UK Stewardship Code 2026

Six months after its launch in June, the UK Stewardship Code 2026 has undergone further refinements, incorporating stakeholder feedback from over 1,500 respondents via consultation.

The goal of the revised Code was to provide an updated definition of stewardship and reduce the reporting burden on signatories, following criticism that previous versions have been excessively complicated and time-consuming to complete.

The final version also seeks to strengthen impact reporting expectations by requiring substantiation of any claims, and adds flexibility for non-equity classes.

So what has changed and what does it mean for asset managers?

Definition of stewardship

A key discussion point in the June 2025 revision of the Code centred on a proposed definition of stewardship that removed reference to “sustainable benefits for the economy, the environment and society”. While the FRC sought to create a more investor focused definition, critics noted this shift diluted the emphasis on sustainability. Following consultation, the final definition – “Responsible allocation, management and oversight of capital to create long-term sustainable value for clients and beneficiaries” was updated to include clarifying language noting that signatories are expected to “take account of long-term risks and opportunities, having regard to the economy, the environment and society, upon which beneficiaries’ interests depend”. This compromise also aligns the Code more closely with Section 172 of the Companies Act 2006, the PRI definition of stewardship, and UKSIF recommendations, restoring a stronger link to environmental and social considerations without making them mandatory outcomes.

Reporting structure

In the June edition of the Code, the structure of reporting was changed such that signatories now need to submit a ‘Policy and Context Report’ every four years and an ‘Activities and Outcomes Report’ annually, with the option to submit a combined report annually. These changes remain unchanged in the latest version.

Flexibility is also reinforced in the updated Code. The FRC stresses that reporting is optional, non-prescriptive, and tailored to firm size, structure, and asset class.

Together these elements are intended to reduce the reporting burden and associated costs, especially for smaller firms.

Principles

The new Code includes fewer Principles (6 instead of 12) and replaces detailed reporting expectations with shorter ‘how to report’ prompts. It also provides specific guidance for asset managers, owners, and service providers, aiming to avoid the need for different groups to interpret generalised guidance, which in previous versions tended towards asset owners.

Engagement & outcomes

One of the key elements of the new Code guidance is the shift from “box-ticking” to impact. In Activities & Outcomes, firms must now not only list actions but demonstrate stewardship influence and learnings. Substantiation is key, and firms will need to demonstrate and evidence stewardship impact and influence rather than just describing activities. This reflects a broader industry trend toward requiring firms not only to cite examples of stewardship activity but to provide clear, verifiable evidence of the outcomes and impact achieved, as well as lessons learned.

Additionally, service providers including proxy advisors, consultants, and engagement firms must now demonstrate quality, escalation paths, and client communications.

Non-equity guidance

In the June update of the Code, the FRC introduced draft optional guidance for signatories managing non-equity asset classes (e.g., fixed income, real estate, private markets). This aimed to help apply the Code’s Principles beyond listed equity, and emphasised flexibility and proportionality, acknowledging that stewardship looks different in debt or real assets.

The final guidance retains the optional nature but is more detailed and structured, providing practical examples, not merely optional tips. Key additions include new dedicated sections for asset classes (fixed income, real estate, infrastructure, private equity), and clearer guidance on reporting Activities and Outcomes for non-equity engagements (e.g., how bondholder engagement differs from shareholder voting). This seeks to make the Code more applicable to a wider range of investors and strategies, and is a welcome update as such.

Timing and transition

The new Code comes into effect on 1 January 2026, with asset managers and service providers expected to apply by 30th April 2026, and asset owners by 31st May 2026.

However, 2026 has been designated a “transition” year, meaning that existing signatories will remain on the list after submitting their reports without immediate assessment. This provides time for signatories to familiarise themselves with the new guidelines. No signatories will be removed in 2026, and full assessments will begin in 2027.

New applicants to the Code in 2026 will however, be evaluated under the full 2026 framework.

Conclusion and next steps

We welcome the overall approach taken by the new Code and additional updates in the final edition. We believe these changes will help to streamline disclosures and reduce the overall burden on firms. We also believe the renewed emphasis on actual, evidenced impacts will allow firms to clearly demonstrate how their stewardship activities are contributing to real world changes and the lessons they have learned.

The first step for all firms will be to get to grips with the changes and map their latest disclosure to the new framework to check for gaps and identify areas that might need updating. With the transition year in place, firms have the opportunity to use 2026 to refine their responses to the new framework and make sure they are ready for disclosure in 2027.

While the new UK Stewardship Code introduces fresh expectations and will pose some initial implementation challenges, it represents a significant and positive step forward in strengthening accountability and long-term value creation across the investment stewardship value chain, and for this we support the changes.

If you’d like to know more about the UK Stewardship Code or need help in preparing your application, please get in touch.