UK’s FRC proposes to amend definition of stewardship in Stewardship Code

Written by Adam Cadle

11/11/2024

The UK’s Financial Reporting Council (FRC) is proposing to amend the definition of stewardship in the launch of its Stewardship Code Consultation today.

The FRC said the definition should be amended to “support more transparent conversations between actors in the investment chain about their investment beliefs and objectives, while being sufficiently broad to be applicable to signatories across the investment chain and different asset classes”.

Responding to the proposed amendment, ShareAction head of UK policy, Fergus Moffatt, said the FRC should “stick to its original” definition, which “makes clear reference to the fact investors have a role to play in addressing these interrelated challenges, placing climate change and social impacts at the heart of effective stewardship”.

He added: “Long and frequent heatwaves, more intense storms and flooding, and even freezing winters are all signs of how global warming is affecting our country. At the same time, economic uncertainty, job insecurity and regional inequality are putting ever increasing strains on our social fabric.

"As the impact of these challenges on our lives become more apparent every day, one of UK’s most important regulators is concerningly suggesting that the definition of stewardship in the Stewardship Code be amended to remove explicit references to social and environmental outcomes. The Stewardship Code sets high standards for those investing money on behalf of UK savers and pensioners and those who support them. It’s designed to make sure investors are safeguarding the interests of these savers and asset owners through the influence they have over the companies they invest in.”

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