Newsflash – FRC issues update to the Investor Stewardship Code – June 2025

The Financial Reporting Council (FRC) has published the UK Stewardship Code 2026 which establishes the core Principles of effective stewardship and sets a high standard of transparency for asset owners and asset managers, and for the service providers that support them. 

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 and enhancing engagement between market participants. The changes provide an updated framework for reporting to demonstrate high quality stewardship and support economic growth and investment.

Issuing the new Code, FRC CEO Richard Moriarty said:

“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.”

Key features of the UK Stewardship Code 2026

• New 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 new 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. The FRC suggests signatories may be able to reduce their reporting volume by 20-30%.
• 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 supporting guidance has been issued for consultation and aims to provide useful tips and examples to support effective implementation, particularly for those managing non-equity asset classes.

Further details on the UK Stewardship Code 2026 can be found here.