Rest flags sustainable mandates to soar

Rest is poised to be one of the largest and most active investors in sustainable investments, with ambitious plans to plough billions of dollars into ESG-led businesses.

Chief executive Vicki Doyle presented at an industry conference last week where she gave a rare glimpse of the super fund's work in responsible investing, including in sustainable agriculture, and its target of $2 billion to renewable energy and low-carbon solutions this financial year.

The move to cement its position in responsible investing came from the fund's predominantly young member base who work in retail and hospitality; one million of its members are under 30 while 1.4 million are under 40.

"Around 93% of our members surveyed earlier this year told us it was important that we invest responsibly and ethically," said Doyle.

Last year, the fund engaged with 47 ASX-listed companies to talk about climate change, governance, modern slavery and other ESG-related factors. This year, in collaboration with industry group ACSI, it has already spoken to 60 ASX-listed companies.

"That's quite a lot of companies to engage with, but we fundamentally believe that we need to engage positively and strongly as an asset owner in those investments," she said.

With $93 billion in funds under management, Doyle said super funds should flex their muscle to encourage more companies to operate responsibly, particularly in managing climate risk.

"Capital is a great incentive for helping companies to transition faster," she said.

Net zero by 2050

When most of the world turned its back on net zero goals, Rest Super politely declined. It is doubling-down on its net zero commitment by 2050.

"We integrate all things climate change into the broader process of how we go about investing. That's how we select investments, how we select and monitor external managers ... and how we conduct and construct our strategic asset allocation and all the modeling we've done," Doyle said.

Rest owns or co-invests in wind farms, agricultural businesses (grains, seedlings and native trees) and green infrastructure.

"Around 18 months ago, we made a $1 billion commitment with Quinbrook Infrastructure Partners, and this commitment gives us exposure to a range of assets, like green data centres, solar and battery projects, and it could create up to 1600 jobs," said Doyle.

"Young people already understand that AI requires a huge amount of energy, and so all of a sudden, the energy transition has become meaningful for them."

Overall, the fund expects to allocate 1% of its total funds under management to impact investing next financial year. This would equate to tens of billions of dollars by the time the fund's youngest members hit retirement age.

Responding to a question at the conference about Trump's climate policy reversals, Doyle said there is merit in understanding a fundamental change in the sector.

"COVID and the pandemic introduced uncertainty beyond belief and yet, we got through that, and somehow, markets returned to a semi-normal order," she said.

"It would feel like this particular issue - Trump and other matters of geopolitics - could have a more systemic structural change to the market."

FS Sustainability is a media partner of the 2025 Responsible Investment Association Australasia Conference. Read our conference newsletter wrap-up here.

Photo credit: RIAA, Tony Rosier. An earlier version of this article mentioned incorrect figures of the number of ASX-listed companies that Rest had engaged with. We apologise for the error.