Investors are beginning to make concrete sustainability demands. Just ask ISPT, the fund holding the retirement savings of half of working Australians who have invested in property.
Using power purchase agreements (PPAs) to buy 100% renewable electricity for all its properties in VIC and NSW, ISPT puts its money where its mouth is.
“We are able to report significant, genuine environmental action to the investors asking what we were doing about climate change,” ISPT sustainability manager Steven Peters said.
“In 2018 we started to get a few questions about environmental action and that’s when we first raised the topic of going carbon neutral.
“Our business is very much about providing a return for investors. They have a strong voice and we listen to them.
“There was clearly a momentum shift happening around environmental, social and governance focused investments, so we decided to put some real effort into the area.”
A member of our Better Buildings Partnerhip program, ISPT is just one example of how trailblazing businesses are buying renewable energy as part of their new normal.
From fast follower to leader
ISPT was established more than 25 years ago as a vehicle for property investment. More than half of Australians have their retirement savings invested in property through ISPT.
Sustainability has been part of ISPT’s decision making for some time. However, following the catastrophic bushfires of 2019, investors became much more vocal about demanding accountability on carbon emissions. ISPT accelerated its plans and secured its first renewable power purchase agreement in 2020 – one step on its path to being carbon neutral.
“I think we used to be fast followers in the sustainability space. But now I think we’re getting ahead of the curve. We started a bit earlier with power purchase agreements than others,” Peters said.
Learn from ISPT’s journey
ISPT first took up a purchase agreement in its Victorian portfolio, with the help of a City of Melbourne program. This meant that ISPT joined other large energy users as part of a buying group including RMIT and Deakin universities and CBUS Property.
“This Victorian renewables deal was a gear shift that showed that we could deliver results at a portfolio level, not just a building level,” Peters said. “Support for NSW and ACT properties to make the switch was quick to follow.”
The buying group experience gave ISPT the confidence to negotiate agreements on its own. Joining the Business Renewables Centre is another way businesses can connect to form a buyer’s group.
How to get internal buy-in on renewables
“To get started, I presented resilience and carbon neutral plans to my board. These were essential to showing the physical risks climate change poses to properties across ISPT’s portfolio,” Peters said.
The next hurdle was to raise the profile of renewables internally. Luckily, ISPT’s sustainability department was already getting demonstrable wins on energy efficiency upgrades and installing onsite solar.
The first power purchase agreement demonstrated immediate impact on a large scale. It allowed Peters to gain trust at the board level.
“After successfully setting up agreements in New South Wales and Victoria, the board started asking when it was Queensland’s turn,” Peters said. “Power purchase agreements have become part of normal business.”
3 reasons to switch to power purchase agreements
Budget certainty - a power purchase agreement allows a business to lock in an electricity price for the next 5 or 10 years.
Less transactional costs – you don’t have to go to market to negotiate electricity contracts every year.
Greening the grid – power purchase agreements can directly support the development of new solar and wind farms in Australia. This will help stabilise the national grid.
Tips for your company
Peters offers his tips on getting your business on board:
Be clear on your motivations for entering into a renewable power purchase agreement. Are the drivers financial, environmental, reputational or a mix?
Consider the risk appetite of your organisations. This will shape the detail in your purchase agreement.
If you don’t know where to start, attend a buyer's bootcamp with the Business Renewables Centre. Register for the 12 and 13 September session.
Engage your management team early and bring them along on the journey
Next steps for ISPT
As well as installing more rooftop solar, continuing with energy efficiency upgrades and looking at battery solutions, ISPT is speaking with its tenants about purchasing 100% renewable electricity.
Currently, switching to an accredited GreenPower electricity plan is the fastest and easiest way most businesses can go renewable.
Working together to get to net zero by 2030
To prevent the further devastating effects of climate change, we urgently need more residents and businesses to purchase 100% renewable electricity.
Our goal at the City of Sydney is to get our whole local area – all residents, businesses and organisations – to net zero emissions by 2035.
We purchase 100% renewable electricity from wind and solar farms in regional NSW to cover all City of Sydney operations. This includes 115 buildings, 75 parks, 5 pools and 23,000 street lights.
We need your help to further reduce emissions.
Contact us for help
We’d like to help you go renewable.
If you’d like to know more about power purchase agreements or find ways you can purchase 100% renewable electricity, email us at renewableenergy@cityofsydney.nsw.gov.au.
Published 2 September 2022, updated 14 February 2024
