ESMA · ESMA_QA_2853 Answer Published

Defined ranking system

Regulation
ESGR - Regulation (EU) 2024/3005
Topic
Scope (including exemptions)
Submitted
2026-05-22
Answered
2026-05-22
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Question

What practical components should an ESG rating feature to demonstrate the existence of a defined ranking system of rating categories, as required by Article 3 of Regulation (EU) 2024/3005?

Answer

ESG ratings, either in the form of opinions, scores or a combination of both, express a rating provider’s value judgement of a rated item and are prepared based on an established methodology and a defined ranking system of rating categories.   The defined ranking system reflects the rating provider’s value judgement in an ordinal or hierarchical structure and comprises two or more pre-determined rating categories, including the minimum and maximum levels, enabling consistent comparison across rated items. The rating categories can be represented by numbers, letters, colours or other symbols.
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