What is it?
Launched by the Financial Reporting Council (FRC), it’s a set of standards aimed at UK institutional investors. The code focuses on the responsible allocation, management and oversight of capital, with the goal of creating sustainable benefits for the economy, environment and society.
How we work together
The UK Stewardship Code guides the way we manage wealth, ensuring that our actions can deliver sustainable benefits to our clients and society. We publish our compliance statement to the code which sets out all the ways we act as a proper steward. This ranges from voting and engaging with the companies we invest in, to correctly managing conflicts of interest and incorporating ESG factors into our investment decisions. By achieving the highest possible rank (tier 1) from the FRC at their last review in September 2017, we’ve shown that we understand our duty towards our clients, the environment and society.
What it’s achieved
Here are three examples of what the UK Stewardship Code has achieved since its launch:
- By January 2019, there were 280 signatories to the 2012 code.
- The code has been part of a movement to encourage investors to come together to engage with the companies they invest in. According to a 2018 survey by The Investment Association, three-quarters of investors had worked together when engaging with companies.
- To improve reporting standards, the FRC introduced a tiering system for signatories in 2016 based on the quality of their code statements. The organisation continues to assess the overall quality of reporting every year.
“The UK Stewardship Code sets the golden standard for asset managers as stewards of their clients’ assets. We have been awarded the highest possible rank for our UK stewardship statement, but we know that the work doesn’t stop there.”
- Karen Ermel, Responsible Investing Manager, Coutts
 Financial Reporting Council, Proposed Revision to the UK Stewardship Code, January 2019 https://www.frc.org.uk/getattachment/dff25bf9-998e-44f6-a699-a697d932da60/-;.aspx
 The Investment Association, Stewardship in practice, November 2018 https://www.theia.org/sites/default/files/2019-04/Stewardship_survey2018_FINAL_3.pdf
“The FRC will be holding signatories to account by regular review of adoption of the code and the quality of the reporting against its principles. Asset owners and beneficiaries will then be able to see if those investing on their behalf are doing so in accordance with their needs and views. They will also be able to see the impact of their managers’ decisions, particularly in relation to environmental, social and governance issues, including climate change.”
- Sir Jon Thompson, Chief Executive, FRC
More about the UK Stewardship Code
A revised edition of the 2012 Code was introduced on 1 January 2020, which has an even greater focus on sustainable and responsible investment.
The code is a key part of the UK’s broader corporate governance framework, which began with a new Corporate Governance Code in 2019. That code promotes the importance of establishing a corporate culture that is aligned with the company purpose and business strategy, promotes integrity and values diversity.