FRC overhauls the Investor Stewardship Code to focus on value creation, reducing burdens and enhanced engagement between market participants
News types: Policy Statements
Published: 3 June 2025
The Financial Reporting Council (FRC) has today published the UK Stewardship Code 2026, an updated set of principles which offers a framework for reporting that demonstrates high quality stewardship to support economic growth and investment.
After an extensive stakeholder consultation involving over 1,500 stakeholders, the FRC has updated its Stewardship Code. The new Code takes effect from 1 January 2026 and aims to support long-term sustainable value creation while significantly reducing the reporting burden for signatories.
The UK Stewardship Code operates as part of a comprehensive regulatory framework alongside the FCA's oversight of financial markets, the Pensions Regulator's protection of member interests, and the DWP's pension scheme regulations. It has established itself as a global benchmark for best practice in stewardship, driving transparency and accountability in the investment chain. It currently has nearly 300 signatories who represent around £50 trillion in assets under management (AUM). The 2026 Code builds on this success while responding to feedback from signatories and the wider investment and corporate issuer community.
Richard Moriarty, FRC CEO, 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.”
Sacha Sadan, FCA Director of Sustainable Finance said:
"The FRC’s new Stewardship Code represents a strong, industry-wide commitment to improving transparency in stewardship practices. It enables owners to access high-quality information about how their assets are being managed.
The new Code sets out clear expectations for effective stewardship, helping firms act with clarity. This is vital not only for building trust in UK markets but also for supporting long-term growth and competitiveness of the UK economy.
We will continue to work closely with the FRC to support high-quality stewardship standards in UK markets which is central to both our operational objectives.”
Julian Lyne, Interim Executive Director of Market Oversight at The Pensions Regulator, said:
“Pension schemes with investment horizons long into the future are uniquely placed to deliver long-term value for savers.
“It is vital trustees consider using resources such as the Stewardship Code to manage systemic risk, including climate risk, and improve their investment governance. We would encourage all workplace pension schemes to sign up.”
Key features of the UK Stewardship Code 2026:
- Enhanced definition of stewardship: The updated definition focuses on the principle of stewardship as the creation of long-term sustainable value for clients and beneficiaries.
- Reduced reporting burden: The Code features fewer Principles and shorter 'how to report' prompts instead of detailed reporting expectations, helping to eliminate 'box-ticking' approaches to reporting against the principles. Early evidence suggests signatories may be able to reduce reporting volume by 20-30% while maintaining quality.
- Flexible reporting structure: Signatories can 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.
- Targeted Principles: The Code now 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.
- New guidance: Optional guidance will provide useful tips and examples to support effective implementation, particularly for those managing non-equity asset classes.
To support signatories in adapting to the new Code, 2026 will serve as a transition year. During this period, no existing signatories will be removed from the signatory list following their 2026 application. This will allow current signatories to familiarise themselves with the new format and use it as a platform to explain their individual approach to stewardship. The FRC will engage with signatories through publications, webinars, and bilateral discussions to support the transition.
The 2026 Code was developed through a comprehensive consultation process. This began with preliminary discussions in February 2024, followed by formal consultation from 11 November 2024 to 19 February 2025. The process involved over 1,500 stakeholders and incorporated insights from four years of reporting under the previous 2020 Code. The consultation responses showed strong support for maintaining high standards of stewardship while reducing the administrative burden of reporting.
Read the UK Stewardship Code 2026 and its Feedback Statement.
UK Stewardship Code 2026: at a glance.
Read the Guidance introduced to assist applicants reporting to the UK Stewardship Code 2026.
Register your place at the FRC’s webinar on the UK Stewardship Code 2026, taking place at 3pm on Wednesday 18 June.