Newsletter: January
Welcome to Canbury’s newsletter. This month, we cover insights into the FCA’s Sustainability Disclosure Requirements, as well as stewardship and TCFD reporting.
Scroll to learn more about our supply chain analysis, see a snapshot of our ‘use-of-proceeds’ tool and meet the team.
If you’d welcome a call on any of the content in our newsletter, please get in touch. Or if you find yourself in central London, do call in.
Many thanks,
Emmy Shaw
Canbury
FCA’s SDRs: How Do They Impact Me?
The Financial Conduct Authority’s Sustainability Disclosure Requirements are changing how UK-authorised investment firms report on sustainability. The SDRs are a set of rules aimed to improve the quality and consistency of sustainability disclosures, and are applicable to investment funds, ETFs, and other investment products that are marketed as sustainable. Ultimately, these new requirements are designed to help investors make informed investment decisions and to reduce greenwashing.
Read more about the SDRs here. For a full briefing, or how we can help with your SDR-related disclosures, get in touch.
Stewardship Reporting and UK Stewardship Code
The code is world-leading and we would recommend signatory status. We support clients prepare Stewardship Code reporting, please get in touch with us. Here are our recommendations:
Make sure each principle is fully answered. The FRC test quality of governance, process, disclosure and improvement – not sustainability. Include case-studies (even if anonymised). The more examples the better.
Demonstrate continuous improvement. What were you doing and how has that evolved. Read last year’s submission and explain the progress you’ve made. Explain your governance and how you have incorporated FRC feedback in this year’s submission.
Explain your stewardship activities. Explain how you consider multiple stewardship tools, such as engagement, collaboration, voting, shareholder resolutions, stakeholder engagement and participation, and policy engagement, and your approach to escalation, where companies (or assets) were unresponsive.
Explain how you think about your clients’ preferences and views on stewardship topics, how you engage your clients on stewardship decisions, and how you disclose your rationale for your stewardship decisions (your degree of transparency). Link to real-world outcomes.
The FRC has published reports and guides setting out best practice. If in doubt, contact the FRC. The team is knowledgeable, responsive and helpful.
Nature and Supply Chains
We have used our AI expertise to develop a transparent and novel approach to supply chain analysis. To find out more about our nature and supply chain analysis tools, get in touch.
TCFD Reporting
At its core, TCFD is a risk management governance framework. A TCFD report includes an assessment of climate-related risks and opportunities through scenario analysis and target setting.
FCA-regulated asset managers of over £50bn AuM have already submitted their first TCFD report. Those greater than £5bn AuM will submit their first reports by 30 June 2024 at both firm and product levels.Our approach to TCFD scenario analysis is flexible and can be highly bespoke or linked back to NGFS scenarios.
Get in touch if you’d like some advice on reporting or to learn more.
Our ‘Use-of-Proceeds’ (UoP) Tool
We’ve developed an assessment and engagement tool for investors to identify, prioritise and tailor their engagement across their UoP portfolios. To streamline the process of assessing UoPs, our tool automates engagement letters so that investors can request the disclosures they need. If you’re interested in learning more, get in touch.