Rest launches low-fee ‘Sustainable Growth’ socially responsible investment option

Rest, one of Australia’s largest superannuation funds, has launched ‘Sustainable Growth’, one of the lowest-fee socially responsible investment (SRI) options on the market1, following consultation with a large portion of its 1.7 million members2.

In a first for the fund, Rest began the development of this SRI option by speaking to its members through a survey issued in December 2020. The result was a new investment option with a diversified portfolio that offers enhanced environmental, social and governance investment characteristics, and which aims to not only grow our members’ super but help protect their future too.

With total estimated investment costs of 0.36 per cent, per annum for Rest members, Sustainable Growth will be one of the lowest-fee SRI options available in the market3. It is geared towards growth assets and will aim to deliver high returns over a period of 12 rolling years.

Sustainable Growth will expand Rest’s existing range of 15 other investment options and offer members even greater choice in how they invest their super.

Rest’s Chief Executive Officer, Vicki Doyle, said: “Providing our members with a diverse range of investment options and continuing to deliver low fees remains a top priority for our fund, and it is something we are proud to offer. “

“We are dedicated to helping our members strive for their personal-best retirement outcome and felt that including their voices in the development of Sustainable Growth was imperative to the process. By speaking to our members first, we gauged the importance to them of having an SRI option available, and then gave them an active role in shaping the name, inclusions and exclusions of this new option. We got a sense of their priorities, and could see that for many Rest members, ethical investing is of significant importance.”

The survey, issued to members in December 20204, showed high demand across members for an SRI option, with more than three-quarters of respondents expressing a moderate to strong interest in the option. The survey also requested that members express their key inclusions and exclusions, many of which were considered when building the option. This framework determines the assessment criteria for viable investments for this option. Rest’s new Sustainable Growth option has an asset allocation mix of 75 per cent growth and 25 per cent defensive assets across Australian and overseas shares, property, infrastructure, bonds and cash.

In the option’s Equities Asset class, companies who are involved in labour and human rights abuses, unethical supply chains, fossil fuels, animal cruelty, gender discrimination, tobacco, gambling, palm oil, controversial weaponry, or have a recent track record of environmental damage, or excessive executive remuneration have been excluded.* The portfolio has then been positively tilted to companies who are demonstrated leaders and promote environmental sustainability and resource efficiency, equitable societies and respect for human rights, and accountable governance and transparency.

The option will invest in property assets that have demonstrated a GRESB Real Estate Assessment5 score of at least average or above. It will also invest in infrastructure assets which have integrated ESG factors and have been identified as able to help the transition to a low carbon economy6, or which have limited exposure to climate-related transition risks. The criteria for the option’s infrastructure assets also excludes investing in companies that own fossil fuel reserves, derive revenue from oil or gas exploration, production and related activities, have power generated from thermal coal, oil and gas, or lease, mine or process coal and coke.

Rest members are encouraged to explore the options available through the fund’s newly expanded investment offering, and to seek financial advice on what options may be most suitable for them.

For more information about the new investment option, click here.

*The Sustainable Growth option does not invest in companies that generate over 5% of annual revenue from gambling activities. The Sustainable Growth option does not invest in companies that generate over 5% of annual revenue from the retail sales of tobacco and nicotine alternatives (e.g. vaping devices and e-cigarettes) products. This is in addition to Rest's general exclusion of investing in companies directly involved in the manufacture of tobacco and nicotine alternatives. Click here for more information on the exclusions applied to both Sustainable Growth’s Australian and Overseas Shares' allocation.