Rest has announced an expansion to its sustainability mandate with Calvert Research and Management to include a carbon reduction tilt across the fund’s Australian equity portfolio.
Calvert and Parametric Portfolio Associates were originally awarded a mandate to implement ethical and sustainable screens and tilts across Rest’s listed real assets portfolio in February this year including global-listed infrastructure as well as global and Australian-listed REITs.
Both Calvert and Parametric are subsidiaries of Morgan Stanley Investment Management.
The super fund said that, as part of the expanded Australia equity mandate, lowering portfolio exposures to greenhouse gas emissions had been considered under a risk control framework.
“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 targeting net zero emissions for our equity exposures by 2050,” said Rest head of responsible investment and sustainability, Leilani Weier.
“We are confident with Calvert’s capability in ESG integration, and this ongoing relationship will assist Rest in creating sustainable portfolios for the future.”
Calvert MD of responsible investment strategy, Anthony Eames, said that the firm was always keen to ensure that portfolios were tailored to the unique ESG-related priorities of its clients.
“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,” said Mr Eames.
Additionally, Morgan Stanley Investment Management Australia MD, Daniel Vanden Boom indicated that ESG-related tilts were viewed by the firm 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,” he said.
“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.”
As of March this year, Rest had roughly $68 billion in funds under management with around 1.9 million members in total.
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.