Rest Super case study: How the Australian Taxonomy can be applied to classification frameworks
Rest Super
Organisation Type
Asset Owner
Sustainability Reporting
Access reports
Experience piloting the Australian taxonomy
Rest approached the taxonomy to test how a consistent classification framework could be applied in practice. The pilot focused on a select group of real asset investments, where Rest had greater access to asset level data, allowing for more detailed assessment against the taxonomy’s activity level criteria.
As a long-term investor, Rest considers environmental, social and governance (ESG) factors where they may be financially material, as part of managing risks and opportunities in the best financial interests of members. Through the pilot, Rest tested the taxonomy as a positive screening and classification tool, helping to build an understanding of how its definitions of green, enabling and transition activities could be applied.
The pilot supported more consistent internal discussions and helped identify where further clarity or data may be required. It also highlighted the challenges of applying activity level criteria in an equity investment context. Through its participation, Rest contributed practical insights on implementation considerations and data challenges, helping inform ASFI’s understanding of how the taxonomy may be applied across different investment contexts.
Overall, the taxonomy is being considered as one of several tools that may support a disciplined and transparent approach to responsible investment over time, alongside existing investment processes.
The Australian taxonomy’s value for the superannuation sector
Over time, the taxonomy may support the superannuation sector by providing a more consistent reference point for assessing and describing sustainable and transition aligned activities. This may assist funds in incorporating ESG considerations where they are financially material, as part of broader investment processes focused on long term member outcomes.
By introducing clearer definitions and criteria, the taxonomy may help improve comparability across investment approaches and disclosures, and support more informed conversations with members and other stakeholders.
This is relevant given many members expect their superannuation to be invested responsibly, while continuing to deliver competitive long term returns.
As a voluntary framework, application of the taxonomy across the sector is likely to evolve over time. Broader adoption may contribute to more consistent market practices, while still allowing funds to apply the taxonomy in a way that reflects their own investment approach and fiduciary obligations.
How the Australian taxonomy can support capital allocation for Australia’s transition to net zero
At a system level, the taxonomy may support Australia’s transition to a lower carbon economy by providing a common, science-based framework to help identify activities that contribute to environmental objectives.
This, when used alongside a range of other tools, may assist investors in assessing climate related risks and opportunities more consistently, and support the allocation of capital towards activities aligned with decarbonisation over time.
Consistent with Rest’s approach, the taxonomy is one input that can inform investment analysis where relevant, alongside other financial considerations. It does not, in isolation, determine investment decisions or outcomes.
As the framework develops and its use becomes more established, it may contribute to greater transparency and comparability in how sustainability considerations are incorporated across the Australian financial system.