How Rest invests responsibly

Ever wanted to know more about responsible investing and how Rest does it? 

Rest’s goal is to grow your super savings for retirement. In focusing on your financial future, we also support actions that build a better, fairer, more sustainable world – from investing in clean energy to advocating for a fairer super system. Our focus is to grow your super savings in a responsible way. We have four key investment beliefs that guide our approach and decision-making – and being a responsible investor is one.

“Be responsible investors - we support actions for a more sustainable future. We consider climate change and other environmental, social and governance (ESG) factors in our investment decisions.”

In being responsible investors, the following six pillars form the basis of our overall approach – let’s have a look at each one.

Rest’s six responsible investment pillars*

Governance

Rest’s board considers material ESG risks and opportunities in its review of investment strategy and asset allocation. Rest’s Responsible Investment team helps our portfolio managers assess ESG risks and ensure that ESG frameworks are in place throughout the investment process. They also provide assessment and monitoring, as appropriate, of the consideration of ESG risks.

ESG integration

At Rest, we consider and integrate ESG factors into our investment decisions to reduce risks, improve returns and maximise investment opportunities in the best financial interests of our members.

This applies to how we build the portfolio, and select, appoint, and monitor our investment managers. We believe that investment managers who identify and effectively manage material ESG risks and opportunities will enhance long-term financial performance.

Active ownership

At Rest, we can use our ownership rights to influence the activities or behaviours of the companies we invest in to help improve their investment performance. In our view, effective engagement can bring higher financial returns, and it ensures that the companies or investment managers that we invest with understand our approach to long-term returns for our members.

Where and as required, we undertake direct engagement with companies to resolve concerns as they arise, and we participate in collaborative engagement. Consistent with our members’ best financial interests, when we vote at listed company meetings, our activities aim to protect and enhance sustainable, long-term value creation for our members.

Screening, thematic and impact investing

Screening is a process that applies defined rules to determine what investments are permitted. The screening rules could be related to a variety of factors - financial returns, and ESG considerations are examples.

Screening can be a complex process. For detailed information on our screens and how the rules, exceptions and limitations are applied across our different investment options (excluding our indexed options), refer to Rest’s Investment Guide and the relevant Product Disclosure Statement at rest.com.au/pds.

Thematic investing involves targeting an investment for a sustainability theme like renewable energy, sustainable agriculture, or investments aligned with the Paris Agreement or United Nations Sustainable Development Goals.

Impact investments at Rest are those investments made in members’ best financial interest to provide a financial return while also providing a positive and measurable impact to society and/or the environment. We differentiate between impact aligning and impact generating investments.

Impact aligning investments

Investment strategies where the investment manager invests in companies or assets that are aligned with sustainable development goals, but the investment strategy lacks meaningful intentionality, investor contribution, and impact measurement.

Impact-generating strategies

These are strategies that go beyond simply investing in companies or assets that are aligned with sustainable development goals. These are strategies where investor involvement is instrumental in enhancing the impact of companies and where the investment manager can demonstrate how they aim to intentionally generate positive, measurable social and/or environmental impact beyond existing norms and standards.

Rest is targeting a 1% allocation of its total funds under management to impact-generating investments by 30 June 2026.

Collective responsibility and advocacy

Collaborative engagements occur when groups of investors work together, sometimes through a membership organisation. This is an effective method for protecting or enhancing our members’ retirement savings – we can increase our influence by pooling resources and information sharing. Sharing knowledge within the industry is essential to addressing systemic ESG issues, such as climate change, and in achieving sustainability outcomes. Rest works with a number of collaborative organisations such as the Australian Council for Superannuation Investors (ACSI), the Investor Group on Climate Change (IGCC), the Principles for Responsible Investment (PRI) and the Responsible Investment Association Australasia (RIAA) in support of our responsible investment approach.

Disclosure and transparency

Responsible investment disclosures aim to provide transparency and confidence to our members in respect of the investment actions undertaken on their behalf. This includes information about the Rest’s ESG regulatory compliance obligations, proxy voting, exclusions and climate change – all of which may be viewed via Rest’s Responsible Investment Policy, annual report, Sustainability report, and website.