ESG: CEFC operational highlights 2021–22
In this section
We are committed to demonstrating good corporate citizenship and continue to develop and embed ESG processes in our operations. Our ESG policy identifies the key factors relevant to our own operations and guides the management of our impact on the environment, our people and the broader community.
We strive to lead by example through our corporate governance practices, disclosures and initiatives.
During the 2021–22 reporting year, we focused on improving our approach to managing modern slavery risks in our procurement processes and progressing our Reconciliation Action Plan (RAP). We maintained our strong performance on gender equality and carbon neutrality and refreshed our ESG policy.
We continued to build our leadership position in the responsible investment sector by contributing to a range of initiatives including development of a First Nations investment screening approach which we shared with the Responsible Investment Association Australia (RIAA) and establishing ESG guidelines for the securitisation sector.
Initially in September 2021 and then again in September 2022, we were named a Responsible Investment Leader in the RIAA Responsible Investment Benchmark Report. ESG investing is a rapidly evolving and growing space and we are committed to remaining at the forefront of market developments. We will undertake annual materiality assessments of our ESG factors to ensure they remain dynamic, focused and relevant.
We maintained carbon neutral certification with Climate Active for the fifth consecutive year. We undertake an annual third-party assessment of our organisational carbon footprint, which was 699 t CO2-e in 2020–21, the most recent data. We reduce organisational emissions via continued improvement in the emissions performance of our utilities, procurement of GreenPower (where possible) and supporting active transport and flexible working arrangements. We offset our residual emission through accredited schemes. In support of our vision for reconciliation, for the past three years we have procured offsets from projects with First Nation co-benefits. These include the Wiralla Station Carbon Farming Project, Orient Station Regeneration Project and Bareeda Regeneration Project. Refer to Appendix C.
ESG positive impact factor
2. Reconciliation Action Plan
In 2021–22, the CEFC was pleased to introduce its Innovate RAP which signifies the next step in our reconciliation journey. The Innovate RAP runs for two years and outlines actions for achieving our vision for reconciliation. The Innovate RAP builds on many of the initiatives from our Reflect RAP and allows us to gain a deeper understanding of our sphere of influence and establish the best approach to advance reconciliation. This RAP focuses on developing and strengthening relationships with First Nations peoples, engaging staff and stakeholders in reconciliation and developing and piloting innovative strategies to empower First Nations peoples.
Reconciliation Action Plan: 2021–22 activities
- Shared our First Nations investment screening procedure with industry peers such as the RIAA and the Clean Energy Council to apprise institutional investors as to how they can consider the potential impacts of investments on First Nations communities
- Participated in the Australian Government 2022 Indigenous Graduate Pathway program, to raise the awareness of the CEFC as a First Nations graduate employer
- Provided continued support for CareerTrackers, a national non-profit organisation creating career pathways and support systems for Aboriginal and Torres Strait Islander young adults
- Featured Acknowledgement of Country recognition and presentations at staff Town Hall meetings
- Marked National Reconciliation Week and NAIDOC Week with staff events and cultural learning opportunities
- Embedded First Nations cultural awareness training into our new hire onboarding program
- Launched a dedicated First Nations Hub on the CEFC intranet to provide staff with access to our RAP, information, resources, tools and learning opportunities.
ESG positive impact factor
3. Industry impact
We collaborate with leading responsible investment and sustainability bodies to accelerate decarbonisation and advance ESG performance across the investment sector. As a specialist investor, we are committed to sharing information about our investment experience, new technologies and investment approaches in this dynamic market environment. Key activities are outlined below.
Industry collaboration: 2021–22 highlights
Responsible Investment Association Australasia
The CEFC participates in the RIAA First Nations Peoples’ Rights Working Group, which aims to advance the rights of First Nations peoples, including elevating their participation in relevant responsible investment activities. We are also a member of the RIAA Human Rights Working Group, which collaborates on enhanced processes to address human rights matters from a company and investor perspective.
Green Building Council of Australia
Together with the Green Building Council of Australia and the Infrastructure Sustainability Council, we developed Australian buildings and infrastructure: Opportunities for cutting embodied carbon. The report provides asset owners, investors and developers with practical guidance and cost analysis on reducing embodied carbon to support Scope 3 emission reduction targets.
Green Bank Network
As a member of the global Green Bank Network, the CEFC hosted a well-attended “banking on green” discussion at the Australian Pavilion at COP26 Glasgow. The discussion focused on the role of green banks and development finance institutions in mobilising private investments into climate solutions.
Climate Bonds Initiative
We contribute to a Climate Bonds Initiative working group updating and harmonising global taxonomies for low carbon buildings aligned with a net zero emissions trajectory. This includes providing feedback on the useability and applicability of the updated taxonomy for the Australian market.
ESG positive impact factor
4. Modern Slavery
We work with our suppliers and counterparties to establish and maintain sustainable and socially responsible operations and supply chains. This includes developing and implementing an organisation-wide framework, driven by our Modern Slavery Working Group, that embeds modern slavery considerations within existing investment, procurement and contracting processes. Our annual Modern Slavery Statement outlines our commitment to identifying, assessing, and addressing modern slavery risks that may exist within our operations and supply chains, including those related to investment commitments.
Modern slavery activities: 2021–22 highlights
- Review of our procurement processes and established an onboarding process for all new suppliers with a contract value of $10,000 or more, including a mandatory modern slavery risk assessment
- Screened 86 non-investment contracts for modern slavery risks, with 78 rated as low risk and eight rated as moderate risk. There were no contracts rated as high risk
- Provided new suppliers rated as moderate risk with information about the CEFC Modern Slavery Policy and Principles for Suppliers, to communicate the behaviour and standards we expect of our suppliers
- Established the CEFC Modern Slavery Remediation Framework, to support the CEFC in contributing to the remediation of actual or potential modern slavery impacts identified in our operations and supply chains
- Delivered modern slavery risk assessment and monitoring training to our investment, portfolio management and legal teams to build capability and capacity within our organisation and embed modern slavery risk considerations within our processes.
ESG positive impact factor
5. Diversity, equity and inclusion
At 30 June 2022, 57 per cent of the CEFC Board and 25 per cent of the CEFC Executive Team were female and 33 per cent of senior management positions were held by women. Women were awarded five (30 per cent) of the 17 promotions in 2021–22. Overall, gender diversity was steady during the reporting year, at 52 per cent male and 48 per cent female.
According to a gender pay gap analysis conducted in March 2022, the average gender pay gap at the organisational level was 24.5 per cent (in favour of men), calculated using the average of all salaries for men and women (excluding the CEO). This result presents a narrowing of the gender pay gap by 1.5 per cent compared with the previous reporting and compares favourably with the overall gender pay gap for financial services firms in the private sector (at 29.5 per cent) reported by the Workplace Gender Equality Agency.
At the CEFC, this gap is due to a larger proportion of men being in the most senior roles which attract higher remuneration levels compared with women. A more precise measure of gender pay equity, using like-for-like positions, showed a 4.68 per cent absolute average pay gap across 12 positions where a gender pay gap could be calculated, compared with the previous six per cent gap. The analysis showed that the gender pay gap was greater than five per cent for only three positions (25 per cent). This finding is consistent with the 2021 results and indicates that systemic gender bias is not impacting remuneration decisions at the CEFC.
Gender equity activities: 2021–22 highlights
- Women in Sustainable Finance: Continued leadership of this growing industry-wide initiative which facilitates knowledge sharing, collaboration and diversity in advancing sustainable outcomes in the investment and finance sectors in Australia
- International Women’s Day: Focused on all staff, featuring a presentation from a senior executive Caroline Lovell, sharing insights from her diverse career, including in breaking down gender bias in organisations
- Respect At Work: Focus on diversity, equity and inclusion, alongside staff training following release of the Respect At Work report into sexual harassment in the workplace by Australian Sex Discrimination Commissioner Kate Jenkins.
At the end of the 2021–22 year, the CEFC had 130 employees, an increase of six on the previous year. As a specialist financier, the CEFC recruits experienced, senior practitioners within each functional area, which is reflected in the average employee age of 42.30 years. The CEFC continues to reflect a diverse cultural profile. The proportion of employees born overseas is steady at 42 per cent, including 55 employees from 24 countries, in addition to those born in Australia. Refer to Appendix B.
ESG positive impact factor
6. Labour practices and employee health and safety
The CEFC provides a safe and engaging environment for staff, featuring a range of initiatives to enhance the work, health and safety (WHS) of our employees. This remained an important feature of our operations in the 2021–22 year.
Supporting our employees: 2021–22 highlights
- Culture: Building an inspiring work culture, including a peer-to-peer recognition program for “values champions”, culminating in our annual CEO Values Awards; regular all-staff meetings and an annual all-staff in person meeting focused on our priorities and commitment to net zero emissions
- Career development: Individual coaching programs for mid-career employees and those seeking to develop their leadership capabilities, in addition to health, safety and wellbeing programs and internal “lunch and learn” and other initiatives to build staff capabilities
- Employee Assistance: Expanded access to the Employee Assistance Program and Manager Support Service. Focus on Mental Health Month alongside RUOK Day, giving staff access to webinars hosted by psychologists, staff “reconnection days”, resilience training and meditation and mindfulness sessions
- Health prevention: Participation in Cancer Awareness and Prevention Month and Movember, highlighting the role of regular screening, health checks and early detection; employee discounts to individual fitness offerings through our WHEREFIT partnership; comprehensive executive health checks offered biennially
- Agile working: Continued support for an agile approach to work to accommodate the demands of the COVID-19 pandemic, including WHS reviews of employee home workspaces, optional follow-up ergonomic workstation assessments, and the provision of home safety equipment and IT accessories as needed.
In the 2021–22 year, we were pleased to support two CEFC colleagues in career development opportunities:
- Chloe Munro Scholarship: The CEFC is a co-sponsor of this important Clean Energy Council program, which supports transformational leadership through 15 scholarships for women working across the renewable energy, carbon abatement and energy efficiency sectors. CEFC Senior Associate Kelly Seo was named among the 10 inaugural scholarship recipients
- Eisenhower Fellowship Global Program: This prestigious global program supports the development of private and public sector leaders engaged in addressing some of the most pressing issues of our times. CEFC Investment Director Grace Tam was one of 25 people from 23 countries to be named a Fellow in the 2022 program, recognising her work in developing green consumer loan products for energy efficient and electrified homes.