Rest has set its roadmap to achieve a net zero carbon footprint for the fund by 2050, to ensure the long-term sustainability of members’ investments and to contribute to the goals of the Paris Agreement.
The Paris Agreement is an international initiative that seeks to keep global temperature rise this century to well below two degrees Celsius above pre-industrial levels. It also seeks to pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius.
What is a net zero carbon footprint?
Having a net zero carbon footprint refers to achieving an overall balance between the carbon emissions that you generate and the carbon emissions that are taken out of the atmosphere, whether that is through natural means, such as carbon offsets, or technological means, such as carbon capture and storage.
To do this, Rest plans to reduce the carbon intensity of our investment portfolio and operations. We aim to reduce our exposures to carbon-intensive assets, and increase our investments in renewable energy or low-carbon solutions.
The key steps we’re adopting to achieve net zero by 2050
- By 31 December 2021, we intend to divest from all listed companies that derive more than 10 per cent of their revenue from thermal coal mining – unless the company has a credible net zero by 2050 plan or science-based targets.
- We will advocate for an economy-wide reduction of emissions of 45 per cent by 2030, based on 2005 levels, particularly in order to continue reducing the Weighted Average Carbon Intensity of the equities portfolio year on year.
- We have an ambition to increase our investment in renewable energy and low-carbon assets to $2 billion by 2025.
- We are aiming to have our directly owned property assets achieve net zero carbon emissions in operation by 2030.
- By 2026, we have an ambition to allocate one per cent of the portfolio to ‘impact investments’ that generate strong returns and also provide benefits to society and the environment.
- We will regularly conduct analysis and stress testing of our portfolio against a number of different climate change scenarios, including for a society where there are net zero carbon emissions by 2050.
What this means for your employees who are with Rest
By setting a course to a net zero carbon footprint for the fund, Rest believes our roadmap will ensure the continued long-term growth of our member’s retirement savings in a lower-carbon economy.
Ultimately, we’re doing this because we believe it’s the best way to generate long-term investment returns for our members. Our analysis estimates they could be worse off at retirement if climate change continues as it is.
Our members’ retirement savings will also be contributing to a more sustainable future. More of their money will be invested in assets that will contribute to a more sustainable future, and less will be invested in assets that are fuelling climate change, like thermal coal.
This approach will open up investment opportunities as we transition to a more sustainable future and manage the financial risks of holding carbon-intensive assets.
What Rest has already done
Rest has had sustainability policies in place since 2013, and our Responsible Investment Policy and Climate Change Policies are available on our website.
Our current approach to sustainability includes how we invest responsibly, our corporate responsibilities as an organisation, and how we advocate for change on matters that are important to our members, and broader stakeholders.
Furthermore, our current sustainability strategy is aligned to five of the UN Sustainable Development Goals, including goal 13: Climate Action.
We launched our socially responsible investment (SRI) option, ‘Sustainable Growth’, earlier in 2021. This option is one of the lowest-fee SRI options available from superannuation funds, and has specific inclusions and exclusions based on ethical considerations.
Across our whole portfolio, we have excluded tobacco and controversial munitions since August 2018.
More information on our commitment to climate change
At Rest, we are passionate about the role we can play in the transition to a more sustainable, low carbon economy. For more information on our response to climate change please visit https://rest.com.au/member/investments/climate-change-statement