A New Stewardship Code: Ambitions and Additional Guidance

The FRC published the revised UK Stewardship Code in June after extensive consultation with stakeholders. For the first time, the Code was accompanied by additional Guidance, to which IIGCC submitted a set of suggestions for improvement. 

In August of last year, we welcomed interim changes that streamlined the Stewardship Code but questioned whether they came at the cost of ambition. 

The UK Stewardship Code has long been regarded as a leading standard for investor stewardship practices, setting high expectations for how signatories conduct stewardship on behalf of clients and beneficiaries. For many, signatory status has long been seen as a stamp of approval.  

Its influence extends beyond the UK, with two-fifths of signatories headquartered outside the UK. Regulators worldwide also look to the UK Code for inspiration. 

A New Code 

Alongside the welcome structural changes to streamline reporting, the major change in the new Code was the definition of stewardship.  

IIGCC emphasised during the consultation that embedding sustainability in the core objective of stewardship – “the creation of sustainable long-term value” – was critical. This naturally entails considering climate-related risks and opportunities in line with investors’ fiduciary duties, placing sustainable climate change mitigation and adaptation at the heart of value creation.  

IIGCC’s suggestions for the additional Guidance can be found here. 

Following the consultation, supporting language to the definition strengthened the links between stewardship and fiduciary duties, while also underlining the importance of stewardship having regard to the economy, environment and society.  

Additional Guidance 

Regarding ambition, the FRC emphasises that the new Code aims to deliver a “high standard of transparency”, rather than action. However, to help bridge this gap between transparency and action, the FRC’s new additional Guidance provides optional and non-prescriptive suggestions for signatories.   

Through our own member consultations, including joint roundtables with PRI and UKSIF, IIGCC found the Guidance offers much-needed support for signatories seeking to improve reporting quality and consistency in a flexible manner.  

The ability to make suggestions prior to publication has been warmly received by practitioners. It will help to ensure that the Guidance is relevant, practical, and useful from its first publication through its evolution. 

IIGCC’s response demonstrates where the FRC can continue to advance critical stewardship concepts. The Guidance provides opportunities to refine definitions of both engagement and outcomes, helping to create clearer distinctions that strengthen comparability and ambition. 

It also clarifies links between case studies and overall stewardship strategies, reinforcing the connection between strategy and sustainable, long-term value creation.  

There is also potential to extend stewardship expectations across other asset classes. In addition, the Guidance reflects continued progress towards a more open approach to collaborative engagement and systems stewardship, both of which are essential for driving meaningful and scalable impact.  

For more on these suggestions, please see the IIGCC response. We also welcome the extensive outreach by the FRC throughout this process.  

While further development is possible, the additional Guidance raises the ambition of the Code and its signatories. It articulates what effective reporting and, by extension, action, might constitute, helpfully providing insight, not instruction.  

Building on progress 

The additional UK Stewardship Code Guidance provides a foundation for signatories to strengthen their stewardship practices and report more transparently. Looking forward, the FRC can continue supporting best practices by highlighting emerging concerns, showcasing exemplary stewardship, and maintaining ongoing dialogue with practitioners.  

IIGCC will continue to work with the FRC and others to help deliver effective and ambitious stewardship that supports real economy decarbonisation and creates sustainable long-term value.  

If you would like to be involved in IIGCC’s stewardship responses and broader stewardship activities , please reach out to Laith Cahill.  

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