UK reporting regulator delists two stewardship code signatories

ISS makes it back on the list but the FRC removes NatWest pension scheme and J O Hambro; Claudia Chapman replacement announced.

The UK’s Financial Reporting Council (FRC) has delisted NatWest Bank’s pension scheme and J O Hambro Capital Management in the latest round of applications for its stewardship code, as it adds a record number of signatories.

The reporting regulator included 27 new signatories in the list, alongside 164 successful reapplications. The new names include Phoenix Group, Canada Life and Aegon UK, five local government pension schemes, and the BP Pension Fund.

Sindhu Krishna, head of sustainable investment at Phoenix, said the group was “incredibly proud” to become a signatory.

“We note the crucial role played by our asset management partners in our stewardship journey,” she continued. “Our managers are at the forefront of the dialogue with invested companies and we encourage them to embrace a holistic view of stewardship as an integral part of the investment process.”

Hilkka Komulainen, head of responsible investment at Aegon UK, said that all asset owners have a responsibility to be good stewards of the world we live in, and that becoming a signatory would help the firm embed responsible investing into its investment practices more effectively.

ISS has also rejoined the list, having been rejected in the previous round, as have Ardea Asset Management and Atlas Infrastructure.

Private equity giant Partners Group and private manager IFM Investors both became signatories for the first time. The FRC said in a statement that it was “pleased” to see continued growth in assets aside from listed equity covered by the code.

However, the NatWest Group Pension Scheme and J O Hambro Capital Management do not appear on the new list. Institutions can be delisted if the quality of their reporting falls and they fail to take FRC feedback into account, or if they choose not to reapply.

After publication, a spokesperson for NatWest told Responsible Investor it had chosen not to re-apply as it no longer holds listed equities.

A spokesperson for J O Hambro said its application had been unsuccessful. “We have received constructive feedback from the FRC that we believe we can implement within our reporting and after this we are planning to reapply,” they added.

“Should this be successful we will be added to the list of signatories as we were in 2021 and 2022. We remain committed to being active and engaged shareholders in order to meet the requirements of our clients.”

Several larger institutions also dropped out due to takeovers and acquisitions. BMO Global Asset Management is no longer listed, having sold its EMEA business to Columbia Threadneedle, while BlueBay lost its individual membership after being consolidated into the RBC Global Asset Management report.

In order to remain signatories to the voluntary code, institutions must submit their stewardship reports in one of two annual application windows. Membership is open to asset owners, asset managers and service providers.

Stewardship appointment

The FRC also announced the appointment of Andrea Tweedie as its new head of stewardship.

Tweedie, who was until recently stewardship senior manager at the FRC, replaces Claudia Chapman, who left earlier this year for an as yet unnamed asset manager. Tweedie has been acting head of stewardship and had covered for Chapman while the latter was on secondment to the Financial Conduct Authority.

Chapman’s departure comes as the UK government prepares to launch a review of the regulatory framework for stewardship, including the FRC Stewardship Code.

The government’s revised green finance strategy set out plans to start a review in Q4 on a series of topics including non-equity stewardship, aligning expectations and the need for common definitions. Depending on the outcome of the review, and evidence it has solicited beforehand, the government hinted that “further action to ensure the effectiveness of the stewardship regulatory framework” may be necessary.