Rest makes first impact investment in listed equities to harness decarbonisation opportunities

Rest, one of Australia’s largest profit-to-member superannuation funds, has advanced closer to its impact investment target by making its first impact investment in the listed equities asset class.

Rest has made an initial investment of AUD $150 million into an international listed equities mandate with global investment manager Ninety One, which aims to achieve long-term total returns by investing in companies that are expected to contribute to the transition to a lower-carbon global economy. It does this by focusing on businesses in three key areas of decarbonisation: renewable energy, resource efficiency and electrification.

Kiran Singh, Rest’s Head of Listed Assets said that impact investments were expected to help drive the innovation and new technologies needed to enable the energy transition to net zero by 2050.

"Through these investments, we aim to help our members grow their retirement savings with strong, long-term investment returns and also generate measurable positive environmental impacts," said Mr Singh.

"The transition to a lower-carbon economy is presenting us with new investment opportunities to accelerate returns for our members’ retirements. We believe it’s very important that our members have exposure to companies with growth leveraged to decarbonisation solutions.

Mr Singh added that listed impact investment opportunities offered exciting prospects for superannuation funds.

"While impact investments are more commonly found in private markets, the opportunities in public markets are rapidly evolving, with new strategies and opportunities constantly emerging," Mr Singh said.

"We believe listed equities can play an important role in meeting our objective of a one per cent allocation to impact investments across the fund’s total portfolio by 2026, and can complement our existing private market impact investments."

Justin Cowper, Head of institutional business for Ninety One in Asia Pacific and the Middle East, said: "Sustainability is becoming more important to forward-thinking Australian Institutional investors, such as Rest, who are pursuing strong returns in investments that are also expected to positively contribute to measurable environmental outcomes to make the world a better place.

"We are fully aligned with this philosophy and as such, are ecstatic to have partnered with Rest on our Global Environment Equity Strategy, which looks to provide superior investment returns in the medium to long term through its focus on decarbonisation.

"We look forward to partnering more with Rest as they continue to evolve their market-leading thinking on what is an essential topic for all investors."

Rest defines 'impact investments' as investments made in members’ best financial interests, to provide a financial return and a social and or environmental return.

Rest made its initial impact investments into the unlisted infrastructure Palisade Impact Fund, with specialist private equity firm ARCHIMED, and recently made a commitment to the agriculture-focused Cibus II Fund.