UK: Investment Association's Updated Statement On Shareholder Priorities

The Investment Association (IA) has published a document discussing its listed company shareholder priorities for 2022.

First published in January 2020, the IA Shareholder Priorities document outlines investors' expectations for the coming year and sets out how the Institutional Voting Information Service (IVIS), which is part of the IA, will analyse these issues for companies with year-ends on or after 31 December 2021 (including its "colour-top" approach).

Three key areas covered by the 2022 Guidelines are:

• Climate change - The IA expects companies to be taking action now on climate change and encourages companies to publish net-zero transition plans before it becomes mandatory to do so. IVIS will amber-top all companies that do not make disclosures against all four pillars of the Task Force on Climate-related Financial Disclosures (TCFD) Recommendations.
• Diversity - The IA supports the proposals contained in the FCA's consultation on additional diversity targets and reporting (see our blog post here for further detail) and the recommendations recently announced by the FTSE Women Leaders Review (see our blog post here). The IA expects companies to explain the approach they are taking to meet the new targets and is encouraging companies to disclose against the new reporting template proposed by the FCA. IVIS will red-top FTSE 350 companies where women represent 33% or less of the board, or 28% or less of the executive committee and their direct reports. It will also red-top FTSE 100 companies that do not have at least one director from a minority ethnic group on the board, in line with the Parker Review recommendation.
• Stakeholder engagement - The IA expects disclosures on stakeholder engagement to include the impact of increases to the cost of living and inflationary pressures on consumers and suppliers, as well as the impact of the Covid-19 pandemic.

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