On 2 July 2026, the EU ESG Rating Regulation, Regulation (EU) 2024/3005, entered into application. For the first time, providers of ESG ratings in the European Union operate under formal supervision, with common expectations for transparency, governance and independence. We see this as a turning point for the industry, and a welcome one.
SESAMm welcomes the Regulation because its objectives have been ours for a long time. On the day it entered into application, we notified ESMA of our intention to continue operating in the Union and to seek authorization as an ESG rating provider. This article explains how we have prepared, how we take part in the wider regulatory environment, and where we are in the process.
A Regulation We Have Been Preparing For
The Regulation did not take us by surprise. We have been preparing for it for more than two years, following each step of its development and taking part in the workshops ESMA has held for the industry along the way.
That preparation runs deeper than paperwork. Long before the Regulation existed, SESAMm was built on a simple conviction: an ESG signal should be traceable to its source and explainable in its method. We monitor ESG controversies in real time across millions of public and private companies, and the discipline required to do that at scale, and to stand behind every score, is exactly the discipline a regime built on transparency now asks of every provider.
An Active Voice in the Ecosystem
We have not watched this Regulation from the sidelines. SESAMm is a member of EASRA, the European association of ESG rating providers, where our CEO, Sylvain Forté, serves as Vice-Chair. He also sits on the Sustainable Finance Commission of the AMF, the French financial markets authority.
We have engaged directly with ESMA as part of our preparation for the Regulation. A good regulation is built through dialogue between supervisors and practitioners, and we have been a constructive part of that conversation, contributing the perspective of a technology-led provider working at global scale.
Transparency and Independence, Built In
The heart of the Regulation is transparency, and that is where our longest-standing investment sits.
Our full rating methodology is now public and free to access at sesamm.com/methodology, with disclosures provided at the level of our rating product. It sets out what our Controversy Exposure Score measures, the data behind it, how severity is assessed, where AI does the work, and where our analysts validate it.
That combination is deliberate. AI gives us the scale to read millions of documents a day. Our analysts give the system its rigor, defining the methodology, running quality assurance and validating the data every day. Changes to the methodology are backtested against an extensive historical database of controversy events before they ever reach a client.
Independence is part of the same design. Our scoring logic is applied by rule, consistently across every entity, and is not adjusted for any individual company. That is a structural choice, and it is one of the reasons the market can read a SESAMm score as an opinion formed by method rather than by negotiation.
Where We Are in the Process
Under the Regulation's transitional arrangements, providers that notify ESMA of their intention to seek authorization may continue to operate while their application is assessed. Having given that notification on 2 July 2026, SESAMm will file its full application within the window the Regulation sets, and our service continues without interruption.
We want to be precise about status. Authorization is a process, and it is underway. We are not describing a completed outcome, and we will inform our clients and partners as the process reaches its conclusion. What we can say today is that we have done the work to approach it from a position of readiness rather than from a standing start.
What This Means for Our Clients
For the institutions that rely on our data, the direction of travel is clear and positive. The Regulation raises the bar for the whole market on transparency, governance and independence, and it turns those qualities into something a provider must show rather than simply assert.
Those are the principles SESAMm has been building on for years. We are glad the market is moving toward a standard we have long believed in, and we intend to keep playing our part in getting it there.
To read our full methodology, visit sesamm.com/methodology. To discuss what the Regulation means for your ESG data, get in touch with our team.
.avif)
.png)