Strategic investment priorities
The CEFC strategic investment priorities recognise the urgent nature of Australia’s emissions challenge, including the target of
82 per cent renewable energy generation by 2030 and the achievement of net zero emissions by 2050.
Our economy-wide approach to decarbonisation prioritises investments across three main areas of economic activity: energy decarbonisation; the efficient use of energy and materials and the development of natural capital and carbon sequestration measures.
Strategic investment priorities
Our strategic investment priorities are informed by the CEFC Act and Investment Mandate, Australia’s emissions reduction challenges and market opportunities to support the achievement of Australia’s emissions reduction targets.
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.
Sustainability
Sustainability considerations are central to CEFC investment and portfolio management activities, reflecting our role in accelerating investment in Australia’s transition to net zero emissions. Our investment screening processes include climate-related opportunities and risks, with our investments supporting measures which positively impact targeted climate related matters, including emissions reduction. We provide enhanced climate disclosures via our Annual Report, including around financed emissions. The sustainability of our own operations is also important, with the CEFC having achieving net zero scope 1 and 2 emissions.
Investment Mandate
The CEFC Act maximises the operational independence of the CEFC, particularly with respect to investment decisions. Australian Government Investment Mandate directions provide the CEFC Board with additional guidance on the direction and performance of the CEFC investment function. Core elements of the Investment Mandate Direction include:
| 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 |