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Stewardship and Governance “Two Sides of the Same Coin” – FRC

Chris Hall

UK r egulator aims to address gaps in collaborative engagement in upcoming review of the Stewardship Code. We must avoid well-intentioned but meaningless disclosure and focus on what’s important.

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Lack of Resources Weakening Stewardship Efforts

Chris Hall

“The biggest gap that we typically find in our research is between rhetoric and reality [on stewardship],” he added. While one asset manager reported 5,312 engagement actions over a 12-month period, five others recorded 200 or fewer over the same period.

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A Step Forward for Stewardship

Chris Hall

“Asset owners in Germany and Belgium were basically following the asset managers’ lead on stewardship, as there is not much pressure applied on them to exert influence,” he said. “It The code is voluntary, but many institutional investors have signed up to it as a way of demonstrating their commitment to responsible investment.

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Japan’s GPIF Studying Stewardship Impact

Chris Hall

“It is crucial to examine whether GPIF’s activities can be connected to companies’ behavioural changes and higher ESG ratings.” As first outlined in GPIF’s ‘ Stewardship Activities Report ’ published in March, collaborative studies will run over the course of 2023 and 2024.

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“Clear Direction” on ESG in New Guidance for Australian Super Funds  

Chris Hall

AIST also said if APRA is encouraging disclosure of stewardship activity, it should provide guidance on the appropriate level of disclosure, noting, “better practice is likely to involve disclosure in line with an existing stewardship code”.

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Stewardship Dialogue Must be Ongoing – FCA

Chris Hall

Areas to be covered include the effectiveness of the FRC’s Stewardship Code in creating a market for stewardship, interaction between the code and existing stewardship-related rules in the FCA Handbook , and stewardship-related issues raised in the UK government’s updated Green Finance Strategy , released in March.

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Proxy Advisors Welcome FRC Analysis into Industry  

Chris Hall

In the final quarter of 2023, the FRC – working with the FCA, Department for Work and Pensions (DWP) and The Pensions Regulator – will review the regulatory framework for effective stewardship, including the operation of the Stewardship Code.