The Financial Reporting Council (FRC), the UK’s financial reporting regulator, has published new guidance to help asset owners, managers and service providers prepare for the updated UK Stewardship Code, which takes effect on 1 January 2026.
The Stewardship Code sets out expectations for how institutional investors oversee and engage with the companies in their portfolios to support long-term, stable investment returns. Through transparent reporting, the code aims to strengthen accountability between investors and the businesses they own.
“The new code has paved the way for signatories to streamline their reports without reducing the quality and usefulness of the information included,” said Mark Babington, Executive Director of Regulatory Standards at the FRC.
The new publication, ’Preparing for the UK Stewardship Code 2026: applying insights from current reporting’, offers practical examples of effective reporting under the 2020 Code to help signatories adapt to the revised framework.
It highlights how to demonstrate policies, engagement outcomes and oversight of external managers in line with the code’s new two-part model, which separates less frequent policy and context disclosures from annual activities and outcomes reports.
According to the FRC, the 2026 Code is designed to reduce reporting burdens while maintaining the high standards that underpin its global reputation. Existing signatories will retain their status through 2026 as part of a transition year.
However, the revamp has proved controversial among some stakeholders. Critics have argued that the updated definition of stewardship risks weakening the environmental and social dimensions that previously anchored the code, prompting a wider debate about the balance between financial oversight and sustainability objectives.
Separately, the FRC issued International Standard on Sustainability Assurance (UK) 5000, ‘General Requirements for Sustainability Assurance Engagements’, which aims to provide UK companies, investors and assurance providers with a consistent, internationally aligned assurance standards for voluntary use in sustainability assurance engagements.
ISSA (UK) 5000 is a UK version of the global benchmark standard for sustainability assurance, developed by the International Auditing and Assurance Standards Board.
