Nine new pension funds sign up to UK Stewardship Code

The Financial Reporting Council published on September 7 an update to the list of signatories to the UK Stewardship Code following its spring 2022 assessment.

Following “an extensive review process which considered organisations’ investment styles, sizes and types”, 43 new signatories were added, the regulator said.

Among these are nine pension schemes, with the Essex Pension Fund, London Borough of Hillingdon Pension Fund, Northern Ireland Local Government Officers' Superannuation Committee, Superannuation Arrangements of the University of London, West Yorkshire Pension Fund and Wiltshire Pension Fund also joining the list.

The code, which sets high standards of stewardship for those investing money on behalf of UK savers and pensioners, now has 236 signatories with assets under management of £40.7tn, up from £33.3tn.

The FRC noted it was “also encouraging” that signatories reporting for their second year, after first applying in 2021, had “in most cases used the feedback they received to improve” their application.

The regulator saw improvements in several areas, “such as the quality of activity and outcome reporting for engagement, collaboration and escalation”.

It also noted advances in “contributions to addressing market-wide and systemic risks, and improving the functioning of the financial markets”, and in the “reporting on how signatories monitor and hold to account third parties, such as asset managers and service providers”.

However, the FRC stated: “There still needs to be greater emphasis by signatories on reporting their activities and outcomes during the reporting period, using both quantitative and qualitative evidence, as the FRC will increase focus on this area in future assessment updates.”

Mark Babington, executive director of regulatory standards at the FRC, noted that it is “great to see improvements in how organisations are evidencing their stewardship each year, and more tailored explanations on how they apply the code to demonstrate their stewardship activity and outcomes effectively”.  

He added: “Using our feedback to provide clear, comprehensive and outcome-based reporting is what the spirit of the code is all about and why it is considered the gold standard for stewardship across the globe.”