Dear Member, 

Welcome to this bumper edition of the RoundUp of the regulatory, policy and industry developments from December and January.

Firstly, I am delighted that our revised Best Practice Guidelines were issued this week, with new material on AI, ESG IR Strategy and Private Company IR. They have been revamped into HTML format to improve navigation, I hope you find them a valuable resource – let me know what you think! 

In December, we saw the finalised Voluntary Code for ESG Data/Ratings providers, which already has ten signatories, internationalised SASB Standards, draft sector specific guidance on transition plans, and the announcement of a new UK Transition Finance Market Review. In market regulation, we saw details of the new FCA Listing regime, and the FCA’s new metrics for demonstrating progress on its growth and international cometitveness objective. 

We have started the year with a further raft of developments including the revised Corporate Governance Code and supporting guidance. I also include below the updated voting guidelines from Glass Lewis and ISS.

As a reminder, the raised threshold for reporting net positions kicks in from next Wednesday, 7th February.

Finally, the Society submitted evidence on scope 3 and SECR emissions reporting - we will continue to canvass IRO members on topical issues, and we really do appreciate you taking the time to participate as it very much strengthens the views and evidence that we share with policy makers and regulators.

With so much going on, 2024 is already promising to be a very busy year!

Best wishes,

Liz Cole

Head of Policy and Communications (Working hours: 9-3pm Mon- Thurs)

https://www.linkedin.com/in/liz-cole

The Investor Relations Society, 70 Gracechurch Street, London EC3V 0HR.

Tel: + 44 (0) 20 3978 1980

Mob: +44 (0) 7356 137071

www.irsociety.org.uk

Revised Corporate Governance Code

Key changes include increased focus on outcomes reporting, reinforcement of ‘explanations’ (where directors decide that Code departures are more appropriate) and improved transparency around the effectiveness of internal controls and 'malus and clawback' arrangements/usage. Revised supporting guidance has also been issued, aimed at being less prescriptive.

New UK listing regime - detailed FCA proposals released

The FCA is consulting on proposals intended to make the UK’s listing regime more accessible, effective and competitive. As proposed in its 2023 consultation, the FCA is moving to a simplified listing regime with a single listing category with streamlined eligibility and ongoing requirements. The FCA is also pushing ahead with moving towards a disclosure-based regime. 

Code of Conduct for ESG Ratings and Data providers

The Voluntary Code of Conduct for ESG Ratings and Data providers was issued in December, with a focus on promoting transparency, good governance, management of conflicts of interest, and robust systems and controls.

Signatories to the Code are listed on ICMA's website (ten providers had signed up as at 1 February). Once signed up, ESG ratings providers have 6 months to issue a statement of adherence (with ESG data providers having 12 months).

Glass Lewis and ISS proxy guidelines for 2024

Glass Lewis and ISS have set out their updated views on current market practice and voting recommendations for AGMs in 2024.

UK Transition Finance Market Review

The UK has established a new Transition Finance Market Review, which is due to report by July on how the UK financial and professional services ecosystem can become a leading hub for transition financial services, including how best to create the conditions for scaling transition focused capital raising with integrity.

Read more

SASB Standards now Internationalised!

The ISSB has amended the SASB Standards to enhance their international applicability, removing and replacing jurisdiction-specific references and definitions, without substantially altering industries, topics or metrics. The new standards are available here.

IFRS Sustainability knowledge hub

The IFRS Foundation has launched the IFRS Sustainability knowledge hub, designed to help companies prepare their disclosures applying ISSB Standards. It includes FAQs and guides, and new resources such as an introduction to the ISSB Standards, a guide to making the transition from TCFD to ISSB, and a tool mapping the Integrated Reporting Framework with IFRS S1 and IFRS S2.

The ISSB has also published new educational material to support the application of IFRS S1 and IFRS S2, with three examples illustrating reporting on risks and opportunities that are climate-related but that also consider nature or social issues.

Society evidence on Scope 3 reporting

The IR Society recently canvassed IRO members about Scope 3 and SECR reporting, finding a willingness among corporates to report Scope 3, especially among the largest companies, but indicating a clear challenge around reliability/measurement given widespread reliance on estimates and/or third party providers. The Society used the findings to respond the recent Government call for evidence on emissions reporting.

Takeovers where target director appointed by shareholder

The Takeover Panel has published a new bulletin providing guidance for where a target has representative directors who have been appointed by, or otherwise represent the interests of, a target shareholder.

Rule 20.1 of the Takeover Code requires information and opinions relating to an offer (or a party to an offer) to be made equally available to all target company shareholders. Panel Bulletin 6 highlights the need to consider the application of Rule 20.1 where a target director has been appointed by a target shareholder, and such director is provided with information by the target company who in turn provides that information to their appointing shareholder.

Notification of net short positions

As from 5th February 2024, the initial threshold for notifications of net short positions to the FCA are raised from 0.1% to 0.2%. The FCA has issued updated guidance in relation to the notification and disclosure of net short positions.

Metrics for FCA international competitiveness/growth objectives

The metrics for the FCA's new international competitiveness/growth objectives include

• annual FCA disclosure for 'Number of new entrants, exits from UK market, for each sector';
• biannual FCA disclosure of 'Number of listed equity entities on UK exchanges: total + change in period'; and
• various metrics for digital/innovation.

Best practice tips for tagging

As mentioned in previous RoundUps, a surprisingly high number of listed companies continue to miss the deadline for filing their digitally tagged reports with the NSM, so companies need to ensure they build in sufficient time for the tagging process.

The latest report from the FRC Lab found that 36% of investment professionals are using structured reports as a data source (alongside more traditional data sources), illustrating how structured digital reports are becoming more important to support investor decision-making.

The report sets out some areas of focus for companies and suggestions to optimise reporting to meet the needs of investors and other users, including good practice tips for tagging, design and usability, and process.