Environmental, social and governance
As a for-purpose investor, with a central focus on cutting emissions, the CEFC has a longstanding commitment to environmental, social and governance matters. During the 2020–21 year, the CEFC Board approved our inaugural ESG Policy, which identifies the material ESG factors which are to be factored into investment and risk management decisions.
The ESG policy came into effect in February 2021. The policy requires the CEFC to “maximise impact” through our investment commitments; to “do no harm” with respect to indirectly related areas, and to apply an “exclusions” screen covering prohibited technologies and criminal and other activities where the CEFC will not participate. The CEFC has not identified any instances of non-compliance with either the “do no harm” or “exclusions” provisions of the policy in the reporting year.
Maximising our impact
Through our investment activities, the CEFC directly contributes to positive ESG outcomes, particularly by accelerating the decarbonisation of our economy while working to deliver a positive return for taxpayers across our portfolio. Since we began investing, CEFC investment commitments have contributed to a $33 billion lift in investment to deliver emissions abatement.
Our activities also deliver broader ESG outcomes, in addition to decarbonisation and financial measures. With the introduction of the ESG policy we are committed to reporting against nine material ESG factors where we can maximise impact. Many of these areas are discussed in detail throughout this Annual Report and on the CEFC website, including specific investments and their impacts.
Progress around the “maximise impact” requirement is reflected in Figure 7.
ESG is integrated into our investment approach, demonstrated through:
Environmental impacts, measured via emissions reduction
Social impacts, as we increase the flow of finance into Australia’s successful transition to a low emissions economy
Our governance approach, which underpins the commercial rigour of our investment activities