Why carbon neutral makes sense for Frasers
Tina Perinotto | 9 November 2017
Carbon neutral energy for residential developments is the backbone that kickstarted Frasers Property Australia’s recent certification as a carbon neutral organisation under the federal government National Carbon Offset Standard scheme.
The accreditation places the company’s organisational operations on the same platform as big corporates such as banks ANZ, NAB and Westpac, the Cities of Sydney and Melbourne, real estate group CBRE and property investors Dexus and GPT.
Initiatives include 6 Star Green Star Interiors certification for its offices, the purchase of 100 per cent GreenPower where possible, and the upgrading of video conferencing systems to reduce interstate flights.
According to national sustainability manager Paolo Bevilacqua, “We started looking at carbon offsets to enable our new embedded energy business, Real Utilities, to sell carbon neutral energy.”
The move meant the energy business could be certified under NCOS; and the natural progression was then to certify the company’s operations.
Offset costs might soon be negligible
Mr Bevilacqua said the ultimate aim was for the costs of offsets to be brought to a negligible level or zero so that most emissions are avoided internally and through operations rather than offset. Costs are already low.
“We’ve already invested in highly carbon-efficient workplaces and careful waste and energy management on our construction sites,” Mr Bevilacqua said.
Parent company Frasers Centrepoint is a signatory to the United Nations Global Compact and has committed to reducing its energy and water usage by 15 per cent between 2015 and 2025.
Chief executive Rod Fehring said the strategy was a response to global trends.
“We are moving towards a carbon-constrained economy. To respond to this challenge, Frasers Property has effectively set an internal price for carbon that will enable our people to better identify opportunities for carbon reduction moving forward.
“Our objective is to move away from a reliance on offsets to maintain certification and continually hone our business practices so we can be offset neutral too.”
The energy strategy is to be profitable, cheaper and carbon neutral
As part of the carbon efficient energy focus the company has installed 350 geothermal cooling systems for houses at its Fairwater estate at Blacktown about 34 kilometres north-west of Sydney, slated for a final rollout of up to 850 houses.
Mr Bevilacqua said the systems are performing well, in line with expectations, but some additional monitoring is also scheduled.
Costs were hard to specify on an individual basis as the cost of systems were built into the overall project but payback equates to roughly five years based on alternative ducted reverse-cycle airconditioning systems that might retail for $3000 to $4000, Mr Bevilacqua said.
He said the company’s new energy business Real Utilities was part of the work to create low-carbon energy infrastructure and provide services to the occupants of the buildings, at prices that were both below those of the grid and profitable for Frasers.
“It allows us to be a provider of the energy. In some cases we will provide electricity, gas, hot water, aircon and generating some of that on site and carbon offsetting the residual emissions. So the residual product is carbon neutral certified.”
The company is now doing this at its new apartments at Botany through a regular embedded electricity network, plus full carbon offset.
“We’re the provider of the embedded energy network and we’re acting as an agent for the owners corporation,” Mr Bevilacqua said.
The company wants to become a retailer in the future and is “looking at the process now”.
The move on energy was also compatible with the company’s strategy to build a better brand profile for the company.
Bevilacqua says it allowed investment in more initiatives – more plant and equipment upfront – and to maintain that plant over the long term as infrastructure that both delivers good returns for the company and raises its profile as a quality developer.
“It’s breaking down one of the challenges in residential – why should I invest more in carbon reduction when my customers don’t care about it?
“It’s in our best interests because it allows us to enhance the ongoing return. We aim to be cheaper than the big energy retailers and provide greener electricity, and we make it simple to sign up.”
At all times, though, the company also needs to enable the customer to switch providers if they choose.
Following the same logic of building trust in the brand, Frasers is also offering leasing services for investors in apartments and building management through appointment by the owners corporation.
“We’re trying to keep ongoing relations with the building because we think we have a vested interest to do so. It will hopefully keep customers coming back and spreading the word among families and friends if they have a good experience.”