information - also in response to EU regulation introduced to fight greenwashing and enhance transparency. To fulfil these objectives, investors need solid and reliable data. Given the lack of publicly available information, asset managers are heavily reliant on the information from third-party providers of ESG data, research and ratings, which comes with high costs and many questions."


  • Market concentration and costs: EFAMA members observe an increasing concentration in the market for ESG information, partly driven by merger activity, and rising ESG data costs. This spike in the cost of ESG data is particularly detrimental to smaller firms which have less resources and bargaining power, and to end-investors who ultimately foot the bill.
  • Comparability and reliability: third-party ESG data and research are often inconsistent, and ratings may vary considerably among providers. This limits the reliability, comparability and usefulness of the information provided and expose investors to the risk of greenwashing.
  • Transparency on methodologies: The methodologies used by third-party providers to gather and process data lack transparency. More transparency would enable asset managers to ascertain that the information provided can be safely relied on in the context of their investment and product development strategies.
  • Potential conflicts of interest: the offering of a broad range of products and services by third-party providers, combined with high market concentration, raises conflict of interest concerns. To preserve market integrity, rules aimed at identifying and managing potential conflicts of interest are needed.
  • Dialogue with rated companies: to improve the quality of research and ratings, and avoid factually incorrect analyses and misleading or incorrect conclusions, third-party providers should step up their dialogue with rated companies. This would help them produce research and ratings that better capture the context in which companies operate.
As indicated in EFAMAs response to the European Commissions consultation on the renewed sustainable finance strategy**, it is important to improve the functioning of the ESG data, research and ratings market. The renewed strategy provides an excellent opportunity to address the industry's concerns related to the transparency on methodologies and the management of conflicts of interest. EFAMA therefore recommends the European Commission to develop a European regulatory framework for providers of ESG data, research and ratings, in line with the recent joint call from the AFM and AMF.

For media enquiries, please contact:

Hume Brophy
Kerri Anne Rice at
Paul Andrieu at

Daniela Haiduc at

Notes to editors:

The AFM/AMF position:
RE: 20201126 - Draft non-paper AMF AFM version 26 novembre (TC AFM).docx (

About the European Fund and Asset Management Association (EFAMA):
EFAMA, the voice of the European investment management industry, represents 28 Member Associations, 60 Corporate Members and 24 Associate Members. At end Q3 2020, total net assets of European investment funds reached EUR 17.6 trillion. These assets were managed by more than 34,200 UCITS (Undertakings for Collective Investments in Transferable Securities) and almost 29,400 AIFs (Alternative Investment Funds). At the end of Q2 2020, assets managed by European asset managers as investment funds and discretionary mandates amounted to an estimated EUR 24.9 trillion. More information is available at
Follow EFAMA on Twitter @EFAMANews or LinkedIn @EFAMA for latest updates.


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