Corporate climate transition plans in the Australian superannuation industry

The financial sector is entering a new era in which climate risks and opportunities are no longer a longterm consideration, but a near-term core financial risk and strategic priority.

This paper examines how Australian superannuation funds – collectively among the largest institutional investors globally – are evolving their investment and stewardship practices to respond to the transition toward a net zero emissions economy.

Through desktop research and direct engagement with nine major Australian superannuation funds, Climateworks Centre explores how superannuation funds are using corporate climate transition plans as part of their investment decision-making.

We found that:

• Superannuation funds are now seeking climate-related information from their exposed investee companies that goes beyond emissions targets and stated ambition, expecting credible corporate climate transition plans that detail how companies intend to reach their targets.
• Superannuation funds use corporate transition plans to help differentiate companies within a sector and determine which are future-ready, assessing the feasibility and consistency of their strategy.
• Transition plan disclosures help some superannuation funds apply climate-related negative and positive screening to select companies they will invest in and engage with, versus companies they will exclude from their investible universe.
• Transition plans already play a key role in informing superannuation funds’ stewardship priorities and escalation pathways, particularly when undertaking intensified company engagement and voting at companies’ meetings.
• As transition plans slowly evolve toward more integrated plans, superannuation funds are starting to assess interconnected risks and to engage with portfolio companies on a range of matters beyond companies’ emissions reductions, including policy advocacy, physical risks and adaptation, and beyond-climate considerations, such as nature-related issues and societal impact.

With supportive policy action, superannuation funds have a growing opportunity to fully embed corporate transition plans into investment decision-making.

As mandatory climate-related financial reporting matures and Treasury guidance on climate transition planning is released in 2026, the availability and credibility of these plans will increasingly shape how funds assess risk, steward capital and deliver sustainable long-term returns.

For superannuation funds, embedding systematic assessment and use of corporate transition plans is not only a climate imperative, but a core fiduciary responsibility to protect members’ long-term financial interests.