G4 is a significantly revised document and places stronger emphasis on materiality and will encourage organisations that use the GRI guidelines to provide disclosures and indicators on economic, environmental and social impacts that are material to their business.

“One of the key benefits of the new G4 Guidelines is their redefined focus on disclosure of material issues,” said Christian Mouillon, global vice chair – assurance at Ernst & Young, in a statement. “This step will increase the transparency and value of sustainability reporting for stakeholders and provide a more accessible framework for organizations, particularly those who have not previously reported.”

G4 can be used in standalone sustainability reports, but also can be used to generate material sustainability information for inclusion in integrated reports. Other enhancements in G4 include greater accessibility for those new to reporting, and harmonization with other important global frameworks, including the OECD MNE Guidelines, the United Nations Global Compact Principles, and the UN Guiding Principles on Business and Human Rights.

G4 is the product of two years of stakeholder consultation and dialogue as part of GRI’s due process. GRI organised working groups around the world, comprising 120 specialists from constituencies including field experts, labour, business and civil society. There were two public consultation periods in 2011 and 2012, generating a total of more than 2,500 responses.

There were two workshops held in Australia and one held in New Zealand during the 2012 comment period, and there were approximately 80 participants in all, over the three workshops, Focal Point Australia, Global Reporting Initiative told The Sustainability Report last year.

Twelve Australians also participated in the GRI working groups that contributed to the development and redevelopment of standards in G4. John Purcell of CPA Australia and Kirsten Simpson of Net Balance participated in the technical editing taskforce, Andrew Cole of Lend Lease was on the boundary working group, Hugh Grant of Net Balance was on the governance working group, while Amanda Nuttall of Net Balance was on the application level working group. Matthew Nelson of Ernst & Young, Michael Cass of Shell and Peter Colley of CMFEU Mining and Energy participated in the greenhouse gas emissions working group, Paul Davies of Banarra participated on the disclosure of management approach working group, Simon Miller of World Vision International and Christiane Meyer of Banarra was on the anti-corruption working group, and Robyn Leeson of the Net Balance Foundation was on the technical advisory committee.

“In today’s world, the increasing demand for sustainability information is inevitable,” said Nelmara Arbex, deputy chief executive at GRI, who has led the development of G4. “Increasingly governments, stock exchanges, investors, and society at large are calling on companies to be transparent about their sustainability goals and performance. But this demand is also a demand for sustainability related information that matters. This is what G4 is about.

“The robust sustainability report of today must be far more than a compliance exercise.  It is a tool for demonstrating the effort reporters have made in integrating sustainability into their core business strategy, with benefits for business and society alike.”

Assistant Treasurer David Bradbury

Speaking at the EITI conference in Sydney on Thursday, Assistant Treasurer David Bradbury said that Australia’s EITI pilot will end in the middle of this year, and government will assess its impact.

“Australia has agreed to undertake a pilot in relation to the EITI and we are working through that pilot,” Bradbury said. “The pilot is due to come to the end of its period about mid-this year, and then of course we will be assessing how the pilot has gone and making future decisions around future implementation measures.”

Speaking during a panel discussion at the conference, Bradbury said the government will wait for the conclusion of the pilot before making any decisions, when asked by moderator David Kaufmann, president of the Revenue Watch Institute. Bradbury did say that the government will consider country-by-country disclosure of the taxes, royalties and other fees that companies pay as part of that.

“We haven’t taken a decision at this point,” Bradbury said. “What we have said is we will progress the EITI pilot and once we’ve worked though the pilot we will be considering broader application of EITI, and I think we will be considering questions on country by country reporting.”

Civil society groups, investors and investor groups such as the Australian Council of Superannuation Investors are pressing for mandatory disclosure of payments mining and extractive companies make to governments in which they operate because it increases transparency around governance and social responsibility.

The Australian government will shortly introduce legislation amending taxation law that will permit the disclosure of how much large listed companies pay to the Australian government in taxes, Bradbury said.

“Picking up on the point of the EITI perhaps being a template for broader transparency reforms, one of the things we have already announced we are intending to do is to
overturn what had been the traditional privacy and secrecy provisions relating to our Tax Act here in Australia,” Bradbury said. “There are some specific provisions that will deal with resource taxes, but the focus here is about insuring that there is publication about the total tax paid by certain listed, large entities.

“That is something that is actually a significant development in the Australian context, because the notion of taxpayer privacy both for individuals, but also for corporate and more widely held entities has always been almost sacrosanct in this country. We have taken the view as government that we believe this should continue to be the case for individuals, but certainly when we’re dealing with larger listed entities that are more widely held, there should be more transparency. That is something we will be addressing in the next few weeks. We will be introducing some legislation.”

Australia’s EITI pilot started in July 2012 and the AU$500,000 cost was funded by the Department of Resources, Energy and Tourism. The pilot has been overseen by a multi-party stakeholder group of federal and state government representatives, industry and non-government organisations.

Mans Carlsson-Sweeny, AMP Capital

The factory collapse, which has left more than 1,100 people dead, has highlighted risks for Australian retailers that source products manufactured overseas. Horrific incidents like Rana Plaza can pose a reputational risk to the companies, but can also pose business risks in terms of production delays and quality issues. Although Australian retailers on their own can’t solve the problem of worker safety and conditions, experts say they can collaborate through multi-stakeholder initiatives such as the Bangladesh Fire and Building Safety Agreement, developed by an alliance of NGOs encouraging international companies to sign.

Factories like Rana Plaza pose clear safety risks, and factory safety is an acknowledged problem in Bangladesh. For retailers that have begun sourcing product from Bangladesh are particularly exposed because they have moved in later.

“[Factories like Rana Plaza] are often in residential buildings that have been converted into factories,” said Mans Carlsson-Sweeny, senior ESG research analyst at AMP Capital. “This is a risk for retailers that move their sourcing to Bangladesh. Bangladesh has been supplying the international suppliers for over a decade, but those that got in there first got the good factories. Australian retailers moved in fairly late, and there are reasons for that. But because their move to Bangladesh is late, there is the risk that they get the substandard factories.”

In the wake of the Rana Plaza factory collapse and other incidents in Bangladesh, such as
the Tazreen factory fire in November 2012 that left 112 dead, Citi analysts Elaine Prior and Craig Woolford surveyed Australian clothing retailers to ascertain if any of them sourced clothing from the Rana Plaza factory and if the were reviewing their risk assessment of Bangladesh factories. Citi contacted Wesfarmers, who own Kmart, Target, and Coles; Woolworths, who own Big W; Myer; Premier Investments, who own Just Jeans, Portmans and others; and Specialty Fashion Group, who own Katies, Millers and others, and David Jones.

“Wesfarmers, Woolworths, Myer, David Jones, and Specialty Fashion Group confirmed they did not source from the factory that collapsed,” Citi said in its report. “Premier Investments did not respond to the question. Wesfarmers and Woolworths also provided information that complements the more detailed information provided to us previously on Bangladesh factory fire safety. Myer sources from one Bangladesh factory and reports that an audit included building safety. David Jones was also in the recent news about Bangladesh due to its recently established relationship with Mango and we understand that David Jones has held discussions with Mango regarding these risks. Premier Investments provided generic ethical sourcing information but no specific detail on Bangladesh. Specialty Fashion Group provided no other information.”

In addition to asking if the company bought from the Rana Plaza factory, Prior and Woolford asked if the companies were taking any additional specific measures to address these risks, if the issue was on the board/management radar as a potential reputation or business risk, “whether the company was taking additional steps to ensure the safety of those who may visit Bangladesh factories on their behalf – as employees, representatives, agents or contractors; whether workers in their supplier factories have the right to refuse dangerous work; and whether the company was considering participating in the Bangladesh Fire and Building Safety Agreement promoted by NGOs,” according to the Citi report.

Sourcing products from factories in countries with poor records in worker safety poses several risks to companies – reputational damage might affect consumer behaviour, a retailer might feel obligated to provide compensation or relief funding,, or might face liability, and investors that apply ESG valuations to their investment process might consider whether companies have adequate policies to maintain worker rights and safety in their supply chain, the Citi report noted.

Carlsson-Sweeny last year wrote a report for AMP Capital that examined if Australian retailers were exposed to supply chain risk by seeking efficiencies at too great a cost. The report suggested that the lower wages of Bangladeshi workers must be weighed against the fact that Bangladeshi factories have lower productivity ratios than Chinese factories, employ more supervisors per employee and have higher fixed costs.

The report weighed the lower labour costs of Bangladeshi factories against the fact that a minimum wage that doesn’t cover living expenses is unsustainable, and the fact that quality risks, production disruptions and sweatshop risks can lead to brand damage and revenue loss.

“It’s a poor financial risk to reward ratio,” Carlsson-Sweeny said. “To explain that, factory labour cost is not a major cost component. If you have a look at the minimum wage difference between China and Bangladesh, Bangladesh is much, much lower – it’s $37/month. But the number of workers in the factories, the number of supervisors in the factors and other labour costs, that cost difference becomes quite small at the end of the day. Further, the minimum wage in Bangladesh is not very sustainable – it’s gone up twice in the last six years. It has to go up at some point, or you’ll face social unrest, which means a risk of production. Then you have to be aware of product quality risk, sweatshop risk. I would say that retailers sourcing from Bangladesh, particularly late comers to Bangladesh, are taking on more risk for small potential cost savings.”

Australian retailers respond to engagement from fund managers such as AMP Capital. Carlsson-Sweeny has spoken with retailers on labour and safety issues in the supply chain.

“I’ve had some good discussion with listed companies,” Carlsson-Sweeny said. “They understand that the case we’re making is that it’s a poor financial risk/reward. We’ve had positive discussions about what can be done to minimise the risk. There are a few options out there – a fire and building safety agreement that international retailers have signed up to. There is also an international collaboration framework. Australian companies can have an influential voice through collaboration with NGOs, unions and other companies, and that gives scope. Collaboration will mean safeguarding not only the supply chain, but also avoiding brand risk, and avoiding having longer lead times.”

Bangladesh is not the only country that has poor worker safety standards. Carlsson-Sweeny noted that Cambodia has similar issues as well.

“The International Labour Organisation has a Better Factories Cambodia programme, and they surveyed 160 factories for fire safety, and standards have decreased in the last year – you’re seeing a decrease in fire safety compliance,” Carlsson-Sweeny said. “This is interesting because I know a lot of major international companies have gone into Cambodia now that it has opened up for foreign investment. For instance, H&M, M&S are all in Cambodia. But at the moment, I don’t think there’s any Australian exposure, so no retailer with a direct exposure. But it could become a problem.”

Prior and Woolford concluded in the Citi report that they didn’t think that Australian retailers should leave Bangladesh, but rather work to improve standards in the country.

“[W]e think that it is more constructive for companies to continue to source from Bangladesh, and undertake their own programs and participate in collaborative efforts to improve safety standards in the Bangladeshi garment industry,” they said in the report. “Of course, over time better worker conditions including higher safety standards may result in higher costs, reducing Bangladesh’s low cost advantage.”

Judith Fox, director, policy, Chartered Secretaries Australia

CSA supports the IR guidelines, and said that the government can encourage companies to use the IR framework by introducing a safe harbour provision. A safe harbour provision would allow company directors to release prospective information without breaching the business judgment rule – statutory and common law responsibilities that require directors to act with “reasonable care and diligence and in good faith in the best interests of the company and for a broader purpose,” CSA said in a post on its web site.

“If you’re making a forward-looking statement, you don’t have all the information – you can’t have all the information at the moment – which means that circumstances could change,” said Judith Fox, director, policy at CSA. “The way our business judgement rule is worded at the moment,  when you make a statement about the future,  and you can only make it using the information at hand, if further information comes to light that changes what you were saying about the future, without a safe harbour provision, you’re exposed to a potential class action lawsuit because you made a disclosure that didn’t eventuate.

“Given that investors want to have a sense of the company’s future prospects and want to know how a company is managing key risks, it would give directors a confidence to speak about these things.”

Fox noted that other markets, including the United Kingdom, have a safe harbour provision to their business judgment rule as pertains to forward-looking statements.

Despite calling for legislation permitting a safe harbour provision, CSA does not support making IR a mandated reporting structure for listed companies. IR can help organisations undertake integrated thinking as part of a change management process that overcomes the corporate tendency to operating in silos according to function, she said.

“The value of integrated reporting is that it gives a desegregated view of business,” Fox said. “You bring together different business units and they can discuss how they are operating, and then you start to be able to unpack material business risks more effectively. That also means that you’re going to be doing better reporting to the board, and the board and the senior executive team will have an idea of what’s going on across the business and not just in silos.”

However, if companies were to be forced to adopt integrated reporting as a standard, IR has the potential of becoming a compliance obligation rather than the outcome of a process of integrated thinking, Fox said.

“We think that the report is the thing you get to as the result of change management,” she said. “ You’ve got to have leadership support, because if the CEO isn’t behind it, it’s not going to happen.. Others are going to drive it, but it’s going to be something that you’re prepared to go through the pain internally to think about the business, and at the end of that, you’re going to report on that. That’s the final stage and mandating integrated reporting means that people focus on the report as a compliance obligation.”

The International Integrated Reporting Council (IIRC) released the consultation draft of the IR framework last month, beginning a 90-day comment period on the framework. IR has been developed over the past three years as a framework that will attempt to organise and communicate all the dimensions of value creation over time. The framework is a principles-based structure to aid organisations in reporting on financial, manufactured, intellectual, human, social and relationship, and natural capitals that an organisation uses and affects as well as their business model.

Dooley has been involved with the AWA since 1983, serving as federal secretary, president of the South Australia branch for 12 years from 1996, and director of the national AWA for four years, Blue Sky Alternative Investments said. Dooley has also chairman, director or CEO of nearly 40 companies and organisations, including Water Australia, the Water Industry Alliance of South Australia, the United Utilities Australia group of companies, Macarthur Water Pty Ltd and Riverland Water Pty Ltd. He is also an independent board member of the National Centre of Excellence in Desalination Australia and the chairman of the Salisbury Water Management Board in Adelaide. Dooley takes over from Lucia Cade who completed her two-year term as AWA president.

Dooley holds a Bachelor of Science and a Bachelor of Engineering (Hons) from the University of Sydney and a Masters of Public Administration from The American University in Washington DC. He is a fellow of the Institute of Engineers Australia and a fellow of the Australian Institute of Company Directors.

Blue Sky Water Partners is a wholly owned subsidiary of Blue Sky Alternative Investments, and invests in water entitlements through its Blue Sky Water Fund, and water infrastructure through the Water Utilities Australia Fund.

Jonathan Jutsen, executive director, Energetics

Treasurer Wayne Swan’s budget proposal will postpone funding amounting to AU$370 million until 2020, and the process to put that money back into ARENA was not specified. This proposal comes a year after the government promised to leave ARENA’s funding intact and isolated from year-to-year funding changes, said Russell Marsh, policy director at the Clean Energy Council.

“The important thing to us is less about the amount of money that was cut and more the fact that it’s a constant chopping and changing to the funding arrangement of ARENA,” Marsh said. “The way the government established ARENA was to effectively isolate it from annual changes to budget that it had experienced in the past. But now, the government has tinkered with the initial allocation in the budget. It doesn’t help the industry in terms of the long-term stability of the ARENA funding package. If you’re a biz looking to invest in a technology in Australia that would come within ARENA’s remit, and the government has cut the funding, what do you do?”

The CEC also criticised the government for cutting a further AU$260 million of funding for energy efficiency programs like Low Carbon Communities and large-scale solar programs.

On the more positive side, in the budget, the government proposed bringing forward AU$160 million in funding for CTIP  to the 2014-2015 financial year and left in place the commitment of AU$1.2 billion in funding for CTIP. CTIP provides investment for companies wanting to increase energy efficiency in their operations. But, noted Jonathan Jutsen, executive director of specialist consultancy Energetics, there still remains political uncertainty if the Coalition win power in Parliament in the September elections.

“CTIP impacts energy efficiency opportunities, but there won’t be a significant immediate impact [from the budget],” Jutsen said. “Bringing forward funding will be largely into the next financial, year, and if there’s a change in government, it’s unlikely that the CTIP in its current format would be retained in a change in government. We would strong support the project continuing if the Coalition removes the carbon pricing program and they have not put their direct action program in place.”

CTIP was started last year. Energetics specialises in advisory services for business, energy and carbon management, and has assisted around 40 clients in putting in proposals to CTIP, with 11 so far obtaining about AU$15 million in capital investment from CTIP, Jutsen said.

“Our clients have been using the program heavily to improve their energy efficiency and reduce their carbon emissions,” Jutsen said. “It’s a significant contributor to helping companies to improve efficiency and reduce emissions to improve profitability and competitiveness.”

Companies working with Energetics have put in proposals to CTIP for funding for projects including process improvements, heat recovery, lighting systems, compressed air, insulation and other activities, Jutsen said.

“The CTIP has definitely accelerated energy efficiency investments in the companies,” he said. “Some may well have gone ahead anyhow, but for a lot of the projects, the reason why they have been put up has been the ability to get up to a one-third grant for funding the projects, which in many cases has taken the payback period down from five years to almost three years. That has had a significant impact and with these programs, if they’re maintained for long enough, they can change the business culture. We are hoping we can get some continuity should there be a change of government.”

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Cynthia Curtis, chief sustainability officer, CA Technologies

The US-headquartered CA Technologies has operations in Australia, and Cynthia Curtis, chief sustainability officer, recently visited to meet with local colleagues and clients. Political uncertainty about the future of the carbon pricing regime has meant that clients are not pushing for software platforms to manage the reporting of energy consumption and CO2 emissions from IT facilities, Curtis said.

“From my quick perspective, when I was here last year, before the carbon price was implemented, there was an awful lot of conversation about it and there was heightened operational interest in looking at solutions and what it could mean for companies,” she said. “The sense is that either it’s not going to last at all, or it’s going to be modified substantially.”

However, the political uncertainty on the carbon pricing regime is only one aspect of demand for solutions to manage energy consumption and waste output.

“What we see is that it’s not the price of carbon that’s driving customers – it’s their own consumer demand,” said Peter Sharples, senior director, virtualisation automation and sustainability at CA Technologies in Australia. “The new generation of professionals/consumers are demanding that the services they consume is sustainable. … Don’t get me wrong – sustainability projects aren’t getting off the ground unless they have a business case, but the personal opinions of people we speak to … have changed and they want us to help them to find ways to marry up their personal drivers around sustainability into the workplace.”

CA Technologies has a package of software – CA ecoSoftware – that can be used to report on carbon output and other energy consumption. The price on carbon is not driving customer demand for reporting solutions in Australia, Sharples said.

“In terms of active carbon metering and the impact of the carbon tax in Australia, I completely agree with Cynthia that a lot of customers we’re talking to are waiting post-election to see if they have to take it seriously,” Sharples said. “They don’t want to invest, not because they don’t care but because they don’t see the return they’d like to see before investing in projects at this point. But it is important to them to measure things at the micro-level – for example, how many PCs run overnight, that sort of thing. Those projects can show return in the short term.”

CA Technologies has seen demand for its Data Center Infrastructure Management (DCIM) product, which is a centralised package to monitor power, cooling and environmentals  across facilities and IT systems in the data centre and manages the use of space and life-cycle of assets.

DCIM organises data in such a way as to facilitate discussion of consumption and waste across three relevant groups – the people in the data centres, the people who run IT and those who manage sustainability, Sharples said.

Peter Sharples, senior director, virtualisation automation and sustainability, CA Technologies

“We have had successful deployments of DCIM in the US and Europe, but it is newer here in Asia,” he said. “A lot of clients are interested in the DCIM solutions because their data centres are a major source of power consumption and are expensive to run. Power is expensive everywhere … it pays to be sustainable, and in some cases, you get a less than 12-moth payback. “

CA Technologies uses its own products to manage and monitor its energy consumption and CO2 emissions, Curtis said. Curtis as chief sustainability officer reports to the executive vice president for corporate communications, who reports to the chief executive officer.

“We use our own software to help us manage, measure, and drive sustainability within the company,” she said. “We experienced the fact that our IT guys and our facilities guys … need to communicate and that they didn’t have the same data – you had one organization that is responsible for paying the energy bill, while the other is the consumer of the energy.  … How we have used our technology is to provide that single pane of glass in terms of the data, and it helps facilitate meaningful and actionable dialogue.”

Curtis has also experienced the supply chain push for greater action on sustainability, noting that companies around the world and across industries are asking for information about sustainability activity in requests for proposals (RFPs) for all of CA Technologies’ software platforms, not just the ecoSoftware. Curtis says questions about sustainability strategy are the norm from companies based in Europe and for multinational corporations and increasingly common in other markets.

“One of the things that I’ve seen in my three years here is the steady increase in questions in the RFPs that we get,” she said. “It isn’t just for our eco-software business, because they don’t need me to respond to those RFPs. I’m seeing the RFPs for other areas of the business, where they ask very detailed questions about our commitments, our policies, our objectives, our goals and our results. On this trip, I spent time with Westpac [a client]. They have a very detailed requirement set of questions that they ask and it isn’t a ‘nice to have’. It’s a requirement to business. A growing number of our customers look at it. You don’t have to be at a threshold, but you have to have commitments and you have to be on a path. That’s what they want to be able to see, that you are as a company, as a business, you’re committed to driving sustainability initiatives within your organization. Absolutely that continues to grow and it continues to be increasingly important.”

The $9.2 billion VicSuper said it will phase out investing in manufacturers of tobacco products from this year, a decision made by the trustee after careful consideration of factors including the expected impact on investment risk and return for members and the health consequences of tobacco products. VicSuper’s current investment in tobacco accounts for less than 0.5%

“VicSuper takes social and environmental considerations into account alongside economic considerations,” said Michael Dundon, chief executive, in a statement. “With tobacco products imposing a significant burden on society in terms of health care and environmental costs, the board and management team at VicSuper feel it is the right decision to move away from investing in this industry.”

STC is the trustee board for four New South Wales closed public superannuation funds with AU$36 billion in assets under management – State Authorities Superannuation Scheme (SASS), State Superannuation Scheme (SSS), Police Superannuation Scheme (PSS) and State Authorities Non-contributory Superannuation Scheme (SANCS).  The STC board said it made its decision after reviewing the ESG merits of investing in companies that produce tobacco product. The board will instruct its managers accordingly and is updating its ESG policy to reflect this decision.

VicSuper and STC join a growing list of funds and trustees that are divesting holdings in companies that produce tobacco products. Earlier this year the board of the AU$82 billion Future Fund voted to divest holdings. The Future Fund owns stock in 14 companies in involved in tobacco production, with a combined worth of approximately AU$222 million at the end of December 2012 – 0.3% of the value of the Future Fund. Superannuation funds Hesta and Sunsuper have also decided to divest.

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Reconciliation Australia announced the government funding will be used to continue the organisation’s work in engaging the public on issues of reconciliation between Aboriginal and Torres Strait Islander peoples and the broader Australian community. Among other initiatives, Reconciliation Australia works with companies on reconciliation action plans (RAP), in which companies set goals and targets for indigenous employment, hiring and greater cultural awareness.

“Tens of thousands of Aboriginal and Torres Strait lslander people are directly benefiting from jobs, business transactions and educational opportunities created through RAP actions,” said Leah Armstrong, Reconciliation Australia CEO. “And when it comes to attitudes and perceptions, people who work in a RAP organisation are less prejudiced, more likely to trust and be proud of Indigenous  Australians and cultures, and take more actions to support reconciliation, than the general community. With sustained Government support we intend to build on this momentum to grow the RAP community and our partners.”

Armstrong said the funding will allow Reconciliation Australia also pursue renewed engagement with schools and the education sector to support the new national curriculum and its cross-curriculum priority on Aboriginal and Torres Strait Islander histories and cultures. Further, Reconciliation Australia will work with partners and supporter to create reconciliation programs for wider community and social structures.

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The loan is towards the construction and installation of four, two-bedroom prefabricated units for the community operated group, Myrtle Park Retirement Homes Inc., in Yolla, Tasmania, said David Rickards, SEFA managing director. Each unit costs approximately AU$120,000 to build and install on the site, Rickards said.

“It’s an affordable housing retirement park run by a community group un a relatively economically disadvantaged area,” Rickards said. “The aim of the community group is to keep retired people in the community.”

Myrtle Park Retirement Homes Inc. will offer retirees living in the site discounted rental rates – the two-bedroom units will be offered for approximately AU$150/week, whereas similar units on the market rent for about AU$200/week, Rickards said.

“What’s impressive about this group is that it is a large community group in a small community,” he said. “There are about 50 people involved in the group, out of a community of 250 people. … They have proven to be very resilient over time.”

The new units were opened earlier in May by Tasmanian Deputy Premier Bryan Green.

Rickards noted that in addition to the benefit brought to the community by keeping the retirees in their social network rather than being forced to seek housing further away, the units are an “innovative housing solution” that are built to high environmental standards at a “reasonable” price.

SEFA is one of three fund managers selected by the Department of Education, Employment and Workplace Relations (DEEWR) to administer the AU$20m Social Enterprise Development and Investment Fund (SEDIF). SEDIF was established to improve social enterprises’ access to finance to help them grow their business and increase the impact of their work in their communities and matches private investment. SEDIF allocated AU$10m to SEFA, and SEFA brought another AU$10m through its founding shareholders, which also include the New South Wales Aboriginal Land Council, Community Sector Banking and private individuals and foundations as well as Triodos Bank.

SEFA has loaned AU$450,000 to Three Sistas, a social enterprise which has bought a former tourism business and turned it into low-cost accommodation service for people coming to Cairns for health services, as well as crisis accommodation for the homeless. The money has gone towards the purchase and refurbishment of the site. SEFA structured the arrangement with Three Sistas as a “longer term” loan with a tailored payment arrangement as the organisation will be refurbishing the business in the initial phase, SEFA told The Sustainability Report at the time.

SEFA has more projects in the process of being evaluated for finance, Rickards said.

“We have some nice projects in the pipeline, but the trick is getting them out of the pipeline,” he said. “You have to put a fair amount of support into the groups to get through the [financing] system and out, and they need support for a combination of reasons. Some are new start-ups. Secondly, some groups don’t have a lot of experience with debt and managing debt in community groups in Australia. And thirdly, they often approach us early in the project and it takes time to develop the project to where it can obtain financing.”

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