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Super funds fire climate warning shot

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By Lachlan Maddock
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3 minute read

The powerful Australian Council of Superannuation Investors (ACSI) has warned that companies are “moving too slowly” on climate and that it will vote against directors who don’t lift their game. 

ACSI warned that it would start voting against directors of companies who have fallen short on managing climate-related risks, saying “climate change is one of the greatest challenges facing companies and investors today.” 

“Our active and constructive engagement with ASX200 companies has led to major improvements in company practices – but there is much more to be done to address climate risk,” said ACSI boss Louise Davidson.

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“Not all companies have listened to investor expectations and in many cases, the pace of change is moving too slowly. In order to increase the focus on climate-related risks in the companies they invest ACSI may recommend members vote against the re-election of directors.”

The new considerations will be applied on a case-by-case basis and only after extensive engagement with the company, and will be focused on the individual directors most accountable for oversight of climate risk – for example, chairs of risk or sustainability committees. They will come into effect from 2022 and will initially focus on ASX 200 companies in climate-exposed sectors, including energy, utilities, and materials. 

“As the impact of climate change becomes a reality, the approach that investors take to manage these risks has to be more active,” Ms Davidson said. 

“ACSI and our members will constructively engage with companies, however, where a company fails to meet investor expectations we will take action. Our members will not shy away from this responsibility.”

ACSI has taken a leading role in engaging with companies over shortfalls in culture and governance, and was one of the voices calling for heads to role at Rio Tinto in the wake of the Juukan Gorge scandal. As part of the new considerations, ACSI has also secured a commitment for “Say on Climate” advisory votes from companies such as Woodside, Santos and Oil Search. 

“The advisory vote on climate reporting supports engagement between companies and investors as companies develop and execute climate transition strategies. The vote will allow investors to voice concerns where issues arise and provide further focus, transparency and accountability,” Ms Davidson said. 

Super funds fire climate warning shot

The powerful Australian Council of Superannuation Investors (ACSI) has warned that companies are “moving too slowly” on climate and that it will vote against directors who don’t lift their game. 

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