Aiming for a sustainable, fair economy also grows companies' long-term value and responsible shareholders will vote accordingly at upcoming meetings, investors are warning boardrooms.
Environmental, social and governance (ESG) issues have taken on fresh urgency, with mandatory climate reporting due to be phased in for large companies next year.
Last year, climate change risk, sustainability, cybersecurity and remuneration were among top concerns raised by shareholders.
Industry superannuation fund HESTA said on Monday it has written to board chairs and CEOs of the top 300 ASX-listed companies on behalf of more than one million members, 80 per cent of whom are women.
The priority areas for the fund during the upcoming 2023/24 annual general meetings (AGMs) are climate change, gender equality, decent work, and curbing biodiversity loss that is eroding the country's natural capital.
A crucial focus remains the acknowledgement by companies of the financial risks from climate change and its profound impact on the healthcare and community services sectors, HESTA CEO Debby Blakey said.
Working with companies for a growing, sustainable and inclusive economy benefits members by increasing the long-term value of Australian companies, she said.
HESTA is also campaigning for gender balance in the ASX 300 by 2030, including across board and executive teams.
For the upcoming voting season, HESTA said it would vote against some proposed directors where the board has less than 30 per cent women and against board chairs of companies employing all-male executive leadership teams.
Responsible Investment Association Australasia executive manager Dean Hegarty said climate is obviously a significant ongoing and urgent issue, and responsible investors are looking for organisations to have structures in place to deliver results.
"The time for vague promises is long gone, investors now want to see clear plans being created and executed with the reporting framework to back them up," Mr Hegarty said.
Investor expectations of top ASX companies are increasing across a range of sustainability concerns, he told AAP.
"Nature in particular is quickly emerging as a significant issue and particularly relevant to Australia where biodiversity loss is so prevalent," he said.
"Globally, in recent AGM seasons, we've seen a lot of activity targeting social issues like equality, executive remuneration and modern slavery and we'll likely see that replicated here as well."
The newly released international framework of the Taskforce for Nature-related Financial Disclosures, known as the TNFD, could be a game-changer for corporates and financial institutions.
Investors will want to see that companies understand how they are impacting nature, and what risks nature poses to them, Mr Hegarty said.
Next year, new laws will require directors at Australia's largest companies to sign off on detailed climate disclosures that will have a legal status on par with financial results.
The reporting regime will mean companies must report emissions, assess various scenarios and provide a transition plan that maps out the specific changes that will make them carbon neutral.
The climate compliance cycle will run alongside the financial reporting and auditing cycle, starting from the 2024/25 financial year.
