To help grow and protect its members' retirement savings, HESTA is calling for Australia's largest companies to strengthen their focus on three priority areas including a new investment focus on global resilience, alongside the themes of climate change and natural capital, and gender equality and decent work.
In its sixth annual letter to ASX300 companies ahead of AGM season, the $99 billion industry fund signalled these priority areas would be at the forefront of its engagement with companies this financial year.
HESTA CEO Debby Blakey said the outreach to Chairs and CEOs formed part of the fund's commitment to active ownership in support of the delivery of strong long-term returns.
"Our commitment to responsible investing is vital to how we aim to deliver strong, long-term investment performance for our members," Ms Blakey said.
"We are increasingly focused on global resilience and how companies adapt to both global risks and emerging opportunities, driven by geopolitical conflicts, economic shocks, cybersecurity threats, and transformative technologies such as AI.
"With new risks and opportunities quickly emerging, we encourage companies to ensure their Boards have the right mix of skills to handle these challenges and to plan for a range of future business scenarios.
"Building strong companies and a resilient economy requires leadership to recognise these risks and develop a culture that embraces change."
Ms Blakey said a continued focus would be required by companies and investors to help accelerate decarbonisation, and to halt and reverse nature loss.
"Through our investments we directly engage with company leadership to push for greater climate action and transparency. This year a focus of our climate engagement will be encouraging companies to advocate for ambitious national targets and set strategies aligned with upcoming sector decarbonisation pathways.
"We also urge companies to assess their exposure to nature-related risks and opportunities, including how these intersect with climate change, to better understand their material impacts and dependencies."
The letter also details the Fund's focus on advancing gender equality and supporting decent work for the delivery of value to both companies and the broader economy.
"Prioritising decent work - including flexibility and fair conditions - and actively managing human rights risks in operations and supply chains - alongside adopting 40:40:20 gender targets across boards, executive teams, and workforces by 2030, is critical to building sustainable businesses," Ms Blakey said.
"These efforts not only attract and retain talent but also foster innovation, help close the gender pay gap and drive stronger financial performance and economic growth.
Ms Blakey said the fund greatly valued its ongoing engagement with board directors and senior management as a core part of its active ownership approach.
"We look forward to continuing our constructive engagement with companies throughout the year ahead on behalf of our members," she said.
