Page 14 - Ausbil 2024 Annual ESG Report

Looking ahead: 2025
In 2025, we will be paying close attention to capital expenditure on renewable energy technologies and engage with companies on progress against climate change targets set by individual companies. In some cases, companies have embedded climate change targets into their executive remuneration structures, which signals firm commitment. Ausbil remains a member of Climate Action 100+ as well as IGCC, and climate change remains a long-standing engagement theme for our individual company engagements.
Trade politics and human rights-focused regulatory change
Whether or not trade politics or genuine concern for human rights issues is the prime driver, there has been an increase in import bans (already in effect or to come into effect soon) of goods made by forced labour. For instance, the US, Canada and Mexico have such bans in place and the EU has committed to introduce such a ban. In Australia, such legislation has been drafted and discussed in Canberra in the past and this could be resurrected in 2025, along with a discussion and push for mandatory human rights due diligence. The latter is expected to come into effect for large companies operating in the EU in 2027.
The increased demand for decarbonisation can also cause friction between the ‘E’ and the ‘S’ in ESG, particularly in terms of solar panels, which are often manufactured in locations associated with strong allegations of forced labour.
In 2025, we might also see changes made to the Australian Modern Slavery Act. The government has responded to the 30 recommendations from the statutory review, indicating in late 2024 that Australia had its first Federal Anti-Slavery Commissioner appointed. The latter will likely contribute to increased awareness of the issues in global value chains, thereby also increasing reputational risks for laggards, while the former means possible regulatory changes and opportunities for investors to partake in consultations with government in 2025.
Ausbil will continue to engage with companies to navigate the challenges and encourage companies to adopt what is considered global best practice on responsible sourcing. Ausbil also remains a steering committee member of IAST-APAC and chairs RIAA’s Human Rights Working Group. Ausbil also acts as an advisor to the NSW Anti-Slavery Commissioner and has several multi-year engagements with ASX-listed companies on human rights risk management in operations and supply chains.
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Annual ESG Report l March 2025