The initial investment will create a new platform that will be managed by Gunn Agri Partners. The platform aims to help farmlands adopt low-emissions technologies, carbon sequestration and improve climate resilience, the statement said.
Its seed asset is The Glenn, a 1,200-hectare property in northern New South Wales that has already identified emission-reducing initiatives, such as reducing the use of synthetic fertilizer and implementing grazing management.
"Taking a minority stake in a growing asset manager alongside an investor like CDPQ helps better align future strategies with a decarbonization outcome that the manager can deploy, giving us a seat at the table when those discussions are taking place," Heechung Sung, head of natural capital at the CEFC, said in an email.
"It is a statement of intent that demonstrates that the CEFC is standing behind the sector. We are signaling to the market that sustainable farming can generate attractive returns whilst at the same time address climate change through emissions reducing technologies and practices," she said.
CEFC's assets under management is not available, but it was given access to A$10 billion of funding from the Australian government when it was formed 10 years ago to facilitate flows into the clean energy sector.
Gunn Agri Partners has A$750 million in AUM and specializes in investing in agricultural assets that incorporate sustainable farming practices.
"Agriculture is a vital place to deploy CEFC capital to help reduce emissions. The sector poses a demanding climate change challenge: how to produce more food, more efficiently, for a growing population amid a more extreme climate, while also reducing greenhouse gas intensity and emissions," Ms. Sung said.
"Our investments reflect both the complexity and urgency of improving the sustainability and competitiveness of the Australian agriculture sector, in conjunction with measures to regenerate and improve land, water and biodiversity," she added.
A spokeswoman for CDPQ, which has C$402 billion ($309.93 billion) in assets, said that there is no further commitment of capital agreed upon beyond the initial investment but that it will be reassessed in a few years.
"Sustainable land represents an attractive asset class that fits in with CDPQ's strategic objectives — while contributing to the diversification of our portfolio — and we see potential in the Australian market," she added.
