The AMF, the stock market regulator in France, recently reiterated its call for stricter regulation on a Europe-wide basis of the entities providing ESG ratings and other services.  Specifically, the AMF stated that the regulation should "cover the entire range of ESG data, ratings, and services and not be limited to ESG ratings" and that the "regulation should include transparency requirements on methodologies, the underlying data used (source and nature), and the objectives of the products (notably risk or impact)."  The AMF emphasized that although "the analysis of ESG performance remains protean and evolving," so that a "standardisation of methodologies" is not yet appropriate, there must be a "guarantee of sufficient transparency from the players vis-a-vis the market." 

In essence, the AMF has recognized that the provision of ESG ratings and other related services has proliferated, and increased significantly in importance for investors and other market participants.  And this increase in scope and importance has led to a corresponding need for regulation, albeit regulation focused on the provision of information to the market rather than mandating particular activities. 

The significance of this announcement is twofold:  First, it represents a call not just for regulation of ESG factors themselves (as is relatively common nowadays), but of the entities that provide services that enable investors and the market to evaluate the relative ESG performance of companies.  Second, it demonstrates that the focus on ESG criteria with respect to the financial markets is a global phenomenon, and one not limited to the United States and its political climate.  Consequently, regardless of whether the SEC's proposed mandatory climate disclosures are ultimately promulgated as regulations, companies with a global reach must be cognizant of ESG considerations, as significant foreign markets and governments may demand similar disclosures.