EthiFinance, ESG Book merge to build European ratings challenger

What's the deal? Sustainable finance ratings provider EthiFinanceDealroom has a profile for this one. Try Dealroom → and sustainability data firm ESG Book are merging to create one of Europe's largest independent credit and sustainability rating agencies. The combined company will operate under the EthiFinance brand, with more than 300 employees across Europe, the US, India, and Japan, serving over 500 clients and covering more than 10,000 issuers.

Who's who? Paris-based EthiFinance, launched in 2004, provides credit and sustainability ratings using a double materiality approach for investors, banks, insurers, and corporates. Frankfurt-based ESG Book, founded in 2018 as Arabesque S-Ray, runs a sustainability risk and compliance platform offering ESG and climate data, portfolio scores, and a proprietary SaaS disclosure tool.

What's the endgame? The two firms want to build a European rating "champion" as an alternative to US-based incumbents. Their combined offering will span ESG and credit ratings, sustainability and credit data, portfolio analytics, regulatory reporting, benchmarking, and supply chain risk management.

Why it matters? The companies say the deal fills a sustainable data gap in private markets and links financial and nonfinancial value drivers. "Europe needs a homegrown champion that combines local market knowledge and global capabilities," said ESG Book chief executive officer Justin Fitzpatrick.

In their words: "By combining our strengths, we have the best platform to meet the needs of financial institutions and corporate issuers in a fast-moving market," said EthiFinance chief executive officer Carol Sirou.

The signal: The merger reflects a push for European-owned financial infrastructure that can compete with dominant US ratings players, at a moment when investors are demanding harder data on materiality and sustainability risk.

Read more: ESG Today