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Our targets support global efforts to be 1.5°C aligned
At the end of FY23 Centuria Capital Group announced new sustainability targets, supporting global efforts to be 1.5°C aligned. This requires us to materially reduce our Scope 1 and Scope 2 emissions to help limit the World’s warming to 1.5°C. We’ll do this by achieving our sustainability targets.
They are:
- Targeting zero Scope 2 emissions1 by 100% electricity sourced from renewables by 2035
- Focused on eliminating gas and diesel2 in operations where practicable by 2035.
But, we’re not just stopping there, both Centuria Industrial REIT (CIP) and Centuria Office REIT (COF) have announced their own short and medium term targets to accelerate our efforts. Both REITs are targeting:
- Zero Scope 2 emissions3 by 2028, seven years ahead of the wider Group.
- COF is going even further and leading the charge in eliminating, where practicable, gas and diesel in operations4 ahead of 2035 by starting today.
What is 1.5°C aligned?
1.5°C aligned refers to an effort to reduce the World’s emissions and limit global warming by 1.5°C. Warming beyond 1.5°C is believed to have severe consequences for the world, resulting in increased extreme weather events leading to greater impact on the way we live today.
To support global efforts to be 1.5°C aligned we need to reduce our Scope 1 and Scope 2 emissions materially and we’re aiming to achieve this by 2035.
Where are our emissions?
We’ve spent the last year calculating where we generate our emissions to help us better focus on reducing them. Almost all of our emissions (Scope 1 and 2) are found in the day to day operations of the assets we own.
Around 90% is from the electricity we consume. This includes lighting in lobbies and the power used to run elevators, computers and more.
The last 10% is mostly made up of the gas and diesel we burn to keep our buildings warm, heat water used in end of trip facilities or cooking in retail and commercial kitchens.
Decarbonisation pathways
To achieve our sustainability targets, we worked with our stakeholders to develop realistic decarbonisation pathways, considering the nuances presented by different parts of the business.
Our decarbonisation pathways are business specific pathways for the various listed funds (Centuria Office REIT and Centuria Industrial REIT), unlisted funds and assets leased by Centuria (as tenant).
Our decarbonisation pathways support global efforts to be 1.5ºC aligned.
Use of offsets
Centuria has an in-house active management team. This team manage the day to day operations of our various real estate and fund portfolios. At Centuria, the immediate focus is for our team to accelerate our business specific decarbonisation pathways. Where practicable, the allocation of capital is focused on investing in the early electrification of equipment and procuring renewable energy (either through the deployment of on-site solar, or procurement of large-scale generation certificates (LGCs)) to reduce our Scope 1 and 2 emissions. As such, we are not purchasing carbon offsets.
Target steps and timelines
Our sustainability targets are supported by short (1-3 year) and medium (4-7 year) term targets with practical steps announced by the business. The accumulated impact of these targets support a global effort to be 1.5ºC aligned.
Common climate terms
| Term | Definition | Term | Definition |
|---|---|---|---|
| Scope 1 | Direct emissions emitted on-site (gas and diesel). | Net zero | Total emissions equal zero requiring the procurement of offsets to balance residual emissions within the value chain. |
| Scope 2 | Indirect emissions tied directly to the reporting entities operations. i.e. electricity. | Offsets | Certificates which are tied to initiatives which create a reduction in emissions. Offsets are procured to address residual carbon in a corporate’s operations. |
| Scope 3 | Indirect emissions associated with the entities value chain, outside of its operational control boundary. This includes tenant and embodied emissions. | Operational control | The ability to control and influence outcomes for select operations/assets, having the ability to enact the change required to reduce emissions. Normally defines a companies Scope 1 and 2 emissions.* |
| Scope 4 | Emerging emissions category, classified as avoided emissions achieved through select initiatives. | RE100 | An external certification of a corporate climate target where all electricity is purchased or sourced from a renewable source. |
| Embodied carbon | The carbon which is emitted as part of the extraction, manufacturing, transport and construction of materials, products and buildings. | SBTi | Science-based target initiative – an accreditation body which assesses whether corporate climate targets are aligned to the 1.5 degrees celsius global target. |
*Centuria has adopted the National Greenhouse and Energy Reporting Act definition of operational control. Centuria account for Scope 1 and 2 emissions where we are able to manage the day to day operations of an asset or part thereof. Including the ability to introduce management policies and upgrade plant/equipment.
- Centuria will account for zero Scope 2 emissions by being powered by the equivalent of 100% renewable electricity through a combination of onsite solar and large-scale generation certificate (LGC) deals which match our consumption.
- Centuria Capital Group will focus on eliminating gas and diesel where practicable, from equipment owned and operated by the Group. Gas and diesel equipment owned and operated by our tenants are excluded from Centuria’s sustainability target.
- CIP & COF will account for zero Scope 2 emissions by being powered by the equivalent of 100% renewable electricity through a combination of onsite solar and large-scale generation certificate (LGC) deals which match our consumption.
- COF will focus on the elimination of gas and diesel where practicable, from equipment owned and operated by COF. Gas and diesel equipment operated by our tenants are excluded from COF’s sustainability target.
- Reduction pathways and steps are indicative only.