Scenario analysis has demonstrated that Rest’s members will be better off by achieving Paris Agreement goals, with the estimated annualized investment returns for its default core strategy investment option expected to be nearly two percentage points higher by 2040.
The analysis showed that assuming the average 48-year-old Rest member had an account balance of $67,000, with the average salary for workers of this age in the retail industry or around $48,000 per year, could be approximately $50,000 better off when they retire at age 67 in 2040 if the world acts to keep temperature rises below two degrees Celsius.
Andrew Lill, Rest chief investment officer, said that setting the roadmap to achieve to achieve a net zero carbon footprint for the fund by 2050, consistent with the goals of the Paris Agreement, would mean many of its members working in part-time, casual and lower-income jobs would benefit from actions that mitigate risks and help open up investment opportunities as the world would be transitioning to a lower-carbon economy.
Rest had six measures to achieve a net zero carbon footprint by 2050:
In November last year, Rest confirmed its commitment to achieving a net zero carbon footprint for the fund by 2050, after settling litigation brought by a member on its fiduciary responsibility to act on climate change.
“This was an important next step in our approach to managing environmental social and governance (ESG) factors in our investment process,”Lill said.
“Our members’ retirement savings will also be contributing to a more sustainable future. More of their money will be invested in assets that will contribute to a more sustainable future, and less will be invested in assets that are fuelling climate change, like thermal coal.”
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