Ethical Super Investment

Q: What is Rest’s approach to responsible investing?

Rest has investment beliefs that guide and shape how we manage our members' retirement savings. One of these is 'Responsible investment adds value'. As a long-term global investor, Rest considers and integrates ESG factors to reduce risks, improve returns and maximise investment opportunities.

Q: How do I choose or switch to the Sustainable Growth investment option?

If you’ve decided to change your investment option and Sustainable Growth is right for you, will also need to decide if you want to switch your either current account balance only, the way future transactions are applied, or both. You can switch your investment option via the Rest app. Go to My Investments in the Menu and select Manage investments. You can also switch online. Log into MemberAccess - go to Investment and select Change investments.

Invest ethically with our Sustainable Growth option

What you do with your super can have an impact on your financial future, and the future of the planet. At Rest, we offer an investment that doesn't cost the planet or your pocket, and it's called Sustainable Growth.

Ethical super at Rest means the Sustainable Growth option doesn't invest in shares of companies that may be harmful, like fossil fuel producers, and we do invest in companies that make a positive contribution to the environment and society, like companies that generate renewable energy.

Please refer to the ‘Screens and exclusions’ section below and the Investment Guide for more details, including on the ESG factors that Rest takes into account in our investment process.

1. The screens apply to listed Australian and Overseas shares. Please refer to the drop-down box below for further information, including on our screens and responsible investment approaches applied to other asset classes.

2. 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 the exclusion applied across all of Rest’s actively managed investment options, which do not invest in companies directly involved (i.e. 0% revenue threshold) in the production of tobacco and nicotine alternatives.

Details

The following provides an excerpt from the Rest Investment Guide. For further information, see Investment Guide.

Sustainable Growth - Australian Shares and Overseas Shares

Sustainable Growth’s investment in listed Australian and Overseas shares excludes companies that do not meet certain negative ESG screens and is positively weighted towards companies that are considered to have strong practices in or to be positive contributors towards:

environmental sustainability and resource efficiency;
equitable societies and respect for human rights;
accountable governance and transparency.

We may engage investment managers or use information or methodologies sourced from service providers to help identify investments that are suitable for Sustainable Growth.

The exclusions applied to both Sustainable Growth option’s listed Australian and overseas shares’ allocation are outlined below. These exclusions are applied by our investment manager(s), who apply agreed criteria and screens (including against third-party ratings and indices) to assess the relevant investments made on Rest’s behalf against the exclusion criteria.

These exclusions apply to listed Australian and overseas shares only and do not include private equity. There are currently no private equity investments held by the Sustainable Growth option.

Sustainable Growth may still invest in companies (typically with diverse revenue streams) that invest in, lend money to, buy from or sell products or services to excluded companies. These might include:

banks who lend money to an excluded company,
companies that sell technology systems to an excluded company, or
companies that sell equipment and services to an excluded company, for example, companies that sell equipment and services for power generation from fossil fuels.

Further discretionary screens may be applied in certain circumstances, for example when the activities of the company are identified as being so intolerable that exclusion is justified.

Sustainable Growth’s investment in Australian and Overseas Shares also aims to have a lower weighted average carbon intensity (WACI) (measured in tonnes of carbon emissions (scope 1 and 2) per million dollars in sales in US dollars) compared to their benchmarks, ASX300 and MSCI World ex Australia respectively.

We avoid investments in	Details
Environmental Damage	A company identified as materially contributing to serious environmental issues and environmental controversies.
Fossil Fuels	A company which: Owns fossil fuel (thermal coal, metallurgical coal, oil and gas) reserves Derives any revenue (i.e. 0% revenue threshold) from oil and gas exploration, prodution and related activities (pipeline transportation, refineries, and equipment and services for oil and gas exploration and production) power generation from thermal coal, oil and gas* (however, Sustainable Growth may still invest in companies that sell equipment and services for power generation) the leasing, mining and processing of coal and coke; and uranium, radium, and vanadium mining are also excluded. *includes oil sands and arctic oil & gas
Unethical supply chain practices	A company identified as materially contributig to human rights and labour rights issues and controversies in their supply chain.
Animal Cruelty	A company involved in commercial factory farming, live animal export (Australian shares only), raises animals for live export (Australian shares only) or conducts testing on animals for non-medical reasons, except when required by regulation.
Workplace Discrimination and Diversity	A company identified as materially contributing to diversity and inclusion issues or controversies in the workplace, and/or inadequate responses to and prevention of workplace discrimination.
Remuneration	A company identified as having poor practices in remuneration, such as excessive executive remuneration.
Gambling	A company that generates over 5% of annual revenue from gambling activities.
Controversial and Nuclear weapons	A company involved in developing, producing, and maintaining nuclear weapons, nuclear weapons components and nuclear weapons delivery platforms, including those designed for dual-uses. A company involved in the production of controversial weapons (cluster bombs, landmines, uranium weapons and chemical and biological weapons on their key parts) (this screen is also applied across Rest's other actively managed investment options).
Palm Oil	A company that produces palm oil or distributes oil products (but excluding the manufacture or sale of products that use palm oil as an ingredient).
Tobacco	A company that generates over 5% of annual revenue from the retail sale of tobacco and nicotine alternative (e.g. vaping devices and e-cigarettes) products. A company involved (i.e. 0% revenue threshold) in the production of tobacco and nicotine alternatives (this screen is also applied across Rest's other actively managed investment options).

We avoid investments in	Environmental Damage
Details	A company identified as materially contributing to serious environmental issues and environmental controversies.

We avoid investments in	Fossil Fuels
Details	A company which: Owns fossil fuel (thermal coal, metallurgical coal, oil and gas) reserves Derives any revenue (i.e. 0% revenue threshold) from oil and gas exploration, prodution and related activities (pipeline transportation, refineries, and equipment and services for oil and gas exploration and production) power generation from thermal coal, oil and gas* (however, Sustainable Growth may still invest in companies that sell equipment and services for power generation) the leasing, mining and processing of coal and coke; and uranium, radium, and vanadium mining are also excluded. *includes oil sands and arctic oil & gas

We avoid investments in	Unethical supply chain practices
Details	A company identified as materially contributig to human rights and labour rights issues and controversies in their supply chain.

We avoid investments in	Animal Cruelty
Details	A company involved in commercial factory farming, live animal export (Australian shares only), raises animals for live export (Australian shares only) or conducts testing on animals for non-medical reasons, except when required by regulation.

We avoid investments in	Workplace Discrimination and Diversity
Details	A company identified as materially contributing to diversity and inclusion issues or controversies in the workplace, and/or inadequate responses to and prevention of workplace discrimination.

We avoid investments in	Remuneration
Details	A company identified as having poor practices in remuneration, such as excessive executive remuneration.

We avoid investments in	Gambling
Details	A company that generates over 5% of annual revenue from gambling activities.

We avoid investments in	Controversial and Nuclear weapons
Details	A company involved in developing, producing, and maintaining nuclear weapons, nuclear weapons components and nuclear weapons delivery platforms, including those designed for dual-uses. A company involved in the production of controversial weapons (cluster bombs, landmines, uranium weapons and chemical and biological weapons on their key parts) (this screen is also applied across Rest's other actively managed investment options).

We avoid investments in	Palm Oil
Details	A company that produces palm oil or distributes oil products (but excluding the manufacture or sale of products that use palm oil as an ingredient).

We avoid investments in	Tobacco
Details	A company that generates over 5% of annual revenue from the retail sale of tobacco and nicotine alternative (e.g. vaping devices and e-cigarettes) products. A company involved (i.e. 0% revenue threshold) in the production of tobacco and nicotine alternatives (this screen is also applied across Rest's other actively managed investment options).

^Rest’s ESG analysis, including determining and applying exclusions and restrictions, on investments may be impacted by limitations in research of third party data providers. Temporary data quality issues (eg delays or inaccuracy) may arise from time to time, and this may result in the Sustainable Growth option holding investments that do not meet the above criteria, however this is typically short term. If an existing investment within the Sustainable Growth option is identified as subsequently not meeting the criteria of an applicable exclusion, Rest will seek to dispose that investment in the best financial interests of its members having taken into consideration relevant factors such as liquidity, market conditions and investment fund structure.

Rest monitors its screens and exclusions including those that apply to Sustainable Growth on a regular basis.

Sustainable Growth - Debt

The debt allocation is positively weighted towards green, social and sustainability bonds (where the proceeds from the bonds contribute to positive environmental or social outcomes as outlined in International Capital Market Association (ICMA) principles).

Sustainable Growth - Property

Sustainable Growth invests in property investments which have demonstrated a score of average or above in the Global Real Estate Sustainability Benchmark (GRESB) Real Estate Assessment, a global ESG benchmark and reporting framework for investments in real estate. Where GRESB is not applicable, Sustainable Growth’s property investments are required to achieve a high environmental rating from a recognised green building rating tool that is administered by a World Green Building Council (WGBC) member.

Sustainable Growth will favourably consider property investments that are signatories to the WGBC Net Zero Carbon Buildings Commitment. The WGBC Commitment requires that all buildings within the direct control of a signatory’s property portfolio be net zero carbon in operation by 2030 through energy efficiency, purchasing renewable power and carbon offsets.

Sustainable Growth - Infrastructure

Sustainable Growth invests in infrastructure investments which have a credible net zero by 2050 target† or are committed to setting targets for greenhouse gas emission reduction grounded in climate science as assessed by the Science Based Targets initiative.

It will exclude infrastructure investments in accordance with the Fossil Fuels screen outlined above in respect to the Australian Shares and Overseas Shares.

† In assessing some exclusions or criteria for inclusion in Sustainable Growth (including the credibility of a company’s or strategy’s net zero by 2050 emissions target) third-party research is only available for listed companies or certain industries. Exclusions or criteria may be assessed by the Responsible Investment team (based on industry recognised frameworks) where third-party research is limited or not available.

Sustainable Growth – Alternatives

Alternative assets include a broad range of asset types, including agriculture. The Sustainable Growth option includes alternative investments where the investment strategy has a credible net zero emissions by 2050 target or are committed to setting targets for greenhouse gas emission reduction grounded in climate science as assessed by the Science Based Targets initiative, or which comply with a relevant third-party sustainability certification system.

What is an ethical super investment?

Why does Rest have an ethical investment option?

Our members told us they wanted an ethical and sustainable option through a survey issued to around 650,000 Rest members in December 2020.

By engaging with our members, we gave them an active role in shaping the name of the option, as well as the types of assets that would be included and excluded.

The key findings of our member research included:

77 per cent of respondents expressed interest in Rest developing an ethical investment option
Sustainable Growth was the preferred name of the option
Key negative exclusions included companies involved in environmental damage, unethical supply chains and animal cruelty
Key positive inclusions were to have exposures to companies involved in clean energy, energy efficiency and climate action

These findings helped determine the assessment criteria for viable investments for this option.

Please read our Sustainability, Responsible Investment and Climate Change Supplement

What is Rest’s approach to responsible investing?

How do I choose or switch to the Sustainable Growth investment option?

Investment options

How you choose to invest your super savings could make a difference to how much money you could have in the future.

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Responsible investment at Rest

Responsible investment can help our members grow their super while contributing to a more sustainable future

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Sustainability at Rest

Members are at the heart of Rest. We are focused on your financial future, and we support actions that will build a better, fairer and more sustainable future for you

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Invest ethically with our Sustainable Growth option