A new three-year renewable electricity deal is set to see the proportion of UniSuper's direct property portfolio that's managed by AMP Capital become carbon neutral almost a decade ahead of target.
AMP Capital signed the agreement with SmartestEnergy, a commercial and industrial energy provider which is wholly owned by Japan's Marubeni Corporation, on behalf of the $100 billion super fund.
Under the agreement, a 10-hectare, community solar farm in Victoria will link about six gigawatt hours to assets managed by AMP Capital for UniSuper. These include Dapto Mall, Marrickville Metro, 7 Macquarie Place and Malvern Shopping Centre.
This is equivalent to the energy consumption of nearly 1000 houses in New South Wales, AMP Capital said.
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The deal will make a significant dent in UniSuper's plans to achieve carbon neutrality in its direct property portfolio by 2030, with this move expected to see AMP Capital's proportion of the portfolio hit that milestone on 1 January 2022.
It could also see UniSuper become the first super fund to achieve net zero carbon across its entire direct real estate portfolio, AMP Capital said.
The deal also aligns with AMP Capital's own sustainability strategy, working to achieve carbon neutrality across its entire managed real estate portfolio by 2030, covering Scope 1 and 2 emissions.
"We are proud to be taking this step with UniSuper, a real estate owner who prioritises sustainability as much as we do," AMP Capital head of platform operations and ESG investing, real estate Chris Nunn said.
"Working with our clients to deliver on their carbon neutral ambitions across their real estate portfolios is a key part of our sustainability strategy and importantly, aligns with the goals of our clients and their members who are focusing more than ever before on the sustainability of the assets in which they invest."
Acquiring renewable electricity is one of the most significant steps real estate asset owners and operators can take when looking to go net zero, he added.
"Renewable electricity contracts are now established and cost-effective for businesses with significant electricity demand. At AMP Capital, we've found that switching to renewable electricity has resulted in lower and more predictable energy costs, and that helps insulate our tenant customers from volatility in the electricity market," Nunn said.
Also commenting, UniSuper chief investment officer John Pearce said: "This renewable energy agreement demonstrates carbon neutral portfolios can be achieved to maximise the sustainability of the portfolio without sacrificing investment returns for our members."
"We thank AMP for supporting our portfolio-wide commitment to net zero with comprehensive actions to meet this ambitious target."