The Financial Conduct Authority (FCA) new proposals for regulating ESG ratings providers mark a quiet but significant shift in how UK financial services, including payments and e-money institutions ( PIs & EMIs) will be assessed, compared, and trusted. While PIs & EMIs aren’t the primary target, the ripple effect will absolutely reach this market.

What’s changing?

The FCA’s consultation on regulating ESG ratings will bring providers into the perimeter for the first time, with expectations around transparency, governance, methodology clarity, and conflicts management. Research shows the current market is inconsistent, opaque, and often misunderstood, leading to misaligned incentives and a lack of trust among users, issuers, and investors.

Why this matters for PIs & EMIs

1. Ratings will shape capital access and partnership decisions.
Investors and banks increasingly use ESG data when onboarding FinTechs or setting credit terms. A regulated, more reliable ratings market means your ESG score could soon influence everything from funding rounds to BIN sponsorships.

2. Operational resilience and governance will come under more ESG scrutiny. PIs & EMIs are already assessed by the FCA on governance, SM&CR culture, treatment of customers, and environmental impacts of operations. An ESG rating will spotlight issues the FCA already expects you to manage under PRIN, Consumer Duty and SYSC.

3. Data transparency becomes strategic, not “nice to have.” The FCA’s research shows users want clearer, more standardised data inputs and methodologies. If you want a strong rating, you’ll need reliable internal MI on workforce, risk culture, fraud losses, environmental footprint, supply chain ethics, and customer outcomes.

4. ESG becomes a competitive edge. For consumer facing payment brands, ESG credibility increasingly influences adoption and loyalty. A regulated ratings regime will offer assurance for newer firms, but quickly expose any weaknesses in governance or operational risk.

How forward thinking PIs & EMIs should respond

• Map your ESG story – Identify where your model naturally supports good ESG outcomes (e.g., financial inclusion, low carbon ops, fraud reduction).
• Make sure a NED on your board understands your ESG duties and story.
• Audit gaps – Governance, data quality, culture, diversity, anti-fraud, supplier ethics.
• Be ratings ready – Build an evidence pack, policies, KPIs, board minutes, assessments for a clear ESG narrative.
• Expect investor questions – Prepare for ESG metrics to feature in due diligence and partner risk assessments.

PIs & EMIs who embed ESG into strategic decisioning, instead of viewing it as a compliance burden, will be best placed to win investor, customer and wider confidence as the sector evolves.