Australian pension funds push for more ESG disclosure

Research from the Australian Council of Superannuation Investors (ACSI) found that 33% of the top 200 companies still sit within the ACSI's lowest two categories when it comes to ESG reporting. One out of three companies has either very basic reporting or none at all. As Australia's $2tn superannuation industry continues to grow, super funds are gaining more power to push for improved disclosure on how their members' money is spent. The Financial Services Council (FSC) and ACSI this week launched a new ESG guide for Australian companies, outlining a framework to disclose the information to shareholders. Since 2014, the ASX corporate governance principles have required companies to disclose material exposure to economic, environmental and social sustainability risks and how they are being managed.

One out of three ASX 200 companies has poor disclosure when it comes to reporting environmental, social and governance practices – a trend that is set to change as superannuation funds increase the pressure on company compliance.

Sally Loane, chief executive of the Financial Services Council (FSC), said company boards will also increasingly play a role in ramping up the ESG disclosure of Australia's 200 biggest businesses.

Sally Loane, chief executive of the Financial Services Council, says ESG reporting is a must-have for companies. Credit: Louie Douvis

"Yes, it's very much, I think, board-driven, board-led," Ms Loane said.

"ESG reporting is a journey, it started many years ago and it's getting to the point now where it's becoming a must-have for companies and I think [there is] going to be pressure from investors," Ms Loane said.