Strategic investment priorities
Our strategic investment priorities recognise the urgent nature of the emissions challenge
and our important role in anticipating and responding to market conditions.
We invest to decarbonise energy, support the efficient use of energy and materials and back the development of natural capital and carbon sequestration measures, as part of an economy-wide approach to decarbonisation. Through our investment decisions we are prioritising emissions reductions opportunities where our capital can have the biggest impact, together with our co-investors and the broader market. In this context, we are committed to developing new markets, building investor confidence and crafting tailored and innovative investment products to drive lower emissions.
We recognise that our investment activities are just the start of what is required – while the size of the investment requirement is seismic, so too are the opportunities. Australia’s strong and stable financial system gives us vital access to domestic and global capital, including the fast-growing pool of green capital seeking to preference sustainable investment. Capitalising on these opportunities will help Australia meet its climate change challenge, with the benefits of the net zero transition shared across our economy as we pursue our goal of net zero emissions by 2050.
Decarbonise energy
GOAL - Drive cleaner, greener energy to deliver net zero
IMPACT - Decarbonise energy. Switch to alternative fuels.
CONTEXT - CEFC investment activities span the energy sector, from new solar and wind generation to the installation of large-scale energy storage and the development of a transmission and energy grid better suited to renewable energy generation. We are also backing our emerging critical minerals sector and the development of new alternative fuels of the future, including hydrogen.
Efficient use of energy and materials
GOAL - Transform energy and resource use to lower emissions
IMPACT - Enhance energy efficiency, performance. Use low carbon materials.
CONTEXT - One of the defining features of the net zero transition is the flow-on economic benefits. New investment in infrastructure, property and natural capital alongside the development of new energy sources, such as hydrogen and alternative fuels, can contribute significantly to Australia’s economy. CEFC finance is driving greater ambition economy-wide.
Natural capital, carbon sequestration
GOAL - Make better use of our land to close the emissions gap
IMPACT - Improve natural capital. Lift carbon sequestration.
CONTEXT - Some 55 per cent of Australia’s land mass is agricultural land, facing the twin challenges of declining arability per capita and increasing demand for food via population growth and changing consumption habits. The CEFC invests alongside landowners to maximise the productive, sustainable use of natural capital assets, while crowding in new sources of capital.
Investment Mandate Direction
CEFC investment activities are informed by Australian Government policy direction, the CEFC Act and market opportunities to support the transition to net zero emissions. Our key stakeholders include investors, asset developers, operators and owners, industry bodies, regulators and government agencies. Through the CEFC Act our eligible technologies are categorised as renewable energy, energy efficiency and low emissions. Through the Investment Mandate Direction, the Australian Government provides the CEFC Board with additional direction on investment priorities. A range of provisions in the 2023 Direction related to the Rewiring the Nation Fund, the Powering Australia Technology Fund and the Household Energy Upgrades Fund™, as well as the CEFC General Portfolio, among others.
Investment Mandate priorities
| Unlock greater penetration of renewable energy and accelerate decarbonisation of Australia's electricity grid, while considering the potential impacts on reliability and security of electricity supply | |
| Support the deployment of clean energy technologies in Australian industry | |
| Support the development of clean energy manufacturing and processing capabilities in Australia | |
| Support technologies and projects to assist Safeguard Mechanism facilities to reduce their emissions, consistent with Australia's national trajectory to net zero and while supporting their international competitiveness | |
| Support greater uptake of clean energy technology measures in residential dwellings |
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CEFC and ESG
The CEFC embeds Environmental, Social and Governance (ESG) considerations across all our activities, including investment and portfolio management, as well as CEFC operations. We are committed to a well-governed investment approach that incorporates ESG objectives which enhance sustainable and long-term risk adjusted returns. This is achieved through proactive engagement with counterparties, managers, financiers and other stakeholders on material ESG issues, in parallel with appropriate investment risk mitigation.
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