FRC unveils updated UK Stewardship Code for 2026

Written by Sophie Smith

03/06/2025

The Financial Reporting Council (FRC) has published the UK Stewardship Code 2026, which includes a number of updates designed to support long-term sustainable value creation while "significantly" reducing the reporting burden for signatories.

The new code was shared following an "extensive" shareholder consultation, which involved over 1,500 stakeholders, and will take effect from 1 January 2026.

However, the FRC confirmed that, in order to support signatories in adapting to the new code, 2026 will serve as a transition year, with no existing signatories to be removed from the signatory list during this period.

This is intended to allow current signatories to familiarise themselves with the new format and use it as a platform to explain their individual approach to stewardship.

In particular, key features of the UK Stewardship Code 2026 include an enhanced definition of stewardship, which focuses on the principle of stewardship as the creation of long-term sustainable value for clients and beneficiaries.

It also aims to reduce the reporting burden for signatories, featuring fewer principles and shorter 'how to report' prompts instead of detailed reporting expectations, which are intended to eliminate 'box-ticking' approaches to reporting against the principles.

Indeed, early evidence suggests signatories may be able to reduce reporting volume by 20-30% while maintaining quality.

The new code also makes use of a flexible reporting structure, allowing signatories to submit separate Policy and Context Disclosures and Activities and Outcomes Reports or combine them into a single document.

The Policy and Context Disclosure will only need to be submitted once every four years.

The code now also includes dedicated principles for different types of signatories, including asset owners, asset managers, and for the first time, specific principles for proxy advisors, investment consultants, and engagement service providers.

In addition to these changes, the FRC is sharing optional guidance to provide tips and examples to support effective implementation, particularly for those managing non-equity asset classes.

FRC CEO, Richard Moriarty, said: "The UK Stewardship Code 2026 provides signatories with a flexible principles-based framework that provides greater transparency on their stewardship in the face of unprecedented uncertainty.

“Extensive consultation confirmed strong investor backing for the code's importance and has directly informed the changes we have made to ensure it remains fit for the future. The updated code focuses on long-term sustainable value creation while cutting unnecessary reporting and improving engagement quality.

"New dedicated principles for proxy advisers increase transparency in the investment chain.

“The code is not prescriptive and does not direct how any signatory should choose to invest. It takes a principles-based approach which is focussed on delivering a clear outcome of value creation for clients and beneficiaries.”

The UK Stewardship Code operates as part of a comprehensive regulatory framework alongside the Financial Conduct Authority's oversight of financial markets, The Pensions Regulator's protection of member interests, and the Department for Work and Pensions' pension scheme regulations.

It has established itself as a global benchmark for best practice in stewardship and currently has nearly 300 signatories who represent around £50trn in assets under management (AuM).

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