FCA sets 2028 deadline for ESG ratings authorisation

From that date, providing an ESG rating without the required authorisation will breach the general prohibition under the Financial Services and Markets Act 2000 — and may constitute a criminal offence. The FCA posted the announcement this week, confirming that ESG ratings provision will become a regulated activity under article 63U of the Regulated Activities Order for the first time.

ESG ratings assess companies, other entities, assets or financial products against environmental, social and governance criteria. The new regime includes baseline FCA rules alongside additional requirements designed to improve trust, transparency and consistency across the market — areas where critics have long argued that differing methodologies make like-for-like comparisons difficult.

The authorisation gateway opens on 24 June 2027. Firms with annual revenue of £500,000 or more from ESG ratings are scheduled to apply between 24 June and 29 July 2027, while those below that threshold have a separate window running from 30 July to 31 August 2027. Submitting an application does not guarantee authorisation.

Certain members of designated professional bodies who comply with their body’s standards may be exempt.

Regulated providers will also be required to submit regulatory returns from 29 June 2028. The UK Government decided to bring ESG ratings under regulatory oversight after consultation, with the framework intended to cover ratings produced using an established methodology and defined ranking categories where the rating is likely to influence an investment decision.

Key information

• Authorisation gateway opens: 24 June 2027
• Higher-revenue firms (£500,000+) application window: 24 June – 29 July 2027
• Lower-revenue firms (below £500,000) application window: 30 July – 31 August 2027
• Regime comes into effect: 29 June 2028; operating without authorisation after this date may constitute a criminal offence under the Financial Services and Markets Act 2000