Article 11 1

(a)

the ESG rating provider established in the Union has applied to ESMA for authorisation of such endorsement;

(b)

the ESG rating provider established in the Union fulfils the following indicators of minimum substance:

(c)

the endorsement of the ESG rating does not impair the quality of the assessment of the rated item, or the issuer of a rated item, or the arrangement of on-site reviews or visits, where provided for in the ESG rating methodology used by the ESG rating provider established outside the Union;

(d)

the ESG rating provider established in the Union has verified and is able to demonstrate on an ongoing basis to ESMA that the issuance and distribution of endorsed ESG ratings fulfils requirements which are at least as stringent as the requirements of this Regulation; the ESG rating provider established in the Union shall be permitted to demonstrate compliance with those requirements without being required to refer to the specific process followed for each individual rating;

(e)

the ESG rating provider established in the Union has the necessary expertise to effectively monitor the ESG ratings provided by the ESG rating provider established outside the Union, in order to manage any associated risks;

(f)

there is an objective reason why the ESG ratings need to be endorsed for their use in the Union, which can include factors such as the specificities of the ESG ratings, the need for proximity of the production of the ESG ratings to the issuer or to a specific economic reality, a particular industry, centres of excellence for sub-components of environmental, social and human rights, or governance factors, the availability of specific skills required for the production of the ESG ratings, the material availability of input data and the development of ESG ratings through the collaboration of global teams;

(g)

the ESG rating provider established in the Union provides ESMA at its request with all information necessary to enable ESMA to supervise compliance by the ESG rating provider established outside the Union, where relevant to the endorsed rating, with this Regulation on an ongoing basis;

(h)

where an ESG rating provider established outside the Union is subject to supervision, an appropriate cooperation arrangement is in place between ESMA and the competent authority of the third country where the ESG rating provider is established, to ensure an efficient exchange of information.