Environmental, social and governance issues

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There are key environmental, social and governance (ESG) matters that organisations need to consider in the context of their corporate governance. On these, it may be useful to refer to Practice Note: Environmental, social and governance issues—fundamentals.

What is ESG?

ESG is an umbrella term used to refer to the environmental, social and governance issues or aspects of an activity. In the context of corporate governance, the Chartered Governance Institute (CGI) describes ESG as covering:

  1. •

    Environmental—the company’s impact on the natural environment and the environment’s impact on the company, including climate change impacts, direct impacts (the company’s own activities) and indirect impacts (throughout its value chain, including suppliers and customers or investments)

  2. •

    Social—interactions with, responsibilities towards, and impact on stakeholders

  3. •

    Governance—compliant and ethical conduct of the company’s business, in line with its purpose and enabled through effective decision-making

ESG is closely aligned with the concept of corporate social responsibility (CSR) and that of responsible investment. CSR, also known as corporate responsibility or corporate citizenship, is a business management or governance concept whereby an organisation aims to create a positive impact,

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Latest Corporate News

FCA publishes final rules for the PISCES sandbox to allow trading in private company shares

The Financial Conduct Authority (FCA) has published policy statement PS25/6, establishing the final rules for the Private Intermittent Securities and Capital Exchange System (PISCES)—a new platform where shares in private companies can be traded on an intermittent basis. The platform will be delivered through a sandbox approach, allowing the FCA to test the design before finalising a permanent regime in 2030. The sandbox is now open and prospective operators should apply to the FCA for a PISCES approval notice. Once approved they will be able to run intermittent trading events.

Corporate weekly highlights—5 June 2025

This week's edition of Corporate weekly highlights includes news of the FCA publishing the UK Stewardship Code 2026, launching of a consultation on the proposed UK version of ISSA 5000 and finalising the amendments to FRS 101, also included is the publication of the new Enforcement Guide by the FCA, the issuing if a joint statement on corporate governance principles by the chairs of eight national corporate governance code institutions and a case considering breach of fiduciary duties and acting in bad faith in a share transfer deal.

FCA publishes new Enforcement Guide

The Financial Conduct Authority (FCA) has published Policy Statement PS25/5, introducing the new Enforcement Guide (ENFG), which replaces the previous Enforcement Guide (EG) from 3 June 2025. The updated guide aims to enhance transparency in enforcement investigations and streamline provisions that are already set out elsewhere. PS25/5 follows Consultation Paper CP24/4 and CP24/2: Part 2. The FCA dropped plans for a new investigation publicity policy based on a ‘public interest test’ (referred to as the ‘name and shame proposal’) and ENFG retains the 'exceptional circumstances' test for announcing investigations into regulated and listed firms. However, it allows the FCA to share information in limited circumstances such as naming the subjects of investigations into suspected unauthorised financial services, including the communication of  unapproved financial promotions. Further updates include those consulted on in CP24/2, in addition to changes made in light of feedback received.

FRC publishes UK Stewardship Code 2026

The Financial Reporting Council (FRC) has published the UK Stewardship Code 2026, which will come into effect on 1 January 2026. The Code, developed in response to stakeholder feedback from the FRC’s November 2024 consultation, sets out updated principles of effective stewardship aimed at supporting long-term sustainable value creation while reducing the reporting burden for signatories. It also introduces a flexible, principles-based framework to enhance transparency in stewardship practices. The Code is not prescriptive and does not direct how signatories should invest. To help signatories adapt, 2026 will serve as a transition year, during which no existing signatories will be removed from the list following their 2026 application. The FRC has also published draft guidance for consultation to assist applicants with reporting under the new Code. Comments are invited until 31 August 2025, with the final guidance expected in autumn 2025.

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