By Chris O'Bryen, Investment Associate Consultant, Hymans Robertson
The definition of Stewardship has been revised to focus on ‘sustainable’ long-term value creation and remove explicit reference to wider economic, environmental and social benefits. This was a contentious detail in the consultation, as this definition sets the tone for the Code. We valued the prior reference to the broader benefits of activity, which acknowledged the wider ecosystems in which companies and investors operate. While this wording remains in the introduction, this updated definition may facilitate disclosure for a wider range of global signatories, especially those facing pushback regarding ESG-related activity.
‘Stewardship is the responsible allocation, management and oversight of capital to create long-term sustainable value for clients and beneficiaries.’ - Definition of Stewardship from the FRC
The Code’s purpose has evolved from setting high stewardship standards to focusing on effective stewardship and elevated disclosure standards. This shift may mean investors can no longer look to signatory status as an indicator of an asset manager’s capabilities.
Reduced reporting burden
Interim guidance published in July 2024 details measures to ease reporting requirements on signatories. The updated Code sets out a disclosure schedule for:
Contextual disclosure every four years. This is covered by five reporting principles.
Stewardship activity and outcomes annually. This is covered by six reporting principles.
Consistent with interim guidance, not all principles are required if there isn't material activity to disclose. Together, these changes should help shorten reports, focus on stewardship activity and improve disclosure.
Consolidated and restructured principles
The wording of the principles is more directive, and some have been consolidated (eg for asset owners and managers, prior principles relating to initiatives and collaboration have been consolidated). Principles no longer set out requirements across context, activity and outcome, reflecting the new reporting split and ongoing nature of activity.
Greater flexibility and recognition of different service providers
Focused principles for different service providers brings the Code up to date with the modern investment value chain, where investors and asset managers lean on the expertise of a range of specialists. This can better help investors assess service providers’ activity and offers the Code greater breadth and a consistent approach across peers.
Emphasis on your own engagement framework
Where asset owners might previously have relayed case studies from the managers to whom they delegate, Principle 3 (regarding engagement) highlights that disclosure should relate to a breadth of activity (which may be directly with companies, managers or collaboratively), with guidance suggesting best practice such as priority setting.
Improved member communication
A continued focus on writing in plain English, and guidance around optional introductory statements highlighting key developments or background, should support communication with members and other stakeholders.
Reporting guidance
Clear reporting requirements and ‘how to report’ information steers effective activity and disclosure quality. Separate reporting guidance has been published in draft, acting as an FAQ, and while it’s subject to consultation and until August 2025, we believe signatories shouldn't delay their planning.
Please reach out to our responsible investment team or visit our service page to discover how we can help you meet the requirements of the UK Stewardship Code (2026).
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