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Rest launches low-cost SRI option

The $59 billion super fund has launched the responsible investment option Financial Standard revealed it was working on late last year, introducing one of the lowest cost SRI vehicles in the market.

Rest's 1.7 million members will now have access to 'Sustainable Growth', the fund's first socially responsible investment option developed on the back of member feedback.

Rest estimates total investment costs will come in at 0.36% per annum, making it one of the cheapest SRI options on the market.

As reported by Financial Standard, Rest surveyed a random sample of members back in December 2020 to better align the investment option with their values. The survey was sent to 647,218 members, with the fund receiving 7311 responses - over 75% of which expressed a moderate to strong interest in the option.

"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," Rest chief executive Vicki Doyle said.

"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."

Among other things, members were asked what industries they would and would not like the option to invest in, what is driving or limiting their interest in responsible investments and how likely they are to invest in such an option.

The final product has an asset allocation mix of 75% growth and 25% defensive assets across Australian and international shares, property, infrastructure, bonds and cash.

When it comes to equities, Rest has excluded companies 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.

Elsewhere, the new option will invest in property assets that have an average or above average GRESB Real Estate Assessment score, and in infrastructure assets with integrated ESG factors that work towards a low-carbon economy or have limited exposure to transition risks.

Infrastructure 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 are also excluded.

Development of the option follows the landmark Federal Court case brought against Rest by its member, Mark McVeigh.

After more than two years, the case was dismissed as Rest agreed to all of McVeigh's requests, including publicly acknowledging the threat that climate change poses both economically and socially.

Read more: RestFinancial StandardMark McVeighFederal CourtVicki Doyle