Twenty-five out of 28 asset owners that applied to become a first wave signatory of the UK’s revised Stewardship Code have made the cut, according to an announcement from the Financial Reporting Council (FRC) today.

The majority of the asset owners that have been accepted as signatories are pension investors comprising both individual pension funds, largely defined benefit schemes, and local authority pension asset pools.

The asset owner success rate is much higher than that for asset managers, with some 88 out of 147 applicants having been judged to meet the required standard. This represents £20trn (€23trn) in assets under management.

Taking into account service providers two-thirds of applicant organisations made it onto the signatory list.

The next deadline for applying is 31 October 2021, although organisations may want to target a 30 April 2022 deadline as the FRC will provide more information about its expectations when it publishes a first annual reporting review in November.

Finalised in 2019, the new Stewardship Code places greater emphasis on providing evidence by reporting on stewardship activities and outcomes, as distinct from policy statements and a description of process.

The FRC said the successful applicants “better demonstrated their commitment to stewardship”. It flagged reporting on asset classes other than listed equity as a positive.

It said that organisations that did not make the list commonly did not address all of the code’s 12 principles or did not sufficiently evidence their approach, “instead relying too heavily on policy statements”.

“Other areas of weakness included reporting on the approaches to review and assurance, and monitoring service providers,” the regulator added. “We would also like to see more focus on identifying areas for improvement.”

In a recent podcast, Claudia Chapman, head of stewardship at the FRC, described some submissions as not having “a lot of depth”, and that applications could also sometimes feature “a lot of teaching about responsible investment without actually evidencing what that applicant had done themselves”.

RPMI Railpen is one of the new Stewardship Code asset owner signatories, with Caroline Escott, senior investment manager, saying she was “genuinely thrilled”.

“We worked hard to tell the story of why stewardship matters to us, how we do it and the important role it plays in securing our members’ future,” she wrote on LinkedIn.

“This was only possible with the support not just from the full Sustainable Ownership team but also of many others across Railpen.”

Brunel Pension Partnership, LGPS Central and London CIV are the three local authority asset pools to have become first wave signatories. Brunel positioned itself as an early mover with regard to stewardship code reporting, having published its first annual responsible investment and stewardship outcomes report last year.

The full list of first wave signatories can be found here.

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