This report examines the establishment of a Public EU Rating Agency dedicated to environmental and social sustainability and human rights. The proposed Agency would support sustainability reporting processes by developing standards, accrediting auditors, and serving as a centralized EU-level data hub. Through this mandate, it aims to enhance transparency and accountability across businesses and value chains. The Agency's mission would include facilitating implementation of key EU legislation such as the Green Deal, Climate Law, and major corporate sustainability instruments: CSRD, CSDDD, and NFRD. It would further guide compliance with sector-specific initiatives-Conflict Minerals, Battery, Deforestation, and Forced Labour regulations-as well as frameworks under the European Raw Materials Act. Beyond EU law, the Agency would help align business conduct with international benchmarks like the UN Guiding Principles on Business and Human Rights, OECD Guidelines, the MNE Declaration, and the ILO's core labour standards. Proposed as a Decentralized EU Agency rather than an Executive Agency, the new body would not manage EU programme funds but focus on ensuring consistent legal applica tion of due-diligence requirements throughout global value chains. Its internal-market remit precludes it from falling under foreign and security policy structures. Strategically, it would operate through national contact points, offering training and coordination rather than acting as a single contact interface for firms. Survey data collected from civil society, business, trade unions, public authorities, and academia reveals the following: 74% rated the Agency as moderately to highly useful. Respondents favored a hybrid governance model-central EU oversight complemented by national contact points-to ensure both coherence and local engagement (68%). Stakeholders also emphasized structured, multi-sectoral inclusion, with councils and umbrella bodies embedded in decision-making to safeguard transparency, accountability, and representation. Estimated initial setup costs stand at €10 million, with operational budgets of approximately €21.8 million in year one, rising to €41.3 million by year three. The 2025 Work Programme includes an omnibus simplification package amending CSRD, CSDDD, and related Taxonomy acts; it also proposes adjustments to the CBAM. If approved, attachment to an existing agency is to be considered. The European Union Agency for Fundamental Rights and the European Environment Agency are the two most relevant bodies.
