TheThe new UK Stewardship Code took effect for reporting years beginning on or after 1 January 2020.  The new Code sets higher expectations for investor stewardship policy and practice and focuses on how effective stewardship delivers sustainable value for beneficiaries, the economy and society.  The Code now comprises 12 ‘apply and explain’ Principles for asset owners and asset managers, with reporting expectations relevant to their role. In addition, there are six, separate ‘apply and explain’ Principles for service providers with reporting expectations.

In order to support prospective signatories in meeting the higher expectations set by the Code, the FRC has published its 'Review of Early Reporting'.  The review analysed 21 responsible investment, active ownership and stewardship reports and looked at how well prospective signatories are addressing the higher standards set.  The review reiterates the expectations of effective stewardship, highlights what has been reported well, using examples to demonstrate a range of effective approaches, and highlights areas where reporting needs to improve.

The report consists of two parts;

• Part 1: In this part the FRC has expands on its expectations of reporting which apply to all the Principles and reporting expectations.  This part also discusses the FRC's observations on the structure and the use of evidence to support stated approaches.
• Part 2: In this part the FRC comments on the quality of reporting and its expectations for specific Principles. This part highlights good examples of reporting where they have been seen.

The review identified that there were good examples and case studies evidencing stewardship activity.  However few reports consistently demonstrated the application of all of the Principles or addressed all of the reporting expectations.  The FRC indicates that "for all the Principles, reporting needs to improve by reflecting on effectiveness of approach, demonstrating continuous improvement and disclosing outcomes".  It also highlights that "statements should be supported with specific evidence from the reporting period, and the rationale rather than just a general statement of approach".

The press release and Review of Early Reporting are available on the FRC website. 

On 8 October, the FRC published a recording of the Webinar: Stewardship Code Early Reporting Review held on 30 September 2020. Click here to view the webinar.

on he new UK Stewardship Code took effect for reporting years beginning on or after 1 January 2020. In order to support prospective signatories in meeting the higher expectations set by the Code, the FRC will publish a 'Review of Early Reporting'. The Review will detail the expectations for reporting, identify effective examples and highlight where reporting needs to improve. new UK Stewardship Code took effect for reporting years beginning on or after 1 January 2020. In order to support prospective signatories in meeting the higher expectations set by the Code, the FRC will publish a 'Review of Early Reporting'. The Review will detail the expectations for reporting, identify effective examples and highlight where reporting needs to improve.