EU ESG Ratings Supervisory Fees: A Technical Overview of the Draft Delegated Regulation

Introduction: Why ESG ratings supervision now matters

Environmental, Social and Governance (ESG) ratings have become a structural component of EU capital markets. They influence investment decisions, portfolio construction, sustainability disclosures, and risk management across the financial system. As their market relevance has grown, so too has regulatory concern around methodological opacity, conflicts of interest, and uneven supervisory practices.

To address these concerns, the European Union adopted Regulation (EU) 2024/3005 on the transparency and integrity of ESG rating activities. That Regulation establishes a harmonised supervisory framework under the authority of the European Securities and Markets Authority (ESMA). A necessary corollary of this framework is a clear, predictable, and proportionate fee system to fund ESMA’s supervisory tasks.

The European Commission has now published a draft Commission Delegated Regulation specifying how supervisory, authorisation, recognition, and registration fees for ESG rating providers will be calculated and charged. This article provides a structured, technical explanation of that draft act and its implications for ESG rating providers operating in or accessing the EU market.

Legal basis and policy context

The draft Delegated Regulation supplements Article 42 of Regulation (EU) 2024/3005, which requires that ESMA charge fees that fully cover the cost of supervision, that those fees be proportionate to the size and regulatory footprint of the ESG rating provider, and that national competent authorities be reimbursed where they assist ESMA or perform delegated tasks.

The draft act operationalises these principles by defining the types of fees, their amounts, payment timing and modalities, and the allocation methodology, notably the use of turnover-based calculations. Importantly, the Delegated Regulation does not expand ESMA’s supervisory powers. Its role is financial and procedural, ensuring that the supervisory framework is sustainable, legally certain, and consistent with other EU supervisory regimes.

Scope of application

The fee framework applies to all ESG rating providers falling within the scope of Regulation (EU) 2024/3005. This includes ESG rating providers established in the Union seeking authorisation, third-country ESG rating providers operating in the EU through equivalence, recognition, or registration, and small or micro ESG rating providers benefiting from the temporary lighter regime introduced by Article 5 of the Regulation.

Each category of provider is subject to a differentiated fee structure reflecting the intensity and complexity of the supervisory tasks required.

Core principle: full cost recovery by ESMA

A central feature of the draft Delegated Regulation is the principle of full cost recovery. Fees charged to ESG rating providers are intended to cover ESMA’s direct supervisory costs, an appropriate share of ESMA’s fixed and variable overheads, and the reimbursement of national competent authorities for tasks delegated or assistance provided.

This approach aligns with established EU practice in other supervisory areas, such as credit rating agencies and market infrastructures, and ensures that ESG supervision is financed by the supervised sector rather than the general EU budget .

Turnover as the basis forfee allocation

Annual supervisory fees are calculated using the concept of “applicable turnover.” Applicable turnover corresponds to revenues generated from ESG rating activities as reported in audited accounts. To ensure data reliability and consistency with ESMA’s budget cycle, the relevant financial year is set two years prior to the year in which fees are charged.

Where a provider has not operated for the full reference year, ESMA may extrapolate revenues. Where audited accounts for that year are unavailable, more recent audited accounts may be used. Revenues reported in non-euro currencies must be converted using European Central Bank reference exchange rates.

Annual supervisory fees

Annual supervisory fees apply to authorised and registered ESG rating providers established in the Union, as well as to recognised ESG rating providers established outside the Union. These fees are calculated proportionally based on the provider’s applicable turnover relative to the total turnover of all supervised entities.

For third-country ESG rating providers operating in the Union under the equivalence regime, the draft Regulation introduces a fixed annual supervisory fee of EUR 6,000. This reflects the comparatively lower supervisory burden associated with equivalence-based access.

Annual supervisory fees are payable in a single instalment by the end of March of the relevant year and are non-refundable. In the year of initial authorisation, recognition, or registration, the fee is calculated on a pro-rata basis, except where the relevant decision occurs in December.

Authorisation fees for EU-Based providers

EU-established ESG rating providers applying for authorisation are required to pay a one-off authorisation fee. The standard authorisation fee is set at EUR 40,000. Small ESG rating providers transitioning out of the temporary regime are subject to a reduced authorisation fee of EUR 30,000.

Additional fees apply where an application involves increased complexity. Providers seeking to endorse ESG ratings or to rely on outsourcing arrangements must pay an additional EUR 5,000 per request. These surcharges reflect the additional supervisory assessment required for such organisational structures.

Authorisation fees are payable within 30 days of the issuance of ESMA’s debit note and are not reimbursed if the application is withdrawn.

Registration and recognition fees for third-country providers

The draft Delegated Regulation differentiates clearly between equivalence-based registration and recognition for third-country ESG rating providers. Providers applying under the equivalence regime must pay a fixed registration fee of EUR 10,000. This lower amount reflects the fact that equivalence relies heavily on third-country supervisory frameworks.

By contrast, recognition involves a supervisory assessment comparable in depth to EU authorisation. Accordingly, the recognition fee is set at EUR 40,000. Recognition fees are payable upon application and are not refundable if the application is withdrawn before ESMA reaches a decision.

Fees for small and micro ESG rating providers

The draft act places strong emphasis on proportionality for smaller market participants. Small ESG rating providers benefiting from the Article 5 temporary regime are required to pay a fixed registration fee of EUR 5,000. During the temporary regime, their annual supervisory fees are capped at 2% of applicable turnover.

Micro ESG rating providers, as defined under Directive 2013/34/EU, are fully exempt from annual supervisory fees for the duration of the temporary regime. These measures are designed to avoid discouraging market entry and to support innovation in ESG analytics.

Exclusive fee-charging competence of ESMA

The Delegated Regulation clarifies that only ESMA may charge fees to ESG rating providers. National competent authorities are prohibited from charging fees directly, even when they perform tasks delegated by ESMA.

Where national authorities incur costs as a result of delegated tasks or assistance provided to ESMA, they are reimbursed strictly on the basis of actual costs incurred. This ensures neutrality and prevents both profit-making and losses at national level .

Entry into force and legal status

Once adopted, the Delegated Regulation will enter into force twenty days after its publication in the Official Journal of the European Union and will be directly applicable in all Member States. Until adoption, the document remains a draft and does not represent the final or binding position of the European Commission.

Download the Draft Delegated Regulation

The full draft Commission Delegated Regulation supplementing Regulation (EU) 2024/3005 with regard to fees charged by ESMA to ESG rating providers can be downloaded here:

Draft Delegated Regulation (EU) – Fees charged by ESMA to ESG rating providers (PDF)

For background and consultation context, see the European Commission initiative page: European Commission – Have your say.