PIMFA
Latest News
October 2025
- FCA welcomes legislation to bring ESG ratings providers into regulation
The FCA has welcomed the government’s legislation to bring Environmental, Social and Governance (ESG) ratings providers into the regulator’s remit.
The legislation, which was broadly supported by the industry, will provide the FCA with the necessary powers to regulate ESG ratings providers – an important step towards ensuring that there are transparent, reliable and comparable ESG ratings. In parallel with the Government finalising its legislation, the FCA has been developing their regime for ESG ratings. Now that the legislation has been laid before Parliament, the regulator intends to consult on the proposed rules before the end of the year.
The proposals, informed by the International Organisation of Securities Commissions (IOSCO) recommendations, will focus on four key areas: transparency, governance, systems and controls, and conflicts of interest.
The FCA will also be producing guidance to help firms assess whether their activities will fall under regulation and require our authorisation.
June 2025
- The UK Stewardship Code 2026
The Financial Reporting Council (FRC) has published the UK Stewardship Code 2026, an updated set of principles which offers a framework for reporting that demonstrates high quality stewardship to support economic growth and investment. 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.
The UK Stewardship Code has established itself as a global benchmark for best practice in stewardship, driving transparency and accountability in the investment chain. It currently has nearly 300 signatories who represent around £50 trillion in assets under management (AUM).
Key features of the UK Stewardship Code 2026:
- Enhanced 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 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. Early evidence suggests signatories may be able to reduce reporting volume by 20-30% while maintaining quality.
- 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 guidance will provide useful tips and examples to support effective implementation, particularly for those managing non-equity asset classes.
To support signatories in adapting to the new Code, 2026 will serve as a transition year. During this period, no existing signatories will be removed from the signatory list following their 2026 application. This will allow current signatories to familiarise themselves with the new format and use it as a platform to explain their individual approach to stewardship.
August 2025
- Climate Reporting Review
The FCA has set out the findings and next steps following their review into firms’ climate reporting. Overall, the FCA found that their rules have increased firms’ consideration of climate risks and supported their integration into firms’ decision-making. Firms were more transparent with their clients and consumers but encountered some challenges with the availability of data and consistent, well-developed methodologies.
The FCA has updated their sustainability reporting requirements webpage to clarify how firms in scope of both the Task Force on Climate-related Financial Disclosures (TCFD) and Sustainability Disclosure Requirements (SDR) rules can report efficiently under both regimes. The regulator is also considering how to streamline and enhance the sustainability reporting framework. The FCA wants to:
- Simplify disclosure requirements and ease unnecessary burdens on firms.
- Maintain good outcomes for clients and consumers and improve the decision-usefulness of reporting, building on the work of SDR to improve trust and reduce greenwashing.
Promote international alignment and help maintain the UK’s position as a global leader in sustainable finance.
