The next six months – and the new rules of corporate engagement

In the second part of our series examining the trends, risks and opportunities facing business in the second half of 2026, we've asked our team of sector experts for their views on capital markets, ESG and impact, and trends across key sectors including financial services, property and infrastructure.

As business digests a smorgasbord of policy announcements from Andy Burnham's new government, and continues to navigate turbulent global markets, geopolitical challenges and rising costs of energy and raw materials, what will be the key developments that will impact corporate strategy, operations and reputation in the latter part of this year?

How are media coverage and engagement developing? (Richard Griffiths, Senior Counsel, Corporate Affairs)

The defining shift for strategic communicators in 2026 is that earned media is evolving from a publicity channel into a trust, authority and AI-discoverable asset - making relationship-led spokesperson engagement more important than at any point in the past decade. Journalists are no longer simply channels through which organisations reach audiences. They are increasingly trusted validators of information in our AI age. 

This shift is important because earned media is increasingly shaping how organisations are understood long after an article is published. AI tools are becoming a primary discovery mechanism for investors, customers, policymakers and even journalists themselves. As these systems summarise and synthesise information from authoritative sources, high-quality earned media coverage is helping to shape the narratives that AI surfaces about organisations and leaders. In this environment, earned media is evolving from a communications output into a trust and reputation asset with longevity. 

At the same time, the role of the spokesperson is changing. Audiences increasingly connect with people rather than institutions, placing a premium on authentic, visible leadership. The most effective organisations are aligning interviews, LinkedIn activity, video content, events, and thought leadership around a consistent narrative. The same thematics must be communicated with a trusted human voice and in a way that is repeatable. Editors need trusted company spokespeople willing to share a compelling point-of-view that drives a story forward. Organisations that do this well achieve greater credibility, visibility and enhanced reputation.  

So, for corporate affairs advisers, success will not be measured primarily by the volume of coverage secured. Now it is less about chasing coverage and more about building credibility, trust and influence in the most respected media cohort. This is what is shaping perception in the AI-era. 

Politics, capital and the return of real estate (Angus Booth, MD, Strategy & Corporate Communications, Property & Infrastructure)

As we head into the second half of 2026, the real estate market stands at an interesting crossroads of politics, capital and opportunity. After several years marked by inflation, higher interest rates and valuation uncertainty, the green shoots of confidence are starting to return. Borrowing costs are stabilising, capital market conditions are improving, and renewed international interest in UK and European assets is laying the groundwork for a more active investment climate. Still, the political backdrop remains unsettled. Andy Burnham's role as the UK’s new Prime Minister, adds another layer of uncertainty, and potentially major reform, for property owners, investors and developers.

A Burnham premiership could mark one of the most significant shifts in UK property policy in decades. Proposals being discussed include replacing council tax and stamp duty with new property or land value taxes, lowering the threshold for the High Value Council Tax Surcharge ("mansion tax"), aligning capital gains tax more closely with income tax rates, and reviewing inheritance tax to support broader social care reform. While many of these ideas remain in the proposal stage, the direction is clear, a stronger focus on wealth taxation, housing affordability and planning reform. At the same time, Burnham’s pledge to launch the largest council house building programme since the Second World War, along with higher-density urban development and brownfield regeneration, would represent a major intervention in housing policy. Whether these reforms ultimately encourage investment or create a period of hesitation will depend on their design, rollout and the confidence they generate among investors.

In this context, the outlook for UK and European real estate capital markets appears much more positive. Listed real estate companies continue to trade at discounts to their underlying asset values, drawing growing interest from international investors, private equity and sovereign capital. Public-to-public REIT consolidation, such as the battle between ProLogis and Segro, is expected to pick up as firms seek greater scale, liquidity and operational efficiency. While smaller listed funds keep assessing mergers, wind-downs or other strategic options. US capital, in particular, is likely to stay very active as investors look for exposure to high-quality logistics, living sectors, data centres and prime offices at valuations that still compare well with key North American markets.

For boards, executives and investors, the second half of 2026 will likely be defined by how well they manage both opportunity and uncertainty. Political change could reshape taxation, planning and housing policy, while capital markets seem ready for another cycle of transactions and consolidation. Those organisations that engage early with policymakers, communicate their investment and development strategies clearly, and maintain strong ties with investors and communities will be best placed to take advantage of the next market phase. In a setting where policy and capital are becoming ever more connected, strategic communication and stakeholder engagement will matter as much as financial performance in shaping long-term success.

ESG reputation and the shift from pledges to proof (Andrew Adie, MD, Strategy and Corporate Communications) 

As we enter the second half of 2026, much of the attention will be on geopolitical change and risk. Climate risk is high among those concerns, highlighted by the devastating fires in France and Spain, yet it remains politically contentious. As a result, ESG and sustainability finds itself at a crossroads.

Criticism of ESG, driven by political ideology, has remained high but the underlying drivers for corporate action on sustainability and social impact have not gone away.

Businesses are facing growing pressure from investors, customers, employees and regulators to demonstrate how they are managing climate risk, strengthening supply chains, providing strong ethics and governance and creating long-term value. As a result, many organisations are moving away from talking about "ESG" as a standalone concept and instead focusing on resilience, competitiveness and business performance.

For corporate affairs teams, this creates a new challenge. Communicating too proactively can expose organisations to accusations of greenwashing, while saying too little risks creating a vacuum that others may fill. In this environment, credibility matters more than ever and all stakeholders (from politicians and the public to media and partners) want evidence of progress and impact, not mere promises on future commitments.

The months ahead offer two major opportunities for engagement. Climate Week NYC in September will bring together global business, investment and policy leaders to discuss the future of the low-carbon economy, while COP31 in Antalya in November is expected to focus heavily on implementation, climate finance and delivering against existing commitments.

Companies should view these events as more than communications opportunities. They are valuable forums for networking, understanding stakeholder expectations, building relationships and demonstrating tangible action. Businesses best placed to protect and enhance their reputation will be those that focus on substance rather than vibes. While the debate around ESG may continue, the importance of responsible business remains key to successful reputation risk management.

Financial services: What can the UK’s largest sector expect as it plans for the second half of 2026 (Sally Walton, MD, Strategy and Corporate Communications) 

Over the next six months, the UK's financial services sector will be watching closely to see how Andy Burnham's government translates its economic agenda into policy. After a first half of the year dominated by geopolitical tensions, volatile bond markets and shifting US policy expectations, attention is now turning back to the domestic outlook with one burning question: how will Burnham’s ‘reset’ ultimately impact inflation over the long term?

Burnham has pledged to drive regional growth, reindustrialise Britain and increase long-term investment, signalling a more active role for government in the economy which may not be received with gratitude by the many business heads who have been looking to Downing Street for stability, not meddling. 

Despite the current unknowns, this still presents opportunities, as well as challenges. Greater spending on infrastructure, regional development and defence could unlock demand for private capital, whilst a stronger focus on consumer outcomes may reshape the regulatory landscape at a time when the FS sector is taking steps to nurture a culture of investment among UK consumers.

A key priority for the government will be maintaining the confidence of bond markets. The spectre of Truss still looms large, and investors will be looking for reassurance that Burnham’s ambitious spending plans can be balanced with fiscal discipline, ensuring borrowing costs remain under control and confidence in the UK is preserved.

Attention will then turn to the next phase of the government's investment agenda. Following the emphasis placed on the Invest for the Future campaign, Burnham must provide clarity on how the government intends to encourage long-term investment into UK businesses, infrastructure and productive assets.

Tax policy will bring potential stumbling blocks. With spending commitments continuing to grow, further tax changes cannot be ruled out, creating ongoing uncertainty for businesses and investors alike which tends to result in long term inaction – which is very unhelpful for an economy - as corporates wait to find out what comes through in the Budget before making any big decisions around spending or hiring.

Finally, all of this comes as AI continues to reshape the labour market and financial services industry, adding another layer of complexity for policymakers and businesses alike as the country moves into somewhat uncharted waters. The coming months will be defined by whether the government can maintain market confidence, provide policy certainty and create the conditions needed to support long-term economic growth – no small ask, and the winners may well be those who stop waiting for calmer waters and instead learn to ride the waves.

From caution to action: Why M&A is entering a new era (Elisabeth Cowell, Senior Counsel, Financial Advisory)

For much of the past two years, the defining characteristic of the M&A market has been caution. Higher interest rates, persistent inflation, geopolitical volatility and heightened regulatory scrutiny combined to create a challenging backdrop for transactions.

Transactions that appeared strategically compelling often struggled to progress as buyers and sellers disagreed on value, while private equity firms focused on managing existing portfolios rather than pursuing new deals. According to McKinsey, deal activity remained uneven through much of 2025 as companies struggled to reconcile strategic ambition with a highly uncertain operating environment. 

However, the next 12 months are set to be different. Rather than waiting for perfect market conditions, companies are increasingly recognising that uncertainty is a permanent feature of the operating environment. As a result, M&A is once again being viewed as a strategic tool for growth, portfolio optimisation and competitive repositioning. Boards are becoming more willing to pursue acquisitions, divestments and transformational transactions despite ongoing economic and geopolitical challenges. This is because in many sectors, organic growth opportunities remain constrained, making acquisitions an increasingly attractive route. We are also seeing a renewed focus on portfolio optimisation, with companies reassessing whether all parts of their businesses continue to fit their long-term strategic objectives. According to McKinsey, momentum began building through the second half of 2025 and is carrying into 2026, with companies increasingly viewing M&A as a strategic necessity rather than a discretionary option.

A key driver will be the growing pressure on private equity firms to realise investments and return capital. Following several years of subdued exits, large inventories of ageing portfolio assets have accumulated across the industry, creating a powerful incentive to accelerate realisations through trade sales, sponsor-to-sponsor transactions, secondaries and continuation vehicles. The improving health of secondary markets, noted by both Lazard and market participants, is providing additional confidence that assets can be sold and liquidity generated.

At the same time, shareholder activism is becoming increasingly intertwined with M&A. Historically, activist campaigns often focused on governance matters, board composition or capital allocation. Today, however, activists are increasingly pursuing strategic and transactional outcomes. According to Cleary Gottlieb's review of the 2026 proxy season, M&A-related demands – including calls for company sales, break-ups, spin-offs and strategic reviews – have become the single most prominent activist objective. Activists are increasingly targeting companies trading at persistent discounts or those perceived to have underappreciated assets and are pressing boards to accelerate value crystallisation.

This trend is particularly relevant in the UK market, where many listed companies continue to trade at persistent valuation discounts. Investment trusts, listed private equity vehicles and diversified groups have become especially vulnerable to pressure from investors seeking more decisive action to close valuation gaps. Boards are finding that simply arguing a company is undervalued is no longer sufficient; investors increasingly want to see a credible pathway to unlocking that value.

Artificial intelligence is also emerging as a powerful driver of transaction activity. Over the past two years, organisations largely focused on integrating AI into existing operations. Increasingly, however, companies are using acquisitions to secure technology, data and specialist capabilities that would be difficult, expensive or time-consuming to build organically. As a result, technology and AI-related acquisitions are expected to remain a major source of deal activity. McKinsey identifies technology- and AI-driven acquisitions as one of the defining transaction themes of the current cycle, reflecting the growing importance of these capabilities to long-term competitive advantage. 

The defining shift is clear: the market is moving from caution to execution. The question facing boards is no longer whether conditions are perfect for M&A, but whether they are sufficiently prepared to use transactions proactively to create value. Those that can articulate a clear strategy, move decisively and communicate effectively are likely to be the greatest beneficiaries of the next phase of the M&A cycle.