Revised UK Stewardship Code 2026

The UK’s Financial Reporting Council (FRC) has published its updated UK Stewardship Code 2026, effective from 1st January 2026.

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

The UK Stewardship Code is a voluntary initiative aimed at helping asset managers, asset owners and service providers to demonstrate their commitment to stewardship. Signatories are required to report annually, providing evidence of their stewardship activities against a set of Principles.

Definition of Stewardship

Stewardship is the responsible allocation, management and oversight of capital to create long-term sustainable value for clients and beneficiaries.  

Under the new Code’s definition of stewardship, reference to “sustainable benefits for the economy, the environment and society” have been removed. The FRC says this change reflects feedback from recent consultations which suggested some felt the previous definition implied firms needed to demonstrate environmental and social benefits. The FRC notes that the revised definition emphasising “long-term sustainable value” is better aligned with asset managers and owners’ fiduciary responsibilities and offers additional flexibility in how it can be met. Critics meanwhile note that the removal of an explicit reference to people and the environment risks creating ambiguity and lowering expectations on firms that may lead to weaker social and environmental impacts.

Reducing the reporting burden

Principles and guidance

The new Code includes fewer Principles 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.

Structure and reporting

The structure of reporting has also been overhauled. Signatories will 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.

This change aims to reduce duplication of contextual information (e.g. around firm’s policies and processes) that tends not to change frequently, enabling signatories to focus on the outcomes of their stewardship activities. Firms are now encouraged to report on progress against ongoing activities and lessons learned, rather than on successful, completed activities which previous iterations of the Code emphasised.

The FRC hopes these changes will help to provide flexibility and reduce the length of reports by 20-30%.

Conclusion and next steps

We welcome the changes to the revised Code and hope they will enable firms to focus their attention on the most important elements of stewardship (i.e. impacts and outcomes) whilst reducing the need to churn out duplicative background details.

We appreciate the additional flexibility afforded by the new definition, and where relevant, we will continue to encourage firms to focus on environmental and social benefits in the context of long-term value creation.

If you would like additional information or advice on how to implement the revised Stewardship Code, please get in touch.