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As part of the growing effort to combat greenwashing, the Financial Conduct Authority (FCA) is launching an industry group to develop a code of conduct for providers of ESG data and ratings.

The U.K. regulator tapped the International Capital Market Association (ICMA), an industry trade group, along with the International Regulatory Strategy Group (IRSG), to form the secretariat that will lead the work to craft a voluntary industry code of conduct.

The secretariat will, in turn, form an independent group — including investors, ratings providers and rated issuers — to draft the code.

That group, which will be co-chaired by Moody’s Investors Service, London Stock Exchange Group, asset manager M&G, and law firm Slaughter and May, will meet for the first time next month to start its work.

“As financial services firms integrate ESG into their activities and expand their ESG-focused products, they are increasingly reliant on third party ESG data and ratings services,” the FCA said, adding that an industry-led code of conduct will help develop best practices in this area.

“The code will seek to be internationally consistent, by taking into account not only [the International Organization of Securities Commissions]’s recommendations but also developments in jurisdictions such as Japan and the EU. This will help encourage the development of consistent global standards,” the FCA said.

“This future code supported by the FCA will be a significant step in the development of consistent global standards for ESG data and ratings providers,” said Nicholas Pfaff, deputy CEO of ICMA and head of sustainable finance, in a release.

The regulator also said that it favoured regulatory oversight of certain ESG data and ratings providers.

“This would support greater transparency and trust in the market for ESG data and ratings services,” it said, adding that it is awaiting a government decision on whether to expand the FCA’s mandate to include oversight of ESG data and ratings.