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UK stewardship code adds 74 new signatories

Some 74 new signatories have signed up to the UK’s stewardship code governing how investors hold companies to account, swelling the combined assets of fund managers under the standard to £33tn, from £21tn in September.

Major asset managers that are new to the list of signatories include State Street Global Advisors, Goldman Sachs, Morgan Stanley, Pimco, Schroders and T Rowe Price.

The Financial Reporting Council, the UK audit watchdog that sets the code, said it had received 105 applications after the latest round in September.

It has approved 74 of these, taking the total number of signatories to 199. It would not comment on the 31 that were not approved, although the fail rate is consistent with the previous cohort admitted in September.

In 2020, the FRC substantially reformed the code, which was launched in 2010, to impose stricter reporting requirements on investors that had signed up. Since its launch, it has been replicated in other jurisdictions and broadened to include new asset classes.

Signatories have to report on their stewardship activities and are reviewed annually by the FRC to remain on the list.

“Ultimately, what we want to see are concrete examples of stewardship activities and outcomes. Otherwise, its just a bland policy statement of intentions without application,” said Claudia Chapman at the FRC.

“We’re keen to narrow the gap between what is reported and what is done, and for the most part we are comfortable that those included on the list are doing what they say.”

Big fund managers who have not signed up include JPMorgan Asset Management, Credit Suisse and Allianz. JPMorgan and Credit Suisse did not respond to a request for comment. Allianz said it was “in the process of preparing for the application in April”.

BlackRock, Amundi, Vanguard, Franklin Templeton, DWS, Fundsmith, Man Group, Baillie Gifford, Abrdn and UBS are among those that have been members since last year. Pension groups including the Church of England Pensions Board, Scottish Widows, BT Pension Scheme and Nest are also signed up.

Stewardship is seen as a key component of investing according to environmental, social and governance principles. But while interest in aligning investment with these standards has increased sharply, critics say that some investors overstate their focus on sustainability in an effort to tap into the billions pouring into this part of the market.

Regulators in the US and Germany launched probes last year into allegations that DWS had misrepresented how it used ESG metrics in analysing companies in its investment portfolio.

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