Dimensional UK Approved As Signatory to UK Stewardship Code 2020
On 6 September 2021, Dimensional Fund Advisors Ltd ("Dimensional UK") was listed by the Financial Reporting Council (FRC) as a signatory to the UK Stewardship Code 2020.1
The FRC describes the UK Stewardship Code as setting “high stewardship standards for those investing money on behalf of UK savers and pensioners, and those that support them. Stewardship is the responsible allocation, management and oversight of capital to create long-term value for clients and beneficiaries leading to sustainable benefits for the economy, the environment and society”2
The UK Stewardship Code 2012 required that applicants for signatory status submit for assessment to the FRC a policy statement stating how they adhere to the Code. In October 2019, a substantially revised and strengthened UK Stewardship Code was published and took effect on 1 January 2020. The revised version is a set of 12 ‘apply and explain’ Principles; applicants for signatory status are required to submit an annual Stewardship Report that demonstrates how they have applied the Principles over the preceding 12 months, reporting on activities undertaken and outcomes achieved. The 12 Principles cover many aspects of effective stewardship such as: Purpose, Strategy and Culture; Stewardship, Investment and ESG Integration and Exercising Rights and Responsibilities. The Code now covers all asset classes globally and asks managers to demonstrate their effectiveness as a fiduciary and their consideration of material ESG issues in investment decision making, among other new requirements.
While the old Code had nearly 300 approved signatories, only 125 were approved under the new Code. Following a rigorous review process, more than a third of asset manager applications were rejected.3
“Dimensional is committed to being a trustworthy, transparent, and a reliable fiduciary for our clients. The new UK Stewardship Code was a welcome opportunity to demonstrate that our commitment to stewardship is not restricted to just engagement and voting but permeates activities across the entire firm” said Nathan Lacaze, Co-Chief Executive Officer (EMEA).
Dimensional’s Stewardship Report is publicly available here.
1This announcement concerns Dimensional Fund Advisors Ltd. Dimensional Ireland Limited and other subsidiaries of Dimensional are not signatories to the UK Stewardship Code.
2UK Stewardship Code, Financial Reporting Council.
3FRC lists successful signatories to the UK Stewardship Code, Financial Reporting Council, 6 September 2021.