Our Response to the UK Stewardship Code Consultation 

Since its introduction in 2010, the UK Stewardship Code has undergone several revisions, with the most recent being interim changes in July 2024. These evolving versions and guidelines have raised important questions for years regarding their consequences for signatories and actors in general.

Two significant focuses have been reducing the reporting burden for signatories, particularly in areas where information is relatively static and revising the core definition of Stewardship.

WeeFin holds years of experience collaborating with the largest financial players and analysing market practices, allowing them to actively engage in stewardship discussions. They support the sustainability efforts of financial institutions through their commitment to innovation, transparency, and responsibility and many of WeeFin’s clients are signatories to the UK Stewardship Code. WeeFin has also successfully integrated an Active Ownership Module into its ESG SaaS platform.

WeeFin is witnessing all the various challenges faced by financial clients and data providers, making them well-positioned to understand the implications of revising such a significant framework and how to best support actors in navigating these changes. With this unique perspective, WeeFin is able to engage in stewardship-related conversations, including responding to this current consultation.

What is the consultation about?  

Since the 2020 UK Stewardship Code, the Financial Reporting Council (FRC) has been analysing and reviewing reporting against this last version. The FRC has now committed to review the Code to ensure that it continues to promote effective stewardship by encouraging high-quality disclosures, accurately reflecting evolving stewardship practices, and preserving its global reputation. 

Thanks to an FRC’s 11-week-long consultation made up of 9 settled questions to be submitted by Wednesday 19 February 2025, industry stakeholders were able to comment on the definition of stewardship, the Principles’ streamlining and the reporting burden, amongst other related topics.

Our proposal 

Two key and pressing questions regarding the definition of Stewardship and reporting burdens have been widely discussed by industry actors in the recent years. WeeFin supports a change in the definition of Stewardship and advocates for updating policies and contextual information only every three years (or in case of significant changes), while publishing activities and outcomes on an annual basis. The forthcoming evolution should indeed enable institutions to adopt and implement a long-term vision effectively. 

WeeFin is keenly aware of the challenges posed by reporting burdens, particularly given the increasing number of regulations and compliance requirements. 

This proposal then outlines WeeFin's perspective and approach to addressing these issues and supporting financial institutions towards adapting to the evolving landscape.

A change of definition testifying that there is no single vision of sustainability

WeeFin stands in favour of a change of definition considering that:

• The UK Stewardship Code must position itself as a cornerstone between different actors (geographical areas, types of actors – AO/AM, stakeholders – NGOs, retailers, institutional investors – managerial, ESG, risk functions). There is no unique vision of sustainability, but a common foundation is needed on which actors can rely to build a methodology aligned with their values and ambitions; 

• The common foundation is sustainability. Therefore, it is important to maintain this word in the definition and specify that it aims to create long-term value for clients according to the fiduciary duty principle, especially when the misleading mention of “sustainable benefits” pushes for a more short-term view. 

• Sustainable value creation can only be effective if the principle of double materiality is integrated by financial companies. This principle has been recognised by multiple stakeholders such as the UKSIF and institutional investors who have emphasised the need to consider the impacts of investments. By incorporating this concept in its definition, the UK Stewardship Code would be a catalyst of greater transparency, both on the risks and the impacts of investment strategies. 

Freezing commitments does not constitute a threat when actors are committed for the long term 

Allowing signatories to report less frequently on Policy & Context information allows them to dedicate time and resources (human and technical) to the development and application of robust sustainable strategies. This system is already applied as part of other regulations such as the SFDR in Europe, SDR in the UK, as well as the Principles for Responsible Investment (PRI). 

However, if there is a deterioration in commitment, then it must be formalised, and actors need strict guidelines on what they must include. They need specific guidelines by the regulator on what can be considered minor or significant amendments. 

Regarding Activities and Outcomes: maintaining an annual report helps build trust with investors and fight against greenwashing. In order to ensure the credibility of the commitments made, quantifiable data must be reported. By having clear, quantifiable metrics, financial actors and more broadly companies can be held accountable for their stewardship practices. For that to be effectively done, it is important to provide financial institutions with technical tools that do not add an extra burden for them, and address their pain points and challenges when it comes to active ownership. 

A platform like WeeFin systematises the measurement, allowing for tracking, monitoring, and more advanced engagement campaigns.

Other adaptations within the Code

We believe brief prompts create consistency in reporting practices across the sector and are then necessary to enforce a plan. It could guide actors in adopting best practices for stewardship, including transparency and accountability. On a more quantitative side, having minimum standards would enable easy comparison of homogeneous elements.  

We agree on the fact that a one-size-fits-all approach may not be suitable for all investment types. The updated Code should better support signatories’ disclosures about their stewardship across asset classes. Moreover, it does make sense to adapt the principles differently for Asset Owners and Asset managers reflecting their activities and complexities.

Scattering Escalation and Collaboration Principles can only be efficient if processes are clearly formalised, both in theory within the Policy and Context disclosures, and in practice within the Activities & Outcomes scope.  

Finally, cross-referencing has always been incorporated into our organisation’s vision to mitigate greenwashing risk. The Code would benefit from other information contained in different documents, allowing to reduce the burden associated with reporting production. Clear examples of cross-referencing could be given by the FRC. 

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Conclusion

In short, these discussions are pivotal as they shape the future of stewardship practices and support institutions in adapting to an increasingly complex regulatory environment. 

WeeFin has built a strong expertise in financial markets and actively participates in these discussions, firmly believing that revising the definition of Stewardship is essential, reflecting a broader, more inclusive understanding of sustainability. 

Ultimately, the ongoing evolution of the UK Stewardship Code must strike a balance between reducing reporting burdens and maintaining the integrity of stewardship practices. For this revision to be efficient, clear guidance is expected whilst ensuring thorough pedagogy and training support. 

To read our full response to the consultation, click here