Rest expands Calvert sustainability mandate to focus on carbon reduction
Rest, one of Australia’s largest profit-to-member industry super funds, has expanded its enhanced responsible investment mandate with Calvert Research and Management (Calvert) to include a carbon reduction tilt that will cover Rest’s entire Australian equity portfolio.
Rest is one of Australia’s largest profit-to-member industry super funds, with around 1.9 million members and around $68 billion of funds under management[1].
In February this year, it awarded Calvert Research and Management and Parametric Portfolio Associates LLC, which are both part of Morgan Stanley Investment Management, a mandate to implement ethical and sustainable screens and tilts across its listed real assets portfolio. That portfolio included global listed infrastructure, and global and Australian listed REITs.
Under the expanded Australia equity mandate, lowering the portfolio exposures to greenhouse gas emissions was considered under a risk control framework.
Leilani Weier, Rest’s Head of Responsible Investment & Sustainability, said: “By tilting towards stocks that contribute to the realisation of a low-carbon economy we can aim to reduce our equity portfolio’s carbon emissions targetting net-zero emissions for our equity exposures by 2050. We are confident with Calvert’s capability in ESG integration, and this ongoing relationship will assist Rest in creating sustainable portfolios for the future.”
Anthony Eames, Calvert’s Managing Director of Responsible Investment Strategy, said: “We have always been keen to ensure that we tailor portfolios to our clients’ unique ESG-related priorities. For Rest, this can mean a lower carbon tilt which aims to reduce the greenhouse gases emissions in portfolios with low risk. This follows Rest’s goal, and in the context of a Your Future, Your Super benchmark.”
Daniel Vanden Boom, Managing Director of Morgan Stanley Investment Management Australia, said: “At Morgan Stanley Investment Management, we view ESG-related tilts as a logical extension of risk control. We’ve spent many years conducting research on events that could trigger volatility across global markets including the potential impact of climate related risks. “
“The necessity of tackling climate change for environmental reasons is evident and the need to consider ESG factors in investment decisions has also become increasingly clear.”
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