What happened
The Financial Conduct Authority (FCA) has finalised the rules that bring ESG ratings under financial regulation for the first time. As Mark Segal reported for ESG Today, the rules follow the legislation the government finalised in 2025 to put ESG ratings inside the FCA's remit. The FCA consulted on draft rules (CP25/34) from December 2025 to March 2026, received 90 responses, and published its policy statement, PS26/22, on 3 November 2026. The main points, checked against the FCA's own page and the policy statement:
- Authorisation: from 29 June 2028, firms providing ESG ratings in the UK need FCA authorisation and the relevant permission, unless an exclusion applies. The FCA says carrying on the activity without authorisation after that date will be a criminal offence under the Financial Services and Markets Act 2000.
- Timeline: a pre-application support service opens in February 2027 and the authorisation gateway opens on 24 June 2027, with staggered application windows.
- What providers must do: meet baseline FCA standards plus tailored rules on transparency, governance, systems and controls, and conflicts of interest. The FCA says its approach follows international standards from IOSCO and draws on the ICMA code of conduct for ESG ratings and data providers.
- Rated companies: providers must notify a company before making a new rating of it available (with a minimum notice period of 2 business days, which the FCA says will not be enough in every case), give access to the data underlying the rating, offer factual corrections, and run feedback and complaints channels. Detailed disclosures go to rated companies on request rather than automatically, a change from the draft.
What it means for your business
If you are rated, you gain rights, not duties. ESG ratings are used by asset managers, lenders and others to decide where money goes, and your emissions are often part of what is scored. Nothing in PS26/22 asks a rated company to report more. What changes is that, from June 2028, you will hear about a new rating before it goes out, you can see the data it rests on, and you can ask for factual errors to be fixed. The FCA is clear that corrections cover facts, not a provider's choice of method.
Your own published figures become the reference point. A correction request is only as strong as the figure you can point to. If your annual report, SECR disclosure or Carbon Reduction Plan sets out your emissions with the factor year and method, it is straightforward to show a provider that its number differs from yours and why.
If you are not rated, this is worth knowing rather than acting on. Ratings mostly cover listed companies and bond issuers, but the questions raters ask tend to reach their suppliers in time, through customer questionnaires.
A worked example: the size of a factor error
Take an illustrative company that used 400,000 kWh of grid electricity in a year. On the 2026 government factor for UK electricity (0.13096 kg CO2e per kWh), its location-based Scope 2 is 52.38 tonnes CO2e. If a data provider estimated the same use with the 2019 factor (0.2556 kg CO2e per kWh), it would show 102.24 tonnes, 49.86 tonnes or 95% too high, because the grid has got cleaner since then. That is a factual difference with a clear source on each side: the kind of error the new correction process is meant to fix.
What to do now
- Find out who rates you. If you have investors, lenders or listed bonds, ask them which ESG ratings they use.
- Publish your figures with the method. State the period, the scopes, the conversion factor year and whether Scope 2 is location-based or market-based. Our guide to location-based and market-based Scope 2 explains the difference.
- Note the dates. Rules apply from 29 June 2028. Providers' notification duty covers new ratings from then; for older ratings you will be able to ask for the underlying data and propose corrections.
- Read the FCA's summary. The PS26/22 page lists who the rules are for and what happens next.
