Recommendations
The Australia roadmap makes recommendations in four categories:
1. Regulatory action: APRA should update paragraphs 34 and 36 of Prudential Practice Guide SPG 530 Investment Governance to clarify that ESG issues are material to risk and return analysis.
2. Stewardship and intermediation:
a. The FSC should continue to work with Australian asset managers to strengthen stewardship expectations.
b. Stewardship expectations could be formalised through the development of a code.
c. Australian asset owners should incorporate stewardship expectations in the selection, appointment and monitoring of asset managers.
3. Corporate reporting: ASX should continue to enhance corporate reporting and ASIC should monitor the quality of disclosure.
4. Investor education: Trustee boards should ensure capacity and competence on ESG issues.
1. Regulatory action: APRA should update paragraphs 34 and 36 of Prudential Practice Guide SPG 530 Investment Governance to clarify that ESG issues are material to risk and return analysis.
2. Stewardship and intermediation:
a. The FSC should continue to work with Australian asset managers to strengthen stewardship expectations.
b. Stewardship expectations could be formalised through the development of a code.
c. Australian asset owners should incorporate stewardship expectations in the selection, appointment and monitoring of asset managers.
3. Corporate reporting: ASX should continue to enhance corporate reporting and ASIC should monitor the quality of disclosure.
4. Investor education: Trustee boards should ensure capacity and competence on ESG issues.
Implementation
The project team is engaging on the following priority for 2018 and beyond:
- APRA should update paragraphs 34 and 36 of Prudential Practice Guide SPG 530 to clarify to superannuation funds that ESG issues are material to risk and return analysis.
