The superannuation sector has demanded a higher level of disclosure from companies on topics including climate change, labour practices, human rights and gender diversity.
The Australian Council of Superannuation Investors (ACSI) has released its latest Governance Guidelines for Australian listed companies – and it includes a new section dealing specifically with climate change and labour/human rights.
The voting guidelines for the superannuation sector, which are revised every two years, are a "clear statement" that the sector is concerned about the environmental, social and governance (ESG) practices of ASX-listed companies, said ACSI.
On climate change, the ACSI guide said superannuation funds expect to understand whether a company can "successfully identify and manage the climate risks and opportunities it faces".
In addition, companies should be stress testing their businesses against a "range of divergent climate futures, including a 2°C scenario".
Super funds are also looking for companies to identify low-carbon opportunities and achieve costs savings through more efficient practices, said ACSI.
When it comes to labour and human rights, listed companies should "actively engage with its employees, customers, supply chains and other relevant stakeholders to understand and assess human rights impacts".
Companies should also be trying to mitigate the risks of poor human rights practices in their supply chains and, where possible, use their leverage to address the impacts, said the guidance.
ACSI also said it expects Australian companies to implement a 'speak up' corporate culture where employees on all levels feel free to raise concerns without blame attached.
The guidance reiterated ACSI's calls for a gender diversity target of 30 per cent of the board positions on ASX-listed companies being taken up by women.