Will the banks embrace the CEFC?

With Australia’s clean energy future initiated by the construction of the Clean Energy Finance Corporation, and the government’s subsequent contribution of $10 billion in capital over five years, the co-investment opportunity for banks and fund managers is only months away.

Further to the CEO appointment of Macquarie Bank carbon and renewable energy dealmaker Oliver Yates, the CEFC has made several key hires with recent appointments including two former Babcock & Brown investment bankers. Both Theodore Dow and David Stegehuis, previously Managing Director of FIG at Westpac and Head of Strategy at Acciona Energy respectively, have strong credentials across the investment markets. 

It would appear the CEFC has managed to capture some of the nation’s best talent in the emerging clean energy and sustainability markets; the Low Carbon Australia merger integration brought a depth of industry expertise from Alcoa’s Meg McDonald to the team, alongside Nicolette Boele from Banarra and The Climate Institute.

While Andrew Webster and his London-based boss John Marlow were conducting cross-border renewable energy and carbon trading deals during Oliver Yates tenure with Macquarie Bank, the UK started a carbon market in 2005. Will the CEFC in 2013 be the green brick road to Australia’s investment for sustainable futures?

With the CEFC only months away from the official July 1 date to release the first phase of capital, the banking sector and fund managers are well aware of the co-investment opportunities, and if some of the recent key hires outlined below are anything to go by, it would appear we are moving in the right direction.

-- While not directly related to the establishment of the CEFC, Westpac released its sustainability strategy only weeks ago to continue to invest an additional $3 billion up to a total of $6 billion in clean energy financing. Leading the charge is Emma Herd, a seasoned carbon and environment expert, together with recent hire Siobhan Toohill, a highly regarded climate strategist and corporate responsibility thought leader.

-- NAB signed the UN accredited Natural Capital Declaration in late 2011 (launched in June 2012 at Rio 20), and have hired Sasha Courville, an international sustainability and natural capital expert from Britain to work alongside their CFO Mark Joiner, who is also a member of The National Sustainability Council.

-- ANZ hired Toby Kent from pwc Asia to spearhead corporate responsibility alongside Shane Lucas, previously a strategic stakeholder across multiple government departments.

-- Colonial First State appointed Perpetual’s Berrutti last year to add weight to Amanda McCluskey’s move to Asia.  The banking parent group CBA has a new senior appointment in the wings in Andrew Hall, previously Head of Corporate & Public Affairs at Woolworths. With Accenture corporate responsibility and sustainability strategist from France, Cecile Walton, at CBA, and Andrew spearheading government & corporate affairs and sustainability, maybe the corporate team will work alongside Neil Hereford in the carbon solutions group to manufacture the co-investment opportunities with the federal government’s CEFC.

With the multibillion dollar investment mandates associated to these CEFC co-investment opportunities, this will create a closer meeting of the minds between corporate responsibility and commodities and the project finance teams. Will the responsible investment and ESG teams in Fund Managers continue to collaborate with their banking counterparts? 

I envisage there to be much greater collaboration between sustainability, corporate responsibility and the project finance teams in the bank as well as the markets teams as commodities and carbon become part of the clean energy investment equation.

As outlined throughout, some of these key appointments have come from abroad and it is important to note that while deal making is an art best left to the sophistication of those with a deal sheet of transactions experience, corporate responsibility and ethical investment often requires a different way of thinking in the current economy.

With Europe in particular ahead of Australia in carbon and renewable energy investment, the broader sustainability thought leadership stems from the old continent and we need to embrace their think-tank as we shift towards the new economy.

This article was originally published by Search360.