The fact is that this company makes most of its earnings off the back of carbon producing coal-fired energy production and is using the proceeds to seed a $3 billion renewable energy fund that will invest in clean sources of power like solar and wind.

There is nothing new age environmentally conscious in this. Like any corporation that is looking to maximise returns, AGL (like several others) understands that the writing is on the wall for the the production of dirty energy – in the longer term. Thus it is making an each-way bet on the future.

Make no mistake, companies like AGL make investment decisions primarily with reference to investment returns rather than environmental outcomes – regardless of the rhetoric.

The growing community swell around de-carbonisng industry plays into the equation but investment returns take a bigger share of investment decisions.

Numbers guide decisions

This is the company that last week announced it was winding down its interest in the coal seam gas industry.

Once again it was influenced by community uproar and protests about fracking in their back yards but the decision was one centred on the the gas supply/demand equation and the capital costs of firming up an unreliable coal seam gas resource.

In doing so it flagged a $640 million cost associated with the closure of coal seam gas operations – a move that resulted in the statutory loss of $449 million in the half year result to December 2015 which it announced on Wednesday.

Ugly as that was investors were not especially unnerved by the bottom line non-cash loss.

The writedown is the result of a former miscalculation of energy prices. And AGL is no Robinson Crusoe among its peers in this regard.

Shareholders welcome tightened purse

Rather investors were pleasantly surprised that some strict capital spending and some prudent cost cutting combined with higher gas prices resulted in a first half result that was better than most analysts had anticipated.

The company is not promising the same level of profit improvement in the second half of the 2016 financial year but nor is it expecting earnings to falter thus it produced guidance that was at the upper level of expectations. And the share price finished up the day marginally ahead.

For the time being at least AGL is riding on the back of higher gas prices – an outcome that may confuse the average reader who is bombarded every day with news that world oil and gas prices are in a slump.

In the case of AGL the gas it has been producing has been pre-sold in long-term contracts to the emerging wholesale customers and in particular the LNG producers who are ramping up their Queensland operations.

The massive LNG operators need reliable gas feedstock supply. So AGL exists in a handy pricing bubble which could continue for some years and could effectively bypass the current rout in energy prices.

Renewables tipped to pay off

Longer term it is clear that AGL is taking a punt that the balance will ultimately move between clean renewable energy and the dirty stuff which earns its healthy profits today – hence this week's creations of the renewables fund.

One of its existing clean energy assets will be effectively vended into this new renewables fund.

Thus the $200 million investment that AGL will take initially in the $2-3 billion fund would not add up to a significant diversion of funds. It will be looking for partners – like infrastructure funds – to join in the equity financing and debt providers like the Australian banks to take a punt on lending to the fund.

(AGL also announced yesterday that it had invested US$20 million (428 million) in a solar battery storage developer. It's small change in relative sense but enhancement in battery storage is the issue de jour in harnessing solar energy.)

More support needed

But the investment in the renewable funds provides it with disproportionate bragging rights in the battle to improve the environment.

Most companies – and AGL would be among them – are financial returns motivated and environmentally agnostic – even though they are sensitive to the growing movement towards lowering carbon emissions.

To really move the dial towards producing cleaner energy, companies like AGL need stronger support from the government which under the Abbott government gave them little certainty about how much support and financial incentive would be given to green policies.

And AGL is the first to admit that the changes in government policies over the past 4 -5 years has made investment decisions difficult.

Ultimately AGL, which is the country's largest generator, its largest emitter of greenhouse gases and the largest builder and operator of renewable energy is a particularly important part of the conversation about Australia's energy use and generation.

And as such the allocation of its investment should exert some influence on government policy. But it is limited in how fulsome any commitment to investment in clean energy can be until it can be secure with the level and the timing it will receive from legislators.