Property developer Mirvac goes carbon positive in trailblazing move

Major property developer hits carbon goal nine years early and says there is still more work to be done.

Mirvac boss Susan Lloyd-Hurwitz has driven a strong enviromental, social and governance agenda with the developer now carbon positive. Picture: Jane Dempster/The Australian

Property developer Mirvac has thrown down the gauntlet to corporate Australia by going net positive carbon nine years ahead of its 2030 target and flagged new areas where emissions can be trimmed.

The move is the first by a real estate company and among the first to be achieved locally which could prompt more companies in the construction industry and other intensive areas to also shift their operations.

Mirvac said it had hit net positive carbonfor scope 1 and scope 2 emissions in its operations and chief executive Susan Lloyd-Hurwitz said it had done so by “focusing on energy efficiency at our assets, supplying these assets with renewable electricity, transitioning away from fossil fuels, and purchasing high-quality carbon offsets, here in Australia”.

“We firmly believe that our focus on environmental, social and governance issues is not separate from our financial performance, but that rather, it enhances it,” Ms Lloyd-Hurwitz said.

“Taking urgent and proactive action on climate change, protecting our natural resources, and caring about our communities and our people adds significant value to the group, she added.

Mirvac is getting lower operational costs at its buildings, reduced risk, higher employee engagement and productivity, and has more ability to attract quality partners, tenants and customers.

The company has maximised the energy efficiency of its portfolio by monitoring performance, conducting night audits, and optimising asset performance, which cut carbon intensity by 20 per cent from fiscal 2013 to fiscal 2018.

Mirvac’s retail, office and build-to-rent portfolios are fully supplied with renewable electricity and where it has embedded networks, it onsells renewable electricity. Its new developments such as 80 Ann Street in Brisbane have all electric base building operations and operate on renewable electricity.

The company is also investing in a small amount of high-quality offsets.

Ms Lloyd-Hurwitz said the company was benefiting from improved asset valuations, reduced energy costs for tenants, better leasing outcomes, and reduced risk through asset resilience.

Mirvac’s focus will now be on reducing scope 3 emissions, which includes embodied carbon in materials and supply chain, such as concrete and steel.

At its annual meeting, the company confirmed guidance as it came through the last lockdowns well-positioned, with its residential arm firing.

Ms Lloyd-Hurwitz said a full recovery was unlikely to start until the second half of this financial year, noting that cash collection rates in Mirvac’s investment portfolio were down to 88 per cent over the first quarter as shopping centres emptied.

“However, despite soft leasing conditions, occupancy across our investment portfolio remains high, and our tenants in Sydney and Melbourne have indicated a strong motivation to return to the workplace,” she said.

The company’s next wave of apartment projects includes Nine at Willoughby, where it had strong sales at the weekend, along with The Langlee at Waverley, and Forme at Tullamore in Melbourne.

“We also expect that the return of immigration will underpin a strong performance in our apartments business, with current under-supply across the east coast positioning us well to respond,” Ms Lloyd-Hurwitz said.

Mirvac shares were up around 0.4 per cent at $2.81 in a lower market around lunchtime on Tuesday.

Originally published as Property developer Mirvac goes carbon positive in trailblazing move