**Impact and Transparency in ESG Rating: A New Regulation for a Sustainable Future**

In recent years, attention to sustainable business practices has grown exponentially. The topic of environmental, social, and governance (ESG) ratings has emerged as a fundamental indicator for assessing the social and environmental impact of companies. In this context, the new regulation approved by the Council of the European Union represents a significant milestone. The primary aim of this regulation is to simplify the understanding of ESG ratings, increase their transparency, and ensure genuine comparability among different assessments.

### The New Regulation

The regulation, which amends previous provisions related to transparency and the integrity of ESG rating activities, assigns a pivotal role to the European Securities and Markets Authority (ESMA). This body will be responsible for authorizing and monitoring ESG rating agencies, ensuring that they adhere to strict obligations regarding transparency and analytical methodologies.

### Fundamental Principles

One of the fundamental pillars of the new regulation is the *separation of activities*. This measure has been introduced to mitigate the risk of conflicts of interest that could affect the integrity of the rating process. The separation implies that agencies cannot simultaneously engage in commercial activities and analytical functions, thereby ensuring an impartial approach to ESG assessments.

Moreover, the regulation has been specifically designed for rating agencies based in the European Union. However, agencies outside the EU wishing to enter the European market will need to follow an authorization process for their ratings, ensuring that external assessments meet the same quality and transparency standards.

### Operational Impacts for Industry Operators

The implementation of this regulation entails significant operational changes for rating providers. Firstly, these operators will need to take steps to obtain authorization from ESMA. It will be essential for them to provide detailed and updated information about their methodologies and the data sources used for evaluations.

This new regulation guides rating providers towards a convergence on uniform methodological standards. Additionally, it introduces clear guidelines to ensure transparency in their procedures, enhancing trust between investors and rated companies. The separation of rating functions from commercial activities plays a crucial role in ensuring the impartiality of assessments, thereby contributing to the establishment of a reliable and respected rating system.

### A Code of Conduct for All

This initiative is not limited to establishing rules for rating agencies located in the EU. It also extends to external entities, ensuring that, regardless of their origin, any agency wishing to operate in Europe must adhere to the same standards of transparency and integrity. This measure integrates the European market into a global context, extending the approach to reliability and accountability to rating providers worldwide.

### The Transition to a Sustainable Future

The new regulation represents an unavoidable response to the growing demand for greater accountability from companies and investors. Strengthening ESG rating criteria will not only promote transparency but also contribute to creating a sustainable ecosystem where companies are incentivized to improve their environmental and social performance. Now more than ever, investments in sustainable practices prove to be not only ethical but also a capital opportunity.

### Conclusion

In summary, the new regulation aimed at governing ESG rating activities is a significant response to current challenges in corporate sustainability. Transparency, independence, and comparability of ratings will allow investors to make more informed and responsible decisions. The willingness to extend these principles globally highlights the increasing importance of ESG practices in the current economic landscape.

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