The ESG Rating Agencies, or Corporate Sustainability Systems as they have also been labelled as to convey the differing elements of the industry, are becoming ever more important in theory. This is because, as Refinitiv found recently, 98% of global institutional investors are now actively considering ESG in their investment decisions. However, there are massive issues within the industry and its multitude of models, which has now led the Autoriteit Financiële Markten (AFM) and Autorité des marchés financiers (AMF) to issue a joint paper calling for regulation at the European Level. However, what would a new regulatory framework look like, what could it achieve, and what effect would it have on the development of this relatively nascent industry?   Whilst the EU have started a study on the ESG rating marketplace and its intricacies, as of yet the market is essentially unregulated. The market they exist to serve is exploding and growing at an incredible rate but, just like the cr

We have reviewed the credit rating situation in China extensively here in Financial Regulation Matters (see here ) and it is well known that the Chinese rating agencies are under massive pressure, both from the Chinese State and also the opening up of the domestic marketplace to the international credit rating agencies for the first time. However, the underlying political dynamics within the Chinese marketplace means that the credit rating agencies within the country are between a rock and a hard place and, yesterday, one of the Chinese credit rating agencies found themselves being thrown between the two.   The Chinese domestic marketplace is in a precarious position at the moment, as a number of defaults rock the confidence in domestic corporate debt market. Whilst this is a trend across the world of course, there have been a number of high profile defaults recently within a relatively short space of time. What increases the pressure is that a number of ‘State-Owned Enterprises