* BlackRock, Fidelity, M&G among 125 firms on revised list
* Schroders among 64 firms evicted from the list
* Changes come after regulator toughens reporting code
LONDON, Sept 6 (Reuters) - BlackRock, Fidelity and M&G are
among 125 firms endorsed under Britain's tougher best practice
code to stop "greenwashing" by asset managers, though Schroders
and 63 others failed to make the grade, the Financial Reporting
Council said on Monday.
Asset managers are under greater scrutiny from securities
regulators globally to prevent greenwashing, or exaggerating the
climate-friendly credentials of their products to investors.
The FRC beefed up its decade-old stewardship code in 2020 to
stop "boiler plate" statements about investment decision-making
that it said did little to show if investors were getting value
The code is enforced on a comply or explain basis, meaning
firms must say publicly why they are not applying it.
The revised code says asset managers should not only spell
out their actions in selecting investments, such as meetings
with companies or voting at annual meetings, but also provide
evidence on what the outcomes of those actions were.
As Britain seeks to promote London as a global centre for
sustainable investment, there is a strong emphasis on taking
environmental, social and governance (ESG) factors into account
The volume of money going into ESG products has risen
significantly, raising fears among regulators of greenwashing.
All 300 asset managers who were signatories to the old code
had to reapply. The FRC said it received 189 applications, with
an inability to provide proper evidence on outcomes a key reason
why 64 firms failed to become signatories.
The 125 signatories have a combined 20 trillion pounds
($27.7 trillion) under management, while the total for all 189
applicants was 32 trillion pounds.
NEXT TIME LUCKY?
Several blue-chip names, like T. Rowe Price, Columbia
Threadneedle, Northern Trust Asset Management, Morgan Stanley
Investment Management and Pimco, are not among the signatories,
but it is unclear if they all applied.
Allianz Global Investors said it will be applying next year,
and Columbia Threadneedle said it would be applying in October.
Some who failed to make the grade are also expected to
reapply in October, or April next year, after which not being
among the signatories could raise awkward questions from
Schroders said it was frustrated not to be a signatory,
saying FRC feedback had put this down to the format rather than
the substance of its submission.
"We are confident we will be a signatory again soon,"
T. Rowe Price and Morgan Stanley Investment Management had
Pimco said it remains committed to the principles of
stewardship and engagement, while Northern Trust Asset
Management said it was working diligently with the FRC to
showcase its longstanding commitment to responsible stewardship.
The FRC said that to remain signatories, organisations will
need to continue to improve their reporting as market practice
and expectations evolve.
$1 = 0.7230 pounds)
(Reporting by Huw Jones; Editing by Emelia Sithole-Matarise,
Louise Heavens and Jan Harvey)