May 15, 2025
Australian superannuation funds face increasing accountability in managing climate-related financial risks. Detailed disclosure requirements, evolving regulatory standards, and fiduciary duties amplify the need for precise emissions data—particularly at the holding level. Here are three critical reasons why Australian superannuation funds must prioritize obtaining granular emissions information:
1. Fiduciary Responsibility
Superannuation fund trustees have a fiduciary duty to effectively manage all financial risks—including climate-related risks. Comprehensive management demands accurate, detailed data at the holding level, particularly in private market investments, to avoid unintended exposures that conflict with stated investment policies. Read more in our related article.
2. Regulatory Compliance with AASB S2
The Australian Sustainability Reporting Standard AASB S2 mandates detailed climate-related disclosures structured around Governance, Strategy, Risk Management, and Metrics & Targets. Precise holding-level emissions data is foundational for scenario analysis, risk management, and metrics calculation, enabling comprehensive regulatory compliance. Read more in our related article.
3. Mitigating Legal and Reputational Risks (ASIC Enforcement)
Recent ASIC enforcement actions against Australian superannuation funds illustrate significant consequences of inadequate holding-level transparency. Without clear insights into specific holdings, funds risk breaches of ESG-related commitments, potentially facing severe legal penalties and reputational harm. Read more in our related article.
Why Holding-Level Information is Challenging to Obtain
Obtaining holding-level data is challenging due to several critical factors:
Outdated Investment Mandates: Original investment mandates rarely included explicit requirements for emissions reporting, allowing fund managers to decline such requests.
Resource-Intensive Process: Collecting detailed emissions data is time-consuming, and fund managers typically lack compensation for the extensive effort involved.
Fragmented Requests: Multiple, uncoordinated information requests arrive at fund managers in varying formats and timings, overwhelming operational resources and complicating compliance.
These challenges create a fragmented and inefficient data environment, increasing the risk of compliance failures and operational inefficiencies.
The Need for an Industry-Wide Solution
An industry-wide solution is necessary to address this fragmentation and enhance holding-level data consistency and accessibility, providing comprehensive and reliable emissions information.
Pathzero's Role in the Market
Pathzero directly addresses these industry-wide challenges by unifying asset owners, fund managers, and reporting entities on a secure platform designed for effective emissions data management. Pathzero specifically:
Standardizes data requests, reducing duplication and confusion.
Provides tailored calculation tools to accurately estimate emissions.
Ensures seamless integration of data from diverse sources.
Enables secure multi-party disclosures to simplify compliance and reporting.
Through these capabilities, Pathzero empowers Australian superannuation funds to effectively manage climate-related financial risks, meet regulatory obligations, and safeguard fiduciary integrity.