Japan will soon be the first country to issue guidelines for ESG data and ratings providers as global regulators step up scrutiny of firms that measure companies on their environmental, social and governance practices.

The Financial Services Agency (FSA) is finalizing its draft code of conduct this month after receiving industry feedback, the regulator said. The draft guidelines, first published in July, outline voluntary principles to ensure the quality of the data and processes backing these ratings.

"We hope that the code of conduct will improve the transparency and fairness of ESG data and assessment services, as well as the development of the ESG market,” Hideki Takada, director for strategy development at the FSA, said in an interview.