Banking

FRC announces 125 ‘successful’ signatories to new UK Stewardship Code as one-third of applicants fail to make list

Among the asset managers that have not been listed as successful signatories to the new UK code, which sets standards of stewardship for those investing money on behalf of UK savers and pensioners, are Schroders and JP Morgan Asset Management.

The FRC received 189 applications from 147 asset managers, 28 asset owners, including pension funds and insurers, and 14 service providers, including data and information providers and investment consultants, and said that following a “rigorous review process” which took into consideration organisations’ investment styles, sizes and types, 125 were successful signatories.

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BlackRock, Baillie Gifford, Fidelity International, Legal & General Investment Management, Jupiter Fund Management, M&G Investments and Royal London Asset Management are among the asset management groups that have been named as signatories to the new Stewardship Code.

The successful applicants, representing £20trn of assets under management, “better demonstrated their commitment to stewardship”, according to the FRC, which also noted that it was “pleased to see investors better integrating stewardship, and environmental, social and governance (ESG) factors into their investment decision-making, reporting on asset classes other than listed equity and identifying the outcomes of their efforts”.

In addition, the organisation recognised there was “some strong reporting” on underpinning governance activities.

The most common reasons for organisations not making the list were that they did not address all the principles or “sufficiently evidence” their approach, the FRC said, “instead relying too heavily on policy statements”.

It also called for increased focus on identifying areas for improvement.

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Sir Jon Thompson, chief executive of the FRC, said: “Congratulations to all those who have become signatories to the UK Stewardship Code, which is recognised globally as a best-practice benchmark in investment stewardship.

“The publication of this list delivers on the recommendations of The Kingman Review in respect of stewardship and demonstrates our continued commitment to serve the public interest as we transform to becoming a new regulator.

“We are proud of our robust approach to assessment and encourage those who have been unsuccessful to reflect on our feedback and apply again in future.”

The next opportunities to apply are 31 October 2021 and 30 April 2022.

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