EU ESG Ratings Regulation Now in Force — ESMA Supervisory Rules Published August 6

Two Delegated Regulations under the EU ESG Ratings Regulation entered into force August 17, 2026, following publication in the Official Journal on July 28: Delegated Regulation (EU) 2026/872, requiring ESG rating providers to maintain separate organisational structures and working environments for rating personnel distinct from conflicting commercial activities, and Delegated Regulation (EU) 2026/871, establishing standardised disclosure requirements for ESG rating products. Both apply retroactively from July 2, 2026, aligning with the Regulation's application date, and ESMA published fee and penalty rules for ESG rating providers on August 6, establishing supervisory fee structures and fines procedures. The practical effect is that, as of the week ending August 14, ESG rating providers operating in the EU are for the first time subject to mandatory ESMA authorisation, organisational independence requirements, and structured disclosure obligations — ending the era of unregulated ESG ratings in European capital markets. For law firms advising asset managers, private equity sponsors, and corporates that rely on ESG ratings in due diligence, investment mandates, and loan covenant compliance, the rating methodology and independence disclosures now required under the Regulation change the evidentiary weight and auditability of those ratings in legal proceedings and regulatory reviews.