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A review of the UK StewardshipCode 2020 should prompt evolution rather than revolution, according to industry experts, who want to see refinement aimed at further improving outcomes. But some have queried the extent of the code’s effectiveness so far.
“Two sides of the same coin” During the consultation on the UK Corporate Governance Code, stakeholders also raised concerns about the UK StewardshipCode, the FRC said in its statement. The UK StewardshipCode has over 250 signatories, including UK pension schemes Brunel Pension Partnership and Railpen.
Asset owner makes progress on climate and asset manager information-sharing in first year as StewardshipCode signatory. Last year, Phoenix also became a signatory of the Financial Reporting Council’s UK StewardshipCode. Piani described the code as being “pivotal” to the development of the firm’s engagement strategy. “It
Enhanced resourcing Maanch’s Engagement Tracker platform was launched in June 2022, initially developed in collaboration with Swiss private bank UBP to trace the impact of engagements over time and monitor escalations that can support investment decision-making. The code currently counts 289 signatories, collectively accounting for £50.3
The StewardshipCode says a measure of your engagement quality is case studies. Schroders ranked 21 out of 68 in ShareAction’s 2022 Voting Matters report. That is one way. Organisations such as UK-based NGO ShareAction do annual reports ranking how asset managers vote on ESG issues.
While one asset manager reported 5,312 engagement actions over 12 months, five others recorded 200 or fewer over the same period. F irms like rezonanz , launched earlier this year, aim to provide improved voting and engagement analytics for asset owners to bolster their stewardship efforts and improve visibility of asset managers’ activities.
“This is a significant hiring slowdown, perhaps indicating that stewardship and engagement is an area that managers are willing to cut as they face more challenging times financially,” the report mentioned.
Hodge told ESG Investor a vote of 20% or more against a resolution relating to director elections or remuneration occurred in only half of the cases where one or both of ISS or Glass Lewis had made such a recommendation in 2022, although this increased to 77% of cases when both did so.
PLSA) digital ESG Conference 2022. Trustees should exert their influence over asset managers and investee companies to ensure they are “walking the walk” in terms of adapting their business models to net zero objectives, she said, including encouraging managers to sign up to the UK StewardshipCode.
The pace has quickened further in 2022 in response to then Prime Minister Yoshihide Suga’s April 2021 announcement that by 2030 the country’s emissions would reduce by 46% relative to 2013 levels. Such high levels volumes in the ESG investment space partly reflect the lead taken by the country’s policymakers and financial regulators.
At a glance, the rising number of ESG-related shareholder proposals filed and backed by investors shows a growing appetite amongst asset owners to push systemic stewardship further and secure positive environmental and social outcomes. Transparency is improving, but slowly.
If you look at stewardshipcodes across the world, they touch on resources as being a key element, but without explicitly giving out guidance on how organisations can report and which resources are required,” Jessica Gao, Director of Research at the TAI, told ESG Investor. “The
The long-awaited strategy acknowledged that pension trustees would like further information and clarity on the “latitude” of their fiduciary duties in the context of the transition to net zero and broader stewardship activities. It confirmed the Department on Work and Pension’s (DWP) plans to examine the extent to which its 2022stewardship guidance (..)
The concept of assessing what effective stewardship should look like was first introduced by the FCA in 2019 in a joint effort with the Financial Reporting Council (FRC), setting the groundwork which helped define what the minimum expectations should be for financial services firms investing on behalf of clients and beneficiaries.
Research prepared by the Principles for Responsible Investment (PRI) shows that there are close to 900 policy tools or revisions that support responsible investors in 2022. Hardwiring sustainability into financial regulations is already on policymakers’ agenda. By comparison, in 2019, there were fewer than 600; and in 2013, 300.
As part of investors’ stewardship practices, engagement can, if well-executed, lead to positive results across the axes of risk, return and impact. Engagement to reduce risks: In a recent study by Hoepner et al (2022) , the authors analysed whether ESG engagements result in subsequent reductions in downside risk at portfolio firms.
The new guide highlighted that participation in collaborative stewardship initiatives increased from 68% in 2017 to 83% in 2020, with asset owners “particularly driving the change”. Continuing to evolve According to Bartek, the guide will be use d by a “range of entities ”, including signatories that have only recently joined the PRI.
To incentivise this and ensure harmonisation in reporting, uptake and provision of information by asset managers in the public register should be linked to other relevant regulatory expectations and industry initiatives, such as the UK StewardshipCode and the Institutional Investors Group on Climate Change Asset Owner Stewardship Questionnaire, she (..)
According to Morningstar data on US proxy voting, the number of shareholder resolutions on environmental and social topics opposed by management almost doubled to more than 250 in 2022, but barely 10% (27) gained majority support. Digging into the data.
Scanning across to the Financial Reporting Council’s UK StewardshipCode, the 2020 Code represents a mature governance regime for UK-listed businesses. It has its origins in 1992’s Cadbury report and code, which covers the financial aspects of corporate governance.
The NZIA has been treading carefully since similar issues were raised in Q1 2022, particularly when issuing its first non-binding target-setting protocol in January. Their action follows a letter on 15 May from state attorneys-general warning that members may be in breach of state and federal US law.
After a pension fund-led coalition laid out new expectations for managers on climate related-stewardship, there were signs of consensus among customer and supplier over the name of the game. Rival Rio Tinto has also been mulling a move , launching a review of its listing options under pressure from Palliser Capital.
The UKs Financial Conduct Authority (FCA) launched the Vote Reporting Group in 2022 to examine obstacles to information flows between asset managers to asset owners on how voting rights are exercised.
The country is also upping its game on stewardship, with New Zealand’s inaugural StewardshipCode launching last year with 17 signatories, says Simon O’Connor outgoing CEO of RIAA. “The Code was developed collaboratively by the industry and responds to our unique context in New Zealand,” he says.
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