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RFM recognises that its operations may affect the environment, its workforce and the communities in which it operates, and considers these impacts in its governance and management practices. As an externally managed fund, RFF operates in accordance with the Sustainability Policy set by its Responsible Entity, RFM, reflecting the Fund's dependence on natural systems and resources and the need to protect and value these assets to support sustainable productivity now and into the future.
RFF is expected to fall within the Group 3 entity classification under AASB S2 Climate-related Disclosures, issued by the Australian Accounting Standards Board, and is progressing toward alignment with this standard; the Group continues to disclose Scope 1 and Scope 2 emissions for all assets over which it has operational control, consistent with the operational control approach to organisational boundaries under the Greenhouse Gas (GHG) Protocol.
1. Climate-related risk governance
The Board of the Responsible Entity holds ultimate oversight of climate-related risks and opportunities, embedded within existing governance and risk management processes, with the Internal Compliance Committee (ICC) reviewing the risk management framework quarterly and reporting material or emerging risks to the Board; climate-related opportunities are identified by management and advised to the Board where material.
Climate-related matters are integrated into standard decision-making, including Board approval papers and investment proposals, and the ICC monitors the risk register to ensure material climate-related risks are addressed and escalated.
RFF is an externally managed fund with no staff, owning a diversified portfolio of Australian agricultural assets; RFM, its manager and Responsible Entity, earns a management fee based on RFF's adjusted total asset value, which climate-related factors may affect.
2. Climate-related risks and opportunities
RFF's primary exposure to climate-related risk arises through its ownership of agricultural assets, since most income comes from triple-net leases under which lessees generally bear operating and insurance costs; these risks are managed through active asset management, diversification across commodities, regions and climatic zones, and consideration of climate factors in property valuations.
A proportion of assets (FY27f 20%) are directly operated, exposing their earnings to climate risk and generating the Group's Scope 1 and Scope 2 emissions, managed through operational controls, monitoring and diversification.
RFF also sees potential opportunities from changing climate-related expectations, such as carbon credits and renewable energy projects, assessed against commercial and land-use considerations, and continues sustainability initiatives including integrated pest and disease management, an enhanced rock weathering trial, best management practice certification and carbon crediting, supporting continuous improvement in asset value.
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