ESMA draws a legal-separation line between ESG ratings and advisory work
Inside Practice · OCTOBER 9, 2026 · 1 MIN READ
On October 7, 2026, the European Securities and Markets Authority published a Q&A explaining that consulting capable of affecting an ESG rating provider's independence—including advice on sustainability disclosures, KPIs or strategies intended to improve a client's rating—falls within the business-separation requirement in Article 16(1)(a) of the ESG Ratings Regulation. The answer distinguishes such work from more remote services such as tax and accounting advice, which ordinarily would not justify legal separation. Rating providers and multidisciplinary advisers should therefore map services by their potential effect on rating outcomes, not merely by internal department labels. Law firms advising providers or acquisitive professional-services groups should test governance, information barriers and entity structures before the November authorization cycle creates avoidable remediation work.