Stewardship Code and ESG

 Stewardship Code and ESG

  • Definition:
     A set of principles or guidelines for institutional investors and asset managers to actively monitor and engage with the companies they invest in to enhance long-term shareholder value.

  • Purpose:

    • Promote responsible investment.

    • Ensure investors consider long-term sustainability, governance, and ethical practices.

    • Strengthen accountability between investors and companies.

  • Key Objectives:

    • Encourage investors to engage with companies on strategy, risk, performance, and ESG (Environmental, Social, Governance) issues.

    • Promote transparency in investment practices.

    • Protect and create long-term value for beneficiaries.

  • Who it applies to:

    • Institutional investors like mutual funds, insurance companies, pension funds.

    • Asset managers and investment advisors.

  • Key Principles (common across countries like UK, India, Japan):

    • Public disclosure: Investors should disclose their policies and actions.

    • Active monitoring: Regularly review investee companies’ performance and governance.

    • Engagement: Constructively engage with companies on ESG and strategic matters.

    • Conflict management: Avoid or manage conflicts of interest responsibly.

    • Collaboration: Work with other investors when appropriate to achieve stewardship goals.

    • Reporting: Provide transparent reporting on engagement and outcomes.

  • Significance:

    • Encourages responsible capitalism.

    • Aligns investment with sustainable development and ethical governance.

    • Helps companies improve corporate governance and ESG performance.


#StewardshipCode #ResponsibleInvesting #CorporateGovernance #ESG #SustainableFinance #InvestorEngagement #LongTermValue #EthicalInvesting #AbhinandanWrites

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