July 2, 2025 New Stewardship Code for 2026
The UK Stewardship Code is a voluntary code which applies to asset managers, asset owners and service providers. Signatories to the code are expected to follow a suite of corporate governance principles with a view to delivering the “responsible allocation, management and oversight of capital to create long-term sustainable value for clients and beneficiaries.”
First introduced in 2010, the Stewardship Code was updated at the end of 2019 to take account of environmental, social, and governance factors. Setting a global benchmark for stewardship, the code currently has some three hundred signatories, together accounting for around £50 trillion in assets under management.
Now the code has undergone a further revision with a view to supporting “long-term sustainable value creation” whilst significantly reducing the reporting burden for signatories. In line with other corporate reporting requirements the code looks towards a flexible comply or explain model. It requires signatories to provide policy and context disclosures every four years or sooner should their internal structures change, but to report on compliance with the principles of the Stewardship Code every year. One of the aims of the code revision is to reduce ‘box ticking’ approaches to reporting against the principles.
The Stewardship Code also differentiates between asset owners and managers, and service providers. So, asset owners have to look towards five policy and context disclosure areas and six principles. These principles are: integrating stewardship and investment, promoting well-functioning markets, engagement, exercising rights and responsibilities, selection and oversight of managers, and monitoring service providers. In turn service providers have to meet four policy and context disclosure areas and four principles. These principles are: communicating with clients, proxy advisory services, investment consultant services, and engagement provider services.
The new code will take effect from 1 January 2026. For existing signatories, 2026 will be seen as a transition year; so whilst they will have to report in 2026 in accordance with the new code, they will not have their place on the signatories list revoked in should they not fully meet the requirements of the revised code. New signatories to the code will not have the grace period and will be expected to fully meet code requirements in 2026.
Commenting on the revisions to the Stewardship Code, Sacha Sadan, FCA Director of Sustainable Finance said: “The new Code sets out clear expectations for effective stewardship, helping firms act with clarity. This is vital not only for building trust in UK markets but also for supporting long-term growth and competitiveness of the UK economy.”
