Asset manager Schroders does not make it onto the best practice list
Asset managers are being scrutinized more closely by securities regulators around the world.

BlackRock (NYSE: BLK), Fidelity and M&G are among 125 companies recognized under the stricter UK code of best practice against "greenwashing" by asset managers. Schroders (LON: SDR) and 63 other companies did not make it onto the list, as the Financial Reporting Council announced on Monday. Asset managers are being scrutinized more closely by securities regulators around the world in order to prevent greenwashing, i.e. exaggerating the climate-friendly properties of their products for investors. The FRC tightened its ten-year-old stewardship code in 2020 to prevent "standard statements" about investment decisions that it believes say little about whether investors are getting value for their money. The code is enforced on a "comply or explain" basis, which means that companies must publicly explain why they are not applying it. The revised Code says that asset managers should not only take their actions when selecting investments, such as B. Meetings with companies or votes at annual meetings, but should also provide evidence of the results of these actions. As the UK seeks to promote London as a global center for sustainable investment, there is a strong emphasis on environmental, social and governance (ESG) factors when investing. The volume of money flowing into ESG products has increased significantly, raising concerns about greenwashing among regulators. All 300 asset managers who signed the old code had to submit a new application. The FRC said it had received 189 applications, with the inability to provide adequate evidence of the results being a primary reason why 64 firms failed to become signatories. The 125 signatories collectively administered £ 20 trillion ($ 27.7 trillion), while the grand total of all 189 applicants was £ 32 trillion. Several blue-chip companies including T. Rowe Price, Columbia Threadneedle, Northern Trust (NASDAQ: NTRS) Asset Management, Morgan Stanley (NYSE: MS) Investment Management, and Pimco are not among the signatories, but it's unclear whether they are all have applied. Allianz (DE: ALVG) Global Investors said it will apply next year and Columbia Threadneedle said it will apply in October. Some who haven't made it are expected to reapply in October or April next year because if they're not among the signatories it could raise awkward questions from customers. Schroders said it was frustrated not to be among the signatories and said the FRC's feedback attributed this to the format rather than the content of the submission. "We are confident that we will soon be one of the signatories again," said Schroders. T. Rowe Price and Morgan Stanley Investment Management made no comment. Pimco stated that it remains committed to the principles of stewardship and commitment, while Northern Trust Asset Management stated that it is working carefully with the FRC to demonstrate its longstanding commitment to responsible stewardship. The FRC stated that in order for organizations to remain signatories, they must continue to improve their reporting as market practices and expectations evolve.





