Legal and Regulatory Arguments for Responsible Investing

Following Sir David Walker's review on the corporate governance of banks and other financial institutions in November 2009, the FRC launched the first Stewardship Code for institutional investors in July 2010. The purpose of the Code is to improve the quality of corporate governance through promoting better dialogue between shareholders and company boards, and more transparency about the way in which investors oversee the companies they own. Read UKSIF's comment on the launch of the UK Stewardship Code.

Investment Governance Group (IGG) is a joint industry and government forum. The group, established following a NAPF review and Government consultation into the Myners principles, will implement an industry-led framework for their application. 'Updating the Myners principles: a response to consultation' (PDF, 287.88 KB) sets out the UK government’s thinking on strengthening the Myners principles. The consultation led by NAPF looked at the extent to which: trustees were applying the Myners recommendations, scheme governance had improved, and whether key gaps had been addressed. NAPF published in January 2007 The Myners Principles, ‘Six Years On’ (PDF, 564.54 KB). The recommendations of the NAPF report were accepted by the government.

The UK Corporate Governance Code (PDF, 217.76 KB) formerly the Combined Code sets out standards of good practice in relation to board leadership and effectiveness, remuneration, accountability and relations with shareholders. The Code contains broad principles and more specific provisions. Listed companies are required to report on how they have applied the main principles, and either confirm that they have complied with the Code's provisions or where they have not provide an explanation. The Code has last been updated in June 2010. 

The SRI Pensions Disclosure regulation began 3 July 2000. It requires trustees of occupational pension schemes to disclose in their Statement of Investment Principles (SIP): “The extent (if at all) to which social, environmental or ethical (SEE) considerations are taken into account in the selection, retention and realisation of investments; and their policy (if any) in relation to the exercise of the right (including voting rights) attaching to investments.” (The 1999 amendments were superceded by 2005 amendments, the substantive text was unchanged).