The European
co-legislators have adopted the Regulation on the transparency and integrity of
Environmental, Social and Governance (ESG) rating activities (ESGR). The ESGR
requires fees charged by rating providers to be fair, reasonable, transparent
and non-discriminatory, to reduce the ability of providers to exploit their
pricing power.
This pricing rule, which belongs to a class of
rules known as FRAND(T) rules, does not provide any context or guidance that
clarifies how to apply the pricing policy to a provider’s pricing policy. As a
consequence, providers are facing considerable legal uncertainty.
This article applies
established interpretation methods, including a comparative analysis using
other FRAND(T) rules in the body of European Union financial and digital
regulation, to guide the interpretation of the pricing rule in practice.