Vicinity Centres (ASX:VCX) is in the process of becoming the largest investor in solar power of any shopping centre group in Australia.
It will invest $28m over the next 12 months across its SA and WA assets via the installation of 39,000 solar panels that will generate 17.4 GWh of energy each year. The energy generated by the solar and battery systems will be used on-site for both Vicinity and retailers reducing reliance on the grid. The project is a good example of how financial returns and sustainability objectives can work in unison. We expect Vicinity to achieve mid teens IRR on investment from its solar energy programme.
In recent discussions with management, it is clear the company is looking for energy related initiatives that benefit as many stakeholder groups as possible. At the same time as shareholders being financial winners from the initiative, in a win for the environment Vicinity is reducing overall energy usage. From FY15 to FY17 the total portfolio gross lettable area (GLA) reduced by 4.6% while the total energy usage of the portfolio has reduced by 14.4% over the same time period. Vicinity is within the investment universe of the Ethical Partners Australian Share Fund.
Ethical Partners are pleased to see Australia take the next steps to implement mandatory climate reporting with the release of draft climate standards, which we provided feedback on.
Ethical Partners have continuously called for the provision of high quality, comparable data on company’s climate governance and carbon metrics, which we believe is imperative for investors to fulfil the potential of responsible investment.
Ethical Partners have been proud to have been active supporters of the TNFD Forum over the past few years, and to provide regular feedback on the development of the official TNFD recommendations, which were launched in December, as well as to be active members of the RIAA Natural Capital Working Group.