CEFC supports impact investing through the Artesian Green and Sustainable Bond Fund
CEFC is increasing its investments in Australia’s emerging clean energy fixed income sector, supporting the first corporate-focused green bond fund developed by investment management firm Artesian.
The Green and Sustainable Bond Fund (the Fund) was established at the end of 2020 and currently has $ 52.7 million in assets under management. Along with lead investor Future Super, the Fund will be supported by an additional investment of $ 25 million from CEFC. CEFC’s investment, made on behalf of the Australian government, will help boost Australia’s emerging green bond market.
The Fund is open-ended and actively managed by the Artesian Fixed Income team. Investing in highly liquid green and sustainable investment grade corporate bonds issued by Australian and international issuers, as well as cash, it aims to outperform the Bloomberg AusBond Composite 0-5 Year Index benchmark.
As global sustainable bond issuance is expected to rise 32% to $ 850 billion globally this year1, the Australian green bond market is still in its infancy. In its most recent benchmark report, the Responsible Investment Association of Australia found that environmental factors are increasingly a priority for Australian investors.2 As demand continues to grow, the increase in the number of investment products available will act as a catalyst to further expand impact investing.
CEFC CEO Ian Learmonth said CEFC’s investment will support the development of Australia’s clean energy fixed income sector, which was essential to meet growing investor demand for opportunities. sustainable investment.
“Investor capital is increasingly benefiting from exposure to green and sustainable bonds, and products like this fund offer investors a way to support Australia’s transition to a low-emission economy. Growth in this industry demonstrates that market returns and sustainable results are not mutually exclusive, ”said Learmonth.
“Australia is well advanced in its transition to clean energy and a shift to the use of finance that generates sustainable results is essential. Funds such as the Green and Sustainable Bond Fund can capitalize on both of these trends, providing an important new investment option for the growing number of investors who recognize that impact investing can be positive for returns.
Artesian Chief Investment Officer, Matthew Clunies-Ross, said: “We are very pleased that CEFC is investing in the Fund, working with us to support Australian companies in their efforts to reduce carbon emissions and fight climate change. climatic problems. Australia lags behind most developed countries in terms of carbon measurements, so there is a lot of work to be done in our local market. “
Artesian portfolio manager David Gallagher added: “The AUD green and sustainable bond market is still relatively embryonic compared to offshore bond markets. By working with CEFC and engaging with Australian companies, we hope to increase labeled bond issuance and improve issuer impact reporting. We believe there is no need to sacrifice the best risk-adjusted returns while pursuing investments with transformational impact. The Fund’s returns since its inception bear this out.
CEFC Director of Investments Jasmin Jenkins said: “One of the Fund’s main objectives is to report on the impact of bonds on reducing our emissions. Incorporating sustainable measures into the investment research process for bonds acts as an additional source of risk management, providing greater rigor in the analysis of securities and issuers. Demand from Australian investors for responsible investment products such as the Green and Sustainable Bond Fund is expected to continue to grow. Asset managers who ignore this trend may find it difficult to compete.
Future Super Founder and CEO Simon Sheikh said: “The Superannuation Pension is an incredibly powerful tool to help build the future of renewable energy in Australia. We are happy to work with CEFC and Artesian to support Australia’s transition to renewable energy. For the first time in history, we had a moment last month when solar power in Australia overtook coal-fired electricity. Australia is one of the sunniest and windiest countries in the world, so the triangle of investor pressure, consumer demand and plentiful supply gives me great hope that this transition will soon reach a point. tipping point. “
CEFC has been active in the development of the Australian green bond market, having invested over $ 700 million in innovative green bonds since its inception. As a key investor in many of these emissions, CEFC has helped increase private sector investment in a range of emissions reduction activities. Together, these bonds have raised some $ 4 billion, significantly expanding the market for private investors in clean energy.
Thanks to the Clean Energy Innovation Fund, CEFC and Artesian are also working together on the success of the Clean Energy Seed Fund. CEFC’s $ 10 million pledge enabled Artesian to successfully raise $ 26 million for the Seed Fund, which has become a leading investor in Australian start-up cleantech companies.