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14 November 2024
Elizabeth Pfeuti
November 13th , 2024
The Financial Reporting Council (FRC) has launched a consultation on proposed updates to the UK Stewardship Code.
Running until 29 February 2025, the consultation should follow extensive engagement with over 1,500 stakeholders during the course of 2024, reflecting four years of analysis surrounding the 2020 code.
The FRC has been prompted by prominent levels of engagement running up to the consultation, that saw a focus on proposing long sustainable value for both beneficiaries and clients, when taking the right approach to reporting requirements.
The consultation additionally builds on interim measured announced in July 2024, that included the reduction of reporting requirements and providing a clearer outline for stewardship outcomes.
By hosting a series of engagement events, the FRC will gather direct feedback from stakeholders during this consultation period.
The updated code is expected to be available and published in 2025, for implementation and the first reporting cycle in 2026.
Key proposals of the consultation include several areas of focus. This includes a revised definition of stewardship, emphasising the creation of long-term sustainable value for beneficiaries and clients.
Streamlining the reporting process and separating policy and activity disclosures will also be addressed in the revision.
A set of targeted principles for distinct types of signatories and service providers will also be included, including new guidance to support effective implementation.
The proposal also outlines specific principles to be applied to by proxy advisors and investment consultants, aimed at supporting a clear reporting on how service providers support stewardship through the investment chain.
