The federally funded Clean Energy Finance Corporation (CEFC) and Qantas Super plan to ramp up investment in companies that are fast-tracking decarbonisation, each committing a $50 million cornerstone investment to the Ellerston 2050 Fund.
The open-ended wholesale fund will focus on investing in listed and unlisted small to mid-size companies which actively help reduce carbon emissions in the wider economy. Companies manufacturing low carbon products, technology and services that enable energy efficiency, or facilitate accelerated adoption of low emissions technologies, will be considered for investment. As manager of the fund, Ellerston Capital will assess a company’s ability to contribute to meaningful carbon abatement as part of its core investment process.
CEFC chief executive Ian Learmonth said: “We are seeing significant change across corporate Australia as large companies commit to increasingly ambitious emissions reduction targets. As this shift gains momentum, demand for products and services that enable companies to meet these targets will continue to increase and will play an integral role in building carbon reduction across the wider economy.
“We are confident the 2050 Fund will enable fast-growing companies to benefit from the transition to net zero emissions by bringing innovative products and service solutions to market. By backing these new businesses, we are demonstrating how we can support economic growth while also reducing emissions.”
Qantas Super chief investment officer Andrew Spence said: “We value the opportunity to provide environmentally aligned capital to support the work of Australia’s carbon abatement enablers. This approach is consistent with our commitment to deliver great investment performance to our members, while also achieving net zero carbon emissions across our investment portfolio by 2050.”
Ellerston Capital executive chairman and chief investment officer Ashok Jacob said: “As a responsible investor focused on supporting the growth ambitions of small companies as they seek capital and public listing, we are seeing an increasing amount of companies explicitly providing solutions to help the economy transition to net zero emissions. A growing urgency is required to tackle the causes and consequences of climate change.”
The CEFC has already launched a $200 million clean technology early-stage investment fund which is being raised, invested and managed by its spin-out venture capital firm Virescent Ventures. The Ellerston 2050 Fund will, however, invest in more established businesses, essentially businesses that are already making a difference in decarbonisation. Investments will also be selected for their potential to draw further investment into the sector.
According to the Responsible Investment Association of Australia, in 2020, only a quarter of Australian investment managers could demonstrate consideration of ESG factors when valuing assets, construction of portfolios and the allocation of capital. In the same year, the market for responsible investments in Australia grew to $1.2 trillion, 15 times the growth rate of Australian professionally managed investments.
Image: Companies which facilitate accelerated adoption of low emissions technologies will be considered for investment by the Ellerston 2050 Fund.