The Chair 
 
 
 
 
ESMA • 201-203 rue de Bercy • CS 80910 • 75589 Paris Cedex 12 • France • Tel. +33 (0) 1 58 36 43 21 • www.esma.europa.eu 
Mr John Berrigan 
Director General 
Directorate General for Financial 
Stability, Financial Services and 
Capital Markets Union  
European Commission 
Rue de la Loi I/Wetstraat 200 
1049 Brussels, Belgium 
 
Ref: Outcome of ESMA Call for Evidence on Market Characteristics of ESG 
Rating and Data Providers in the EU 
Dear Mr Berrigan, dear Sean, 
I am pleased to be able to provide you with ESMA’s overview of the market for ESG rating 
providers in the EU which is a key topic under both the European Commission’s Strategy for 
Financing the Transition to a Sustainable Economy1 and ESMA’s Sustainable Finance 
Roadmap2.  
As requested in your correspondence of 12 November 2021, ESMA has conducted a public 
call for evidence to gather information on the nature and scale of the market for these products 
in the EU3. We are confident that the strong interest to this call for evidence has enabled us to 
draw some conclusions that will prove useful for the European Commission’s deliberations4. 
While our main line of enquiry has been to establish the number of ESG rating providers active 
in the EU, we are also pleased to provide ancillary information on the characteristics of these 
provider and their business models that may be of relevance for your staff’s considerations. 
Based on our initial analysis, these conclusions generally confirm the concerns raised in 
ESMA’s letter to Commissioner Mairead McGuinness in January 20215.  
Our input is structured to first provide a short introduction to the broader context in which this 
call for evidence was launched, and the key objectives that have guided its development. After 
this, we provide the key findings, both overall, and for the different categories of respondents. 
Finally, we close by outlining our view on the nature and scale of this market in the EU.  
 
                                                           
1 COM (2021) 390 final Strategy for Financing the Transition to a Sustainable Economy 
2 ESMA Sustainable Finance Roadmap 2022-2024 
3 ESMA80-416-250 Call for Evidence on ESG Rating Providers in the EU 
4 In total, 154 responses were received across the three categories of respondent from which input was sought. 
5 ESMA30-379-423, Letter to European Commission on ESG ratings and assessment tools 
24 June 2022 
ESMA22-328-603

2 
Background 
Before discussing the findings arising from the call for evidence, I would like to first draw your 
attention to some of the main developments in this area at international level. First, at a global 
level, IOSCO’s Task Force on Sustainability has recently conducted a similar stock-taking 
exercise and delivered a set of recommendations for ESG rating and data providers6. As co-
chair of the workstream that delivered this report, we are pleased that IOSCO has taken a first, 
clear step to signal securities regulator’s expectations on the quality, reliability and 
transparency of these products. Second, we are seeing a growing momentum amongst 
regulators and supervisory bodies in a number of jurisdictions to assess whether there is a 
need for specific regulatory intervention in this area to address issues such as transparency, 
governance and conflicts of interest789. At the same time, we are also seeing regulators of credit 
rating agencies in other jurisdictions begin to assess whether these products pose issues that 
are relevant to their supervisory mandates10. 
For these reasons, we are pleased that the European Commission is actively engaging on this 
topic through the publication of its own consultation on the functioning of the market for ESG 
ratings in the European Union11. This consultation demonstrates the European Commission’s 
commitment to taking a leading role on this important topic and will help maintain the 
momentum of recent actions under the Strategy for Financing a Transition to a Sustainable 
Economy.   
Objective of Call for Evidence 
The core objective of our call for evidence has been to develop an understanding of the market 
for ESG rating providers active in the EU12 as well as to gather the views of users and entities 
covered by ESG ratings. To achieve this, we split the call for evidence into three parts. The 
first part sought input directly from ESG rating providers, the questions here aimed to establish 
providers’ legal status, ownership structure, level of resourcing and business model. The 
second part sought input from entities using ESG rating products. The questions here aimed 
to establish the nature of their engagement with ESG rating providers and the characteristics 
of any contractual arrangements. The third and final part of the call for evidence sought input 
from entities that are covered or “rated” by these providers. The questions in this part aimed 
to establish the nature of covered entities’ interaction with ESG rating providers and any 
associated costs. In totality, we considered that responses from these three categories would 
provide us with a reliable overview on the main characteristics of the market. 
                                                           
6 FR 09/21 November 2021 Environmental, Social and Governance (ESG) Rating and Data Products Providers 
7 United Kingdom FCA CP21/18 Enhancing climate-related disclosures by standard listed companies seeking views on ESG topics in capital 
markets 
8 Securities and Exchange Board of India – Consultation Paper on Environmental, Social and Governance (ESG) Rating Providers – 24/01/22 
9 Financial Services Agency Japan – Establishment of Technical Committee for ESG Rating and Data Providers – 17/02/22 
10US SEC Office of Credit Ratings Staff Report on Nationally Recognised Statistical Rating Organizations January 2022. 
11 Targeted Consultation on the functioning of the ESG ratings market in the European Union and on the consideration of ESG factors in credit 
ratings 
12 The term “active in the EU” is used to refer to ESG ratings providers who are either, for example, located in the EU, have clients who are 
based in the EU or who are located outside the EU but provide ESG ratings on entities that are headquartered in the EU.

3 
Overview of Findings 
In total we received 154 responses to the Call for Evidence split over the three categories of 
respondent. Based on careful consideration our principal finding is that the number of ESG 
rating providers currently active in the EU is 5913. This figure is derived from a combination of 
information provided by ESG rating providers, users and entities covered by ESG rating 
providers. 
Based on a cross comparison with the responses to the IOSCO consultation, and other 
publications1415, we now consider this number to be a reliable indicator for the size of the market 
in the EU. 
The analysis of the responses to our call for evidence indicates a number of key characteristics 
and trends. First, the structure of the market among providers is split between a small number 
of very large non-EU entities on one hand, and a large number of significantly smaller EU 
entities on the other. The EU entities providing ESG ratings can largely be characterised as 
small or medium sized enterprises. While the legal entities of respondents were spread out 
across almost half of the EU Member States, a large number of these were clustered in only 
three Member States. The predominant business model is investor-pays, however, provision 
of ESG ratings on an issuer-pays basis is more prevalent than anticipated and was indicated 
in around a third of responses from providers. 
Second, the majority of users of ESG ratings are typically contracting for these products from 
several providers simultaneously. Their reasons for selecting more than one provider are most 
notably to increase coverage, either by asset class or geographically, or in order to receive 
different types of ESG assessments. A majority of users contract with a small number of the 
same rating providers, indicating a degree of concentration in the market. The most common 
shortcomings identified by the users were a lack of coverage of a specific industry or a type of 
entity and insufficient granularity of data. Complexity and lack of transparency around 
methodologies were also cited as an issue.  
Third, entities covered by these products are required to dedicate at least some level of 
resourcing to their interactions with ESG rating providers, although the amount is largely 
dependent on the size of the rated entity itself. Most of these entities highlighted some degree 
of shortcoming in their interactions with the rating providers, most notably on the level of 
transparency as to the basis for the rating, the timing of feedback or the correction of errors.  
Finally, as part of this call for evidence we sought input on the relevance of these products to 
EU financial markets and investors, as well as the potential risks that they may pose. While 
not directly connected to our assessment of the nature and characteristics of the market for 
                                                           
13 This figure has been calculated on the following basis: 34 ESG Rating Providers responding to the section ESG rating providers + 25 ESG 
rating providers that were identified by respondents to the section Users of ESG ratings = 59 ESG rating providers active in the EU. Given the 
lack of a universal definition of ESG ratings, and the potential for some ratings products having been self-classified as data products and vice 
versa, a strict approach to categorisation is challenging. As a result, this figure should still be understood as indicative rather than definitive. 
14 See Annex III of FR 09/21 November 2021 Environmental, Social and Governance (ESG) Rating and Data Products Providers 
15 AMF Provision of Non-Financial Data: Mapping of Stakeholders, Products and Services

4 
these providers, we would be happy to discuss our findings with your staff in the near future 
should this be useful for your purposes. 
Conclusion 
We consider the feedback we have received on the market for ESG rating and data providers 
is indicative of an immature but growing market, which, following a number of years of 
consolidation, has seen the emergence of a small number of large non-EU headquartered 
providers. In our view this market structure bears some resemblance to that which currently 
exists for credit ratings. Similar to that market16, there are a large number of smaller more 
specialised EU entities co-existing with larger non-EU entities who provide a more 
comprehensive suite of services.  
We trust that you find this input useful for a possible assessment around the need for 
introducing regulatory safeguards for ESG rating products. I would like to reiterate ESMA’s 
support for the leadership that the European Commission is demonstrating on this important 
topic. My colleagues at ESMA stand ready to elaborate on any of the points raised as part of 
this assessment.  
Should you have any follow up questions or wish to discuss the topic further, please do not 
hesitate to get in contact.  
Yours sincerely 
[signed] 
Verena Ross 
                                                           
16 ESMA80-416-197 – 22/12/21 Report on CRA Market Share Calculation

5 
Annex I 
1 
Methodology for Collecting Evidence 
1. To gather the input for the call for evidence, the consultation was split into three separate 
parts, with the first part addressed to ESG rating providers, the second addressed to users 
of ESG ratings and the third to ESG rating providers. Each section included questions that 
would enable a degree of quantitative analysis, as well as two questions intended to gather 
more qualitative input. To ensure consistency of terminology we cross-referenced the 
terms for ESG ratings and ESG data products that had been published in IOSCO’s report.  
 
2. Given the limited timeframe to collate and analyse the responses that were received, this 
primarily quantitative approach has proven beneficial to deliver an initial set of key findings. 
We consider that given further time to cross-reference answers from different categories 
of respondents it may also be possible to deliver additional insights into some of these 
findings. 
 
3. Nevertheless, we must point out some of the limitations presented by the sample of 
responses. First, not all questions were answered by all respondents in each category. 
This has resulted in the findings for some questions being based on a smaller sample size 
than others. Second, not every question was understood in the same manner by all 
respondents in each category. This has required an element of intuition and interpretation 
in certain cases to ensure cross comparability, most notably on questions relating to 
revenues. Third, the data sample of respondents is not replicated across the different 
respondent categories and cannot be understood as being fully representative of the views 
of all providers, users or covered entities. For example, the ratio of respondents from 
different member states is not replicated across the respondent categories and it does not 
provide an equal weighting among users of differing levels of scale and complexity. Finally, 
the weighting of responses in the section addressed to entities covered by ESG rating 
providers is heavily weighted towards the financial sector. To ensure full transparency on 
the data sample for each question we have included the number of responses on which 
the findings were based alongside the results either in the tables or footnotes. 
 
4. In total, we received over one hundred and fifty responses to the call for evidence, spread 
across the three categories. The breakdown of respondents per category was 34 ESG 
rating providers17, 75 users of ESG ratings and 47 covered entities. 
                                                           
17 The vast majority of respondents (30) to this section answered in the affirmative when asked whether they provided ESG Ratings. Of the 
remaining (4) respondents, who answered in the negative, ESMA considers that two of these cases are at least borderline. Given the lack of 
a universal definition of ESG ratings, and the potential for some ratings products having been self-classified as data products and vice versa, 
ESMA has considered all respondents to the ESG rating providers section of the Call for Evidence as ESG rating providers.

6 
2 
Breakdown of Responses - ESG Rating Providers 
2.1 
Nature of establishment 
 
5. We received 34 responses from ESG rating providers, however not all respondents 
addressed each question. 11 respondents have at least 1 legal entity established in the 
EU, 19 have the legal entity and corporate headquarters established in the EU, and 4 have 
no legal entity or corporate headquarters established in the EU.18 
 
6. Of the respondents located in the EU, three member states (Germany, Italy and France) 
accounted for the location of a majority of their headquarters or legal entities while some 
respondents indicated more than one country in which they are established.19 
                                                           
18 Based on a total of 34 responses 
19 Based on a total of 34 responses 
32%
56%
12%
Legal entity
established in EU
Legal entity and
corporate
headquarters
established in EU
No legal entity or
corporate
headquarters
established in EU
Note: Share of respondents by nature of establishment
Sources: ESMA
4
4
3
2
2
1
1
1
1
1
1
1
8
4
4
2
1
1
1
1
1
1
0
2
4
6
8
10
12
14
DE
IT
FR
ES
SE
HU
LU
DK
PO
NL
GR
RO
NO
Legal entity and corporate headquarter established in EU
Legal entity established in EU
Note: Number of respondents with one or more legal entity in EU or with headquarters in the EU, by country.
Source: ESMA

7 
2.2 
Nature of legal entity 
 
7. Half of the respondents indicated that they are an independent legal entity without a group 
structure. The other half are either parent companies or subsidiaries of a group structure. 
Combining this information with the nature of establishment, the majority of ESG rating 
providers are independent legal entities (no group structure) established in EU.20 
 
 
                                                           
20 Based on a total of 32 responses. 
19%
31%
50%
Parent company
witihin group
structure
Subsidiary within
group structure
Independent legal
entity, no group
structure
Note: Share of respondents by nature of legal entity
Source: ESMA
2
2
2
5
5
2
2
12
0
2
4
6
8
10
12
14
16
18
20
Legal entity established in EU
Legal entity and corporate
headquarters established in EU
Independent legal entity, no group
structure
Parent company witihin group structure
Subsidiary within group structure
Independent legal entity, no group structure
Note: Number of respondents by nature of establishment and nature of legal entity
Source: ESMA

8 
2.3 
Financial regulatory authorisation, registration or supervisory regime21 
  
 
8. Around a third of respondents (12) reported that they are currently subject to a financial 
regulatory authorisation, registration or supervisory regime, while 22 responded that they 
are not22. Of the 12 respondents that replied in the affirmative, a total of 9 different 
regulatory frameworks and 7 supervisory authorities were mentioned as relevant. 
However, these frameworks relate to services other than ESG ratings and data. 
 
 
 
                                                           
21 Note: An ESG rating provider may be supervised by more than one supervisory authority. 
22 Based on 34 responses. The breakdown by nature of establishment covers 33 responses. 
65%
35%
No
Yes
Note: Respondents to ESMA's call for evidence, indicating if the ESG rating
provider is subject to any financial regulatory authorisation, registration or
supervirory regime
Source: ESMA
5
14
3
5
5
1
0
2
4
6
8
10
12
14
16
18
20
Legal entity established in EU
Legal entity and corporate
headquarters established in EU
No legal entity or corporate
headquarters established in EU
Subject to financial regulatory authorisation
Not subject to financial regulatory authorisation
Note: Number of respondents by nature of establishment and subjection to any financial regulatory authorisation,
registration or supervisory regime
Sources: ESMA
3
1
1
2
1
1
1
1
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
ESMA
FCA
PRA
SEC
SFC
CNMV
AFM
HQ
Legal entity
Note: Supervisory authorities by legal establishment
Sources: ESMA

9 
2.4 
Corporate structure and financials  
  
 
9. The majority of ESG rating providers that responded outlined that they are not publicly 
listed (27 respondents, 84%). Amongst respondents that are publicly listed, 1 ESG rating 
provider is listed inside the EU and 4 are listed outside the EU.23 Out of 21 respondents, 15 
ESG rating providers (71%) had a balance sheet of less than 10 million euros in 2021 (most 
of the responses provided for 2019 and 2020 were identical).24 
 
 
                                                           
23 Based on 32 responses. 
24 Based on 20 responses. When gathering input on the size of ESG rating providers, we asked for details on balance sheet size, and selected 
thresholds that are aligned with the European Commission’s categorisation of small and medium sized enterprises. The basis for selecting 
balance sheet size, as opposed to another metric such as annual revenue, was to account for possible situations where providers may have 
been offering these products below cost, in order to build up market share. Using balance sheet size as a metric, we are still able to gauge 
the relative size of providers, even where they would be engaging in this type of behaviour. 
 
3%
13%
84%
Listed inside
the EU
Listed outside
the EU
Not listed
Note: Share of respondents by corporate structure
Source: ESMA
15
1
1
3
0
2
4
6
8
10
12
14
16
Balance sheet
< 10 M
Balance sheet
10 m > 43 M
Balance sheet
43 m > 100 M
Balance sheet
> 500 M
Note: Number of respondents by balance sheet figures in 2021
Sources: ESMA

10 
2.5 
Nature of business model25  
 
 
10. A majority of respondents indicated that that they are “for-profit specialist providers”, with 
around a third of respondents indicating that they are “for-profit large providers” 26. A large 
majority of ESG rating providers outlined that they also offer other ESG data products (73% 
of respondents).27 
 
     
 
2.6 
Revenues  
11. The annual average revenue of respondents for 2020 amounted to EUR 22.7 million (EUR 
23.7 million for EU-based providers). In comparison, the median was EUR 5.5 million (EUR 
3.8 million euros for EU-based providers). We consider these figures indicate a relatively 
large number of providers with small revenues.  
                                                           
25 Respondents to the Call for Evidence were requested to describe their business model as one of (a) For-profit large provider: offering ESG 
ratings, ESG data products as well as non-related financial information products or services (b) For-profit specialist provider: offering ESG 
ratings and ESG data products (c) Non-Profit provider: offering ESG rating and ESG data products. 
26 Based on 32 responses. The breakdown by business model covers 31 responses. 
27 Based on 33 responses. The breakdown by subjection to financial regulation covers 32 responses. 
35%
56%
9%
For-profit large
provider
For-profit
specialist
provider
Non-Profit
provider
Note: Share of respondents by business model
Source: ESMA
2
3
1
5
5
3
10
2
0
2
4
6
8
10
12
14
16
18
20
For-profit large provider
For-profit specialist provider
Non-Profit provider
Parent company witihin group structure
Subsidiary within group structure
Independent legal entity, no group structure
Note: Number of respondents by business model and nature of legal entity
Source: ESMA
73%
18%
9%
ESG rating and
data products
ESG rating
products only
ESG data
products only
Note: Share of respondents by type of products provided
Source: ESMA
6
13
3
1
4
5
0
2
4
6
8
10
12
14
16
18
For-profit large provider
For-profit specialist provider
Non-Profit provider
Not subject to financial regulation
Subject to financial regulation
Note: Number of respondents by businees model and subjection to any financial regulatory authorisation,
registration or supervisory regime
Source: ESMA

11 
12. The breakdown of annual revenues by products per respondent indicates that average 
annual revenues for ESG ratings accounted for EUR 6.1 million whereas average revenues 
derived from other ESG data products was EUR 2.2 million. Average revenues derived 
from EU clients represented EUR 7 million.  
 
 
 
Revenues 
Total 
Revenues EU 
clients  
Revenues ESG 
ratings 
Revenues ESG 
data products 
Median revenue 
(EUR) 28 
5,500,000 
1,000,000 
276,000 
1,000,000 
Average revenue 
(EUR) 
22,688,691 
7,101,911 
6,131,889 
2,275,626 
Response Sample 
Size 
13 
19 
10 
7 
 
3 
Breakdown of Responses – Users of ESG Ratings 
3.1 
Nature of establishment  
 
13. When asked for details on the nature of their establishment in the EU, 30 respondents 
indicated that they have either one or more legal entities established in the EU, while 27 
respondents indicated that they have both their headquarter and a legal entity established 
in the EU.29 The majority of respondents with only a legal entity in the EU (i.e. not 
headquartered) are located in Germany (22%) and Italy (19%), followed by Luxembourg 
(14%) and Ireland (11%).  Belgium and France account for 8% of established legal entities, 
                                                           
28 The median has been rounded up to the closest 10,000 (e.g., 510,000 instead of 508,600) 
29 Based on 75 responses. The count of entities indicated as ‘others’ includes five industry associations. 
40%
36%
12%
12%
Legal entity
established in the
EU
Legal entity and
corporate
headquarters
established in EU
No legal entity or
corporate
headquarters
established in EU
Other
Note: Share of respondents (users of ESG ratings), by nature of establishment
Sources: ESMA

12 
followed by Croatia (6%) and Latvia, Sweden, Spain, Ireland and the Netherlands (3% 
each).  
 
 
14. Out of the 27 respondents with their headquarter and a legal entity established in the EU, 
30% are headquartered in Italy, 18% in France, followed by 15% in Croatia and Germany 
respectively. 11% are headquartered in the Netherlands, 7% in Spain and 4% in 
Luxembourg.   
 
15. Out of the 9 respondents that do not have any legal entity or corporate headquarters 
established in the EU, 7 indicated that they have their headquarters in the UK. 
BE
8%
DE
22%
FR
8%
HR
6%
IT
19%
LU
14%
LV
3%
SE
3%
ES
3%
NL
3%
IE
11%
Note: Respondents (users of ESG ratings) with one or more legal entity
established in the EU, by country.
Sources: ESMA
DE
15%
ES
7%
FR
18%
HR
15%
IT
30%
LU
4%
NL
11%
Note: Respondents (users of ESG ratings) with a legal entity and corporate
headquarters established in the EU, by country.
Sources: ESMA

13 
3.2 
Financial regulatory authorisation, registration or supervisory regime  
 
16. A large majority of users of ESG ratings are subject to existing financial regulatory 
authorisation, registration or supervisory regimes.30 Out of these, a further 47 respondents 
have provided insight into the supervisory authority they are registered with, with some 
entities indicating that they are registered with more than one supervisory authority. More 
than two thirds (71%) indicated they were registered with securities market’s supervisory 
authorities, but roughly 30% also reported to be registered with central banks. 
 
 
17. A further 18 respondents have provided insight into the regulatory framework they are 
subject to. Out of these 18 respondents, the majority referred to AIFMD (67%) and UCITS 
(50%), followed by MiFID/MiFIR (22%), Solvency II (18%), BMR (12%) and SFDR (12%). 
Additionally, 59% of respondents also indicated to be subject to a set of various national 
regulatory frameworks, alongside the ones listed above.  
 
                                                           
30 Based on 69 responses.  
79%
13%
8%
Yes
No
N/A
Note: Share of respondents (users of ESG ratings) subject to existing
financial regulatory authorisation, registration or supervisory regimes
Source: ESMA
0
2
4
6
8
10
12
14
16
18
Bank of
Italy
ECB-
SSM
BaFIN
HANFA
CSSF
Consob UK FCA
AMF
CBoI
DNB
AFM
FCMC
LV
IVASS
German
Federal
Bank
HQ
Legal entity
Note: Respondents (users of ESG ratings) by supervisory authority they are registered with. Some respondents mentioned more than one supervisory authority.
Source: ESMA

14 
 
 
3.3 
Estimated total value (EUR) of Assets under Administration and/or Assets under 
Management  
18. The total value of assets managed by respondents amounted to EUR 7,824 billion. 31  The 
average value of assets under management (AuM) amounted to EUR 190.8 billion, and 
the median to EUR 36 billion. The very high standard deviation (EUR 409.3 billion) 
highlights a combination of small and large asset managers amongst the respondents. 32   
 
 
3.4 
Estimated total value (EUR) of investments for which ESG rating and/or other ESG 
data products are used as input in investment decision making process  
19. Respondents indicated that the total value of investments for which ESG rating and/or other 
ESG data products are inputs in the investment decision making process is EUR 3,787 
                                                           
31 Based on 41 responses. To avoid double counting, these figures exclude assets reported by custodians, consultancies and industry 
associations and answers by respondents indicating ‘0’. A total of 3 responses were excluded.  
32 The end of the lines in the boxplot chart correspond to 10th and 90th percentiles. The outside edges of the box correspond to the 25th and 
75th percentile. The line in the middle of the box corresponds to the median.  
 
0%
20%
40%
60%
80%
AIFMD
Others
UCITS
MiFID/
MiFIR
Solvency II
BMR
SFDR
CRD/CRR
CSRD
MMFR
MAR
AML
EU
Taxonomy
NFRD
Note: Repondents (users of ESG ratings) by regulatory regime they are subject to, in % share of all respondents. Some respondents mentioned more than one regulatory regime.
Source: ESMA
0
100
200
300
400
500
600
700
Estimated total value of administrated
assets and/or asset under management
Estimated total value of investments for
which ESG rating and/or other ESG data
products are used as input in investment
decision making process

15 
billion (i.e. 48% of total assets under management).33 The average per respondent was 
EUR 97 billion (50% of average assets under management) and the median was EUR 17 
billion. 34  The share of investments for which ESG rating and/or other ESG rating products 
are used as input varies widely across respondents, ranging from 0% to 100%.  
 
 
 
 
 
3.5 
ESG rating or ESG data products contracted for by users  
 
20. A significant majority of the 66 respondents (42) indicated that they use both ESG ratings 
and other ESG data products, while 4 respondents indicated to only use ESG ratings and 
6 respondents only other ESG data products.35 14 respondents indicated to not use either 
type of products.  
 
 
                                                           
33 Based on 38 responses.  
34 One entity responded to Q6 (value of investments using ESG ratings) but not Q5 (assets under management), therefore the figures provided 
in % of AuM exclude this respondent.  
35 Based on 66 responses. 
 
0%
20%
40%
60%
80%
100%
0
10
20
30
40
Note: Share of investments for which ESG ratings and/or ESG data products are used as input
in the investment decision making processin % of total assets under management. Each unit on
the horizontal axis corresponds to one respondent.
Source: ESMA
64%
6%
9%
21%
ESG rating
and data
products
ESG rating
products only
ESG data
products only
None
Note: Share of respondents (users of ESG ratings) by type of ESG product
they currently contract for.
Source: ESMA

16 
3.6 
Selection and Use of Multiple ESG rating providers  
21. Of the 34 respondents to this question, 77% use more than one provider for ESG ratings, 
while 23% use only one provider36. The ESG rating providers most frequently mentioned 
were MSCI (28 mentions) followed by Morningstar/Sustainalytics (25), ISS (24), S&P (17), 
Moody’s/VE (12), Refinitiv (11), RepRisk (9), CDP and Bloomberg (7 each), 
FactSet/Truevalue Lab (5), EcoVadis, ICE and Carbon4Finance (4) and Maplecroft (3). 
The ‘Others’ were mentioned only once or twice by respondents. 
 
 
22. In relative terms, MSCI has the highest share of mentions (17%), followed by 
Morningstar/Sustainalytics and ISS (both 15%), S&P (11%), Moody’s/VE and Refinitiv (7% 
each) and RepRisk (6%). The 22% ‘Others’ consist of all providers which have been 
mentioned less than 9 times.37 
 
                                                           
36 Based on 44 responses.  
37 Note that ‘Others’ here includes everything mentioned by the respondents, including consultancies and classification schemes (e.g., GRI, 
Climate Bonds Initiative etc.). Excluding these would increase the relative market share of the seven respondents included in the graph.  
 
MSCI
Morningstar/
Sustainalytics
ISS
S&P 
Moodys/VE
Refinitiv
RepRisk
CDP
Bloomberg
FactSet/
Truevalue Labs
EcoVadis
ICE 
Carbon4
Finance
Maplecroft
Others (45)
0
5
10
15
20
25
30
Note: ESG providers used by respondents (users of ESG ratings), by count of mentioning.
Sources:ESMA
MSCI
17%
ISS
15%
Morningstar/ 
Sustainalytics
15%
S&P 
11%
Moodys/V
E
7%
Refinitiv
7%
RepRisk
6%
Others
22%
Note: ESG providers by number of responses mentioning each data provider
(responses can mention one or more providers), divided by universe of
respondents (n=45). Includes both ESG rating providers and other ESG data
product providers.
Sources: ESMA

17 
23. Per investment value the following figures were reported: MSCI (EUR 3.2tn) and ISS (EUR 
3tn), followed by Morningstar/Sustainalytics (EUR 2.5tn), S&P (EUR 2.3tn), RepRisk (EUR 
2.2tn), Refinitiv (EUR 1.7tn), Moody’s/VE (EUR 1.6tn) and CDP (EUR 1.3tn).38 
  
 
3.7 
Contractual Engagement with ESG rating providers 
24. Of the 11 respondents that provided concrete details on the contractual lengths of their 
engagement with ESG providers, the average contractual length for ESG rating products 
is assessed as being approx. 20 months, with a minimum of 12 months and a maximum of 
60 months. Of the 14 respondents who indicated how long they have been contracting with 
ESG rating providers the average length for which they have been contracting for these 
products was approx. 67 months, with a minimum of 1 month and maximum of 218 months 
respectively.  
 
25. One respondent indicated that their contract runs for a duration of a minimum of one year, 
with the possibility to renew or extent the contract each year, however this is often 
accompanied by a price increase. In addition, transparency issues seem to exist regarding 
the minimum term and fee rates of ESG data and rating contracts, leading to different users 
contracting for the same ESG products under differing contractual terms.  
 
 
3.8 
Reasons behind the choice of the ESG rating or data provider(s)39 
26. In general terms, users of ESG ratings indicated that they tend to opt for several providers, 
in order to fulfil a variety of needs, such as asset type coverage, geographical coverage, 
compliance with regulatory reporting requirements, and type of ESG assessment provided 
                                                           
38 These estimates were computed by matching the figures provided by respondents to question 6.2.1. Q6 (estimated total value of 
investments for which ESG ratings and/or other ESG data products are used as input in investment decision making process) with the different 
providers listed by the respective entities. Note that the answers did not specify which precise amount of the estimated total relates to each 
specific provider, hence the full amount was used for each provider listed by the respondent, which may lead to over-estimation or under-
estimation of certain providers. 
 
39 Based on 46 responses. 
 -
 500
 1,000
 1,500
 2,000
 2,500
 3,000
 3,500
 MSCI
 ISS
 Morningstar/
Sustainalytics
 S&P
 RepRisk
 Refinitiv
 Moodys/
VE
 CDP
Note: ESG providers by estimated investment value for which their product is being used, in EUR bn. Providers below a value of EUR 1 trillion have been excluded for visual
purposes.
Source: ESMA

18 
(e.g., focus on Environmental or Social and Governance factors, in form of risk assessment 
or impact assessment). 
 
27. From the responses received, the most commonly sought attribute in an ESG rating 
provider (more than 70% of ESG rating users) was the depth and breadth of data coverage. 
 
28. Due to the variety of asset types covered by many of ESG ratings providers, users agreed 
that the choice tends to be related to the entities which can provide more accessible and 
complete analysis for their customers, in terms of type and number companies assessed 
and ESG data and the variety of key performance indicators that are offered.  
 
29. The second most sought after attribute from ESG rating providers (34%) was data quality 
and transparency of methodologies and data. The importance of this attribute seemed to 
be often mentioned as a key factor also for reputational risk management and transparency 
to the users' clients.  
 
30. Another important factor in users’ choices is the market relevance of an ESG rating 
provider, there were two main reasons for this. First, the usability of data and ratings of a 
larger provider in the market is higher and allows for more comparability in the industries. 
Second, users tend to listen to clients’ preferences, which might match with the most 
relevant providers in the market. Ease of data access and integration into own system and 
data usability is also an important factor. 
 
31. For contractual purposes, users mentioned two main key drivers: price-quality ratio and 
existing commercial relationships with the company that provides ESG ratings. A slight 
minority also mentioned the reputational aspect of the ESG rating provider as key driver of 
the choice. 
 
3.9 
Reasons for choosing more than one ESG rating provider (if applicable)40 
32. ESG ratings users were overwhelmingly in agreement that more than one ESG rating 
provider is needed to allow for the holistic assessment of an ESG profile of the entity or 
issuer. In this regard, divergence between different rating providers seems to be significant 
due to the level of specialisation of ESG ratings provided in a given set of data, geography 
and sector, which creates a fragmented framework of ESG rating products offered.  
 
33. More than 70% of respondents agreed that the main reason for relying on more than one 
ESG rating provider is to broaden the coverage of entities as well as to complement their 
analysis with additional data points and compare between different ratings. Often, ESG 
ratings users noted that given the early stages of the ESG rating market and absence of 
standardisation, contracting with multiple ESG rating providers offers the possibility to 
validate the ratings obtained by each of them. A minority of users noted that contracting 
with various ESG rating providers is mainly driven by their clients’ preferences.  
 
                                                           
40 Based on 38 responses.

19 
3.10 Views on shortcomings in the ESG rating or ESG data products currently 
contracted for41 
34. In general, users tended to agree on some main shortcomings that they identified in their 
experience with one or multiple ESG rating providers. 
 
35. First, as expected respondents identified a lack of coverage on industry, type of entity and 
granularity of data, which seems particularly an issue for SMEs and non-listed companies, 
as having a fundamental impact on the usability and relevance of ESG ratings. In addition, 
users also highlighted: 
 
o Low levels of transparency of methodologies and of data sources were identified 
as the most relevant factors hampering the reliability of the final ratings and their 
comparability between ESG rating companies.  
o Lack of comparable and standardised data, together with a proven low correlation 
between ESG ratings provided by different entities, and a misalignment on the 
definition of “ESG”, were identified as major challenges.  
o As data used by a number of ESG rating providers is drawn exclusively from 
publicly available sources, SMEs can be disproportionally disadvantaged when it 
comes to levels of coverage.   
o The need for an alignment of definition and approaches concerning what is meant 
by “ESG” and what is the purpose of an ESG rating (e.g., the objective of the rating 
can vary).  
o Delays in updating the underlying data of ESG ratings, and frequent unavailability 
or late responsiveness to error reporting or comments submitted by companies 
(especially on unsolicited ratings). Users often outlined that in their view ESG rating 
providers lack an adequate number of skilled resources to ensure timely follow-up 
on their portfolios. 
o Some respondents observed a “US-bias” resulting from the increasing market 
concentration of ESG rating providers, especially US-based, which brings some 
challenges for EU users. Respondents had the view that some methodologies are 
consistently biased towards larger and/ or listed companies, as well as US 
industries, while EU companies, whose operations  are more strictly correlated with 
their geography (and their national regulations), are penalised by the models used.  
o Commercial terms - Increase in prices applied to users and conflict of interest risks 
have also been highlighted as key issues for users.  Recent increase in market 
concentration among ESG rating providers is seen as a driver behind changes in 
pricing policies, and increasing prices, which are considered an issue for a relevant 
number of users.  
 
                                                           
41 Based on 51 responses.

20 
3.11 Views on levels of methodological transparency, including transparency around 
data sourcing42. 
 
 
36. In general, the key issues for respondents around methodologies were the importance of 
data accuracy as well as transparency on rating process and data sources. Respondents 
were also strongly in favour of EU wide measures being considered in order to limit the 
mis-selling and misuse of ESG ratings.  
  
37. While it was commonly agreed that the level of methodological transparency varies across 
providers, 32 respondents (63%) argued that the level of methodological transparency is 
still not satisfactory. In this respect, only 7 respondents (23%) were of the view that levels 
of transparency and disclosure were improving, but even among these, it was suggested 
that more could be done to improve disclosures by rating providers. Methodologies were 
deemed as often too complex and unclear, and sometimes providers were not able to 
further clarify how their results had been determined. This raised questions about the level 
of reliability.  
 
 
 
 
 
 
 
                                                           
42 Based on 51 responses. 
23%
14%
63%
Satisfied
Somewhat
satisfied
Not satisfied
Note: Share of respondents satistified, somewhat satisfied or not satisfied by
the level of methodological transparency for the product.
Source: ESMA

21 
4 
Breakdown of Responses – Covered Entities 
4.1 
Nature of establishment 
 
38. Of the 43 covered entities that responded to the call for evidence, 41 have their corporate 
headquarters established in EU, 1 has a legal entity established in the EU, 1 has no legal 
entity or corporate headquarters in EU.43 When asked to identify the member states in which 
they were located a majority of the respondents outlined that their legal entity and corporate 
headquarters in the EU were domiciled in either Germany, France or Italy. 
 
 
 
                                                           
43 Based on 43 responses. 
2%
96%
2%
Legal entity
established in EU
Legal entity and
corporate
headquarters
established in EU
No legal entity or
corporate
headquarters
established in EU
Note: Share of respondents by nature of establishment
Source: ESMA
0
2
4
6
8
10
12
DE
FR
IT
ES
BE
DK
NL
HR
IR
SE
AT
PT
PO
LU
CZ
Rest
Note: Number of legal entities and/or headquarters established in the EU, by country.
Source: ESMA

22 
4.2 
Financial regulatory authorisation, registration or supervisory regime  
 
39. Of the 42 respondents who confirmed whether or not they were subject to a financial 
regulatory authorisation, registration or supervisory regime, 30 responded that they are, 
while 11 responded that they are not.  Those respondents who are subject to a financial 
regulatory regime fall under a broad variety of (either national or EU-wide) regulatory 
regimes. Of the 30 respondents here, 21 provided information on the supervisory authority 
they are registered with. 
 
29%
71%
No
Yes
Note: Share of respondents subject to any existing financial regulatory
authorisation, registration or supervisory regime
Source: ESMA
6%
6%
11%
6%
11%
12%
6%
6%
6%
6%
6%
6%
6%
6%
CRR
MAR
German Banking Act
German Pfandbrief Act
German Securities Trading Act
CRR
CRD
MiFID
SRMR
BRRD
German Commercial Code
German Stock Corporation Act
SSM
German Securities Deposit Act
Note: Share of respondents by financial regulatory regime they are subject to.
Source: ESMA

23 
 
4.3 
ESG rating providers that provide a rating for your company 
40. The ESG rating providers mentioned most frequently as providing ESG ratings on their 
company 
were: 
MSCI 
(41 
mentions), 
Moody’s/VE 
(33), 
ISS 
(31), 
Morningstar/Sustainalytics (24), CDP (22), S&P (20), FTSE-Russell (16) and Ecovadis 
(12).44 
 
 
41. Respondents further indicated that they had been rated for an average of 7 years by ESG 
rating providers. However, in a few cases this extends to a much larger time period, up to 
more than 20 years. 
                                                           
44 Based on 37 responses. 
7
3
3
3
2
2
2
2
1
1
1
1
1
0
1
2
3
4
5
6
7
8
ECB-SSM
BaFIN
IVASS
AMF
HANFA
CONSOB
FSMA
Bank of
Italy
COVIP
AGCom
FSA
EIOPA
ACPR
Note: Number of covered entities mentioning supervisory authorities.
Source: ESMA
41
33
31
24
22
20
17
16
12
7
5
5
5
4
4
3
3
2
2
2
0
5
10
15
20
25
30
35
40
45
Note: Number of covered entities mentioning ESG rating providers.
Source: ESMA

24 
4.4 
Interactions with ESG rating providers providing ESG ratings for covered entities 
42. The most frequent means for these entities to interact with ESG rating providers was 
through the use of IT platforms, that are accessible through ratings providers’ websites. It 
is through these platforms that covered entities can provide input to questionnaires and 
provide comments. However, it was also noted that interactions through e-mails are 
common, followed by conference calls. At the same time, it should be noted that some 
covered entities reported no contact at all with the rating providers. 
 
4.5 
Communication and opportunities for error correction  
43. Mostly, covered entities reported that the opportunity to correct any errors depends on the 
providers. Most of the providers do have this possibility in place, often before the rating is 
published, mainly through their IT platforms, thus giving the opportunity to comment on the 
draft report and receive feedback where available. 
 
44. In this respect general issues with these interactions were highlighted: 
 
o For unsolicited ratings, the general level of communication with the agencies is 
deemed low, thus also undermining the opportunity to report errors when identified. 
In this case, covered entities usually are not notified of the publication of their ratings, 
and only in limited cases they can provide feedback to the ESG rating providers in 
case of comments. 
o When the opportunity to comment or report feedback is given, this is quite often 
reported as a slow and difficult process, which can also take several months, leading 
to distort ESG evaluations that are publicly available.  
o Usually, identifying errors and their relevance to the final rating can be a cumbersome 
and difficult process, made more difficult by the lack of transparency around key 
inputs  to the rating process.  
o Some entities noted that some providers offer the opportunity to identify and 
communicate errors for an additional fee.  
o Some entities also reported notable difficulties to receive objective reasons for the 
ratings assigned, due to the unavailability of transparent rating processes and 
methodologies.