Where companies with material climate risks consistently fall short of expectations (see checklist below), ACSI may recommend members vote against directors of ASX200 companies, on a case-by-case basis.

ACSI’s recommendations will focus on the individual directors most accountable for oversight of climate-change related risks, such as company Chairs, and the Chairs of the Risk and Sustainability committees or similar.

The Australian Council of Superannuation Investors (ACSI) has outlined its policy toward climate risk and how it expects the companies its members invest in to behave in this respect. This is a useful checklist to determine if companies and their directors are likely to be a target. Where companies face material climate-related risks, ACSI expects companies to:

• Adopt the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) risk assessment and reporting framework.
• Align corporate strategy to the Paris Agreement and the objective of net zero emissions by 2050.
• Stress-test the resilience of their portfolios and strategy against a range of plausible but divergent climate futures.
• Set Paris-aligned emissions targets
• Analyse and manage physical risk
• Plan for just and equitable transition impacts on employees, communities and other stakeholders into transition strategy and planning.

To further push this focus on climate change, ACSI is also calling for the introduction of a “Say on Climate” vote. Such a vote would bring transparency and accountability to work that ACSI already does at various levels through engagement between investors and companies.

See HERE for ACSI’s climate change policy.

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