The Financial Reporting Council’s revised voluntary Stewardship Code will replace the existing 2012 Code for reporting years starting on or after 1 Jan 2020. Pension scheme trustees should consider if they want to be signatories or how they could incorporate its principles.
The revised code follows a 2019 consultation, different corporate governance reviews, and an increasing focus on environmental, social and governance factors of concern to investors and regulators. It applies to a much broader range of asset classes (not just equities) and sets substantially higher expectations for investor stewardship policy and practice than the minimum UK regulatory requirements.
The code comprises a series of “apply and explain” principles that apply to asset managers, asset owners, and to service providers. Signatories are subject to associated reporting requirements.