EU: Commission finalises its rules integrating ESG factors into credit ratings

Back in 2024, ESMA consulted on proposals aiming to ensure a better incorporation of ESG factors in the credit rating methodologies and subsequent disclosure to the public, as well as to enhance transparency and credibility in the credit rating process.  On 9 November 2026, the European Commission adopted the following Delegated Regulations under the CRA Regulation (Regulation (EC) No 1060/2009): 

• a Delegated Regulation amending Annex I to the CRA Regulation as regards transparency, review and validation of methodologies (C(2026) 7817 final):
  • The amendments explicitly include validation of methodologies alongside reviewing in the relevant organisational requirements.  Furthermore, to enhance transparency regarding the methodological foundations of ratings, and to ensure that market participants are better informed about the rigour underlying credit rating determinations, the amendments require credit rating agencies to disclose not only the methodologies they use but also the processes by which those methodologies are validated.
  • The amendments also introduce a new disclosure requirement, obliging credit rating agencies to highlight ESG considerations underlying ratings or outlooks “prominently” , with a brief explanation.
• a Delegated Regulation amending the regulatory technical standards (RTS) laid down in Commission Delegated Regulation 447/2012 as regards strengthening the transparency and incorporation of ESG factors in credit rating methodologies (C(2026) 7853 final)
  • Among other measures to set criteria that methodologies must meet, the amendments explicitly require a detailed explanation to be included in the methodologies setting out whether and, why ESG considerations, including ESG risks where applicable, are deemed relevant to the credit rating agency’s assessment of creditworthiness, including how such considerations are incorporated in the applicable methodology. The intention here is to ensure adequate traceability of how ESG considerations have been taken into account. 
  • To ensure the delegated act is sufficiently aligned with the CRA Regulation as revised in 2013 (given that the delegated act was not amended at this time), the scope of the delegated act has also been revised to include reference to “rating outlooks”

The Delegated Regulations will enter into force on the twentieth day following publication in the Official Journal of the European Union and will apply twelve months later.