Financial Reporting Council (FRC) on effective stewardship reporting

Financial Reporting Council (FRC) on effective stewardship reporting: "The UK Stewardship Code rightly sets a high standard for investor stewardship. At the same time, the FRC recognises that signatories will have different approaches to fulfilling their responsibilities. The purpose of stewardship reporting is for investors to demonstrate how they are protecting the hard-earned pensions and savings entrusted to them, by ensuring that they are managed responsibly, creating long-term value for their clients and beneficiaries.

The FRC published the first list of signatories in September. We received 189 reports and assessed 125 applicants as successful. This represents £20 trillion of assets under management across a range of asset classes and markets. We have received over 100 applications for our October deadline – significantly more than we expected. This demonstrates the growing importance and attention paid to stewardship issues – particularly by clients and beneficiaries.

We are now assessing the recent applications and will announce the successful applicants in the first quarter of 2022. Today’s publication, Effective Stewardship Reporting identifies good examples of reporting and areas where we wish to see improvement next year. We saw some good reporting on governance, resourcing, the integration of stewardship with investment and on stewardship activities.

We would like to see improvements to reporting on how signatories are managing market-wide and systemic risks as well as their approach to stewardship in asset classes other than listed equities. As the FRC transitions to the Audit, Reporting and Governance Authority (ARGA), both the #Stewardship Code and the Corporate #Governance Code remain key to maintaining trust and integrity in how UK companies are led and run, and enhancing the UK’s position as a destination for longterm, sustainable investment, bringing wider benefits for the economy, the environment and society. Demonstrating effective stewardship and governance builds the trust that is necessary to continue to attract investment in the UK and improve access to capital."