The Financial Reporting Council (FRC) published the revised UK Stewardship Code 2026 on 3 June 2025, marking a major shift from the 2020 framework. The 2026 Code was published alongside the Feedback Statement to its earlier consultation, draft, optional non-prescriptive guidance, and a summary of the 2026 Code.
The new Code adopts a tiered approach that shifts focus from process to outcomes. With a revised definition, fewer principles, and shorter reporting prompts, the 2026 Code also aims to reduce the compliance burden for signatories.
In this article
What does this mean?
The 2026 UK Stewardship Code aims to support long-term, sustainable value creation while easing the reporting burden on signatories. It promotes a proportionate approach and encourages a shift from compliance-led reporting to one that is outcomes-focused and evidence-based. Key features of the 2026 Code include:
Revised definition of stewardship
The Code defines stewardship as: “The responsible allocation, management and oversight of capital to create long-term sustainable value for clients and beneficiaries.”
While the revised definition removes the explicit reference to “sustainable benefits for the economy, the environment and society,” signatories are still expected to consider a broad range of long-term risks and opportunities, including environmental and social factors, when applying the Principles. Under the 2026 Code, firms are expected to demonstrate how their stewardship activities incorporate their own priorities and objectives, including sustainability.
New two-part reporting structure
Signatories must publish:
- The Policy & Context (P&C) Disclosure: to be submitted every four years, or earlier if there are material changes. This report outlines the signatory’s purpose, governance, and resources that support its approach to stewardship. According to the FRC, it should be “engaging, succinct and in plain English”.
Activities and Outcomes (A&O) Report: to be submitted annually, this report sets out stewardship practices and outcomes over the previous 12 months. The FRC advises that it should be “fair, balanced and understandable” and set out successes, challenges, and lessons learned. While standalone, it can include links to supporting documents.
Both reports must be approved by the governing body, signed by the Chair, Chief Executive, or Chief Investment Officer, and published on the signatory’s website. They may be published as separate documents or combined into one report.
Streamlined and targeted principles
The 2026 Code consolidates the number of Principles from the 2020 Code with the aim of removing duplication to improve clarity, usability, and a focus on outcomes-based reporting.
The P&C Disclosure supports the A&O report and is structured around defined disclosure areas. Each Disclosure has specific reporting requirements outlining what information should be published. Asset managers and owners will need to report across five disclosure areas and service providers to report across four. There is also a dedicated Principle for proxy advisor services.
The A&O Report is structured around six ‘apply and explain’ Principles for asset managers and owners, and four for service providers (i.e. proxy advisors, investment consultants and engagement service providers). Each Principle is supported by concise, non-prescriptive ’how to report’ prompts, which the FRC states outline the type of information it expects signatories to include. These prompts will also inform the regulator’s assessment of reporting quality.
Proportional and flexible approach to disclosures
Similar to the 2020 Code, the 2026 Code recognises that firms may take different approaches to Stewardship, depending on their size, business model and investment strategy. The new structure of the 2026 Code is intended to enhance transparency and improve the quality and comparability of disclosures.
Asset managers and asset owners are expected to report on Principles 1, 2, and 6 (integration of stewardship, promotion of well-functioning markets, and oversight of service providers).
Beyond these, firms should assess whether Principles 3 to 5 (engagement, exercising rights, manager oversight) align with their specific stewardship approach and activities. Firms should report on the Principles that best represent their stewardship approach and provide an accurate account of the activities undertaken.
What do firms need to do?
Review and update your existing stewardship strategy and reporting process to align to the new Code’s structure and reporting cycle.
Review current reporting against the new Code’s outcomes-based and principles-led requirements.
Map stewardship strategy to FCA Sustainability Disclosure Requirements (SDR) label requirements and reporting obligations, where applicable.
Firms need to assess their current stewardship strategy, and how they report, against the revised Code, particularly the updated definition and focus on providing long-term sustainable value. In addition, firms need to consider whether their current record-keeping approach to engagements appropriately captures outcomes from stewardship activities - an area that is central to the revised Code, but one that firms have historically struggled to report against. Firms will also welcome the ability to report less frequently on the P&C areas, which do not tend to change that often, yet can be time-consuming to review and refine year-on-year.
Existing signatories reporting in autumn 2025 should begin aligning with the 2026 requirements now, balancing their final report under the 2020 Code with preparations for reporting against the revised code from 2026 onwards. This follows the existing FRC guidance on reporting under the 2020 Code, which allowed some flexibility of updating P&C disclosures under certain Principles.
This is also another signal of the broader, ongoing shift towards outcomes-based regulation. While the framework offers greater flexibility and proportionality, the FRC maintains clear expectations for high-quality, evidence-led reporting. Firms should see this as a chance to evolve their sustainability reporting approach and to integrate stewardship more strategically.
Asset managers should consider how internal workstreams can be aligned to support reporting under both the revised Stewardship Code and the FCA’s SDR regime, particularly in relation to the upcoming product-level disclosures for labelled funds. Coordinating these efforts can help drive efficiency, enhance consistency, and support a credible, integrated narrative on active ownership.
“Firms should pay close attention to both the revised 2026 Code, guidance and intentions behind the FRC’s updates. We know a number of firms failed to get signatory status initially under the 2020 Code as the FRC took a hardline on compliance - it’s likely to adopt a similar approach under the 2026 Code, meaning issuing a comprehensive and compliant 2026 Code Report will be essential to keep signatory status after the transition year.”
David Croker
Partner, PwC
Next steps
The 2026 Code is effective from 1 January 2026.
The consultation on the draft guidance closes on 31 August 2025. Final guidance will be published this autumn.
To ease implementation, 2026 will be a transition year. Existing signatories remain signatories by submitting their P&C Disclosure and A&O report during their regular reporting period. Assessments will resume in 2027.
Autumn reporters: Submit under the 2020 Code in autumn 2025 and report to the 2026 Code from autumn 2026. However, note the FRC interim guidance, which allows some flexibility in what information needs to be included in the 2020 Code report.
Spring reporters: Report against the 2026 Code in spring 2026.
New applicants in 2026 will be subject to the full assessment process.
Contacts
David Croker
Gemma Jones
Follow us
