Retail Employee Superannuation Trust (Rest), one of Australia’s largest super funds, with over $60 billion in assets and more than two million members, has appointed Parametric and Calvert Research and Management (Calvert), to manage the equities allocation across the newly launched Rest Sustainable Growth Option.
The Rest Sustainable Growth Option is a diversified portfolio with enhanced environmental, social and governance investment characteristics weighted towards growth assets. It has an asset allocation across Australian and overseas shares, property, infrastructure, bonds and cash.
Global responsible investment leader Calvert will manage the equities portion, which makes up approximately 72.5% of the total portfolio, supported by implementation specialist manager Parametric.
The portfolio will be positively tilted to companies who are demonstrated leaders in environmental sustainability and resource efficiency, who are socially equitable and respect human rights, or those who can demonstrate accountable governance and transparency.
Companies who are 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 have been excluded from all equity allocations.
The Option’s investments in Australian and overseas shares also aims to have a lower carbon intensity compared to their relative benchmarks.
“We are delighted to have been selected by Rest for their industry-leading, low-cost Sustainable Growth Option and after-tax solutions,” says Chris Briant, Head of Australia and New Zealand, Parametric and Calvert.
He says: “This is the first time in Australia we have been able to combine the deep alpha-seeking Responsible Investment capabilities of Calvert with the specialist after-tax-focused implementation strategies of Parametric.”
Calvert’s deep company-level ESG research and over 40 years of experience in areas such as active proxy voting, custom screening, and a focus on an improved ESG performance, as well as Parametric’s specialist implementation offering provides the customized solution REST was seeking.”
Mr. Briant says there is a growing demand from Australian super funds for responsible investing strategies and after-tax solutions, so to be able to secure this mandate with a combined offering is a milestone achievement for Eaton Vance in the Australian market and testimony to the quality of the Calvert and Parametric offerings.
John Streur, CEO of Calvert adds: “Australian super funds are focusing on responsible investing, and have been active in the market for that reason. We were able to demonstrate the intellectual capital behind Calvert’s decades long dedication to responsible investing, and look forward to working with Rest to enhance its investment offering to its more than two million members that may choose this Option.”
“Our Rest Investments team are pleased to utilise Parametric and Calvert’s equity portfolio construction skills to deliver a diversified investment option offering strong long-term returns within enhanced environmental, social and governance criteria,” says Andrew Lill, Chief Investment Officer at REST.
“Rest remains dedicated to providing our members with the opportunity to reach their personal best retirement outcome…… The introduction of this option has also allowed us to respond to the wants and needs of a number of our members, who have expressed that ethical investing is an important consideration for them when making decisions about how to best invest their super,” says Mr. Lill.