How tenants can cut electricity emissions

From the newsletter

Nedbank has become one of South Africa’s first major companies to offset electricity emissions by purchasing Renewable Energy Certificates (RECs) from Growthpoint Properties. The deal covers 26 branches in Growthpoint-owned malls and offices, marking a milestone for tenants seeking to offset power emissions in leased spaces.

• For businesses operating in multi-tenanted spaces, Scope 2 emissions, those generated from purchased electricity, have long been a challenge. Tenants can control usage but not the energy source.

• RECs are set to transform this market in Africa. In liberalised markets like South Africa, landlords can generate or purchase electricity, claim RECs for it, and sell them to tenants seeking to offset their electricity emissions.

More details

• The initiative incorporates blockchain-tracked technology, making it easier for companies to claim, trade, and verify renewable energy usage. Charl de Kock, Nedbank’s Executive Head of Group Business Services, said, “Access to RECs through Growthpoint gives us an immediate, auditable way to reduce Scope 2 emissions for our branches in their buildings. This removes a major barrier and supports our long-term climate goals, especially where it is too complex to wheel or generate renewable electrons.”

• Growthpoint has invested heavily in renewable energy infrastructure, operating one of South Africa’s largest fleets of small-scale embedded generators. Its portfolio includes 80 rooftop solar systems generating a combined 61.2 MWp, nearly half of which are registered on the international I-REC registry, providing global recognition and credibility for renewable energy generation.

• Alongside its rooftop solar fleet, Growthpoint launched its wheeled renewable energy initiative, e-co₂, last month, supported by a landmark 195 GWh power purchase agreement (PPA) with Etana Energy for a sustainable mix of hydro, wind, and solar electricity. The 5 MW Boston Hydropower Plant was the first facility to come online under this PPA.

• In most African power markets, tenants often rely entirely on landlords for electricity access. They usually cannot choose their provider, as arranging supply is the landlord’s responsibility. This limits opportunities for tenants, even those capable of buying from independent power producers or installing their own systems. As markets open and technology advances, tenants will gain more options to purchase electricity from landlords or other providers.

• The partnership is expected to set a benchmark for corporate decarbonisation in South Africa, offering a scalable model for tenants in multi-tenanted buildings to achieve credible Scope 2 emission reductions while supporting the local green economy. With growing pressure on corporates to decarbonise as a measure of investment attractiveness, many will seek innovative solutions to meet their sustainability goals. RECs will serve to meet this demand.

• In support of the deal, Werner van Antwerpen, Growthpoint Head of Corporate Advisory, said, “Nedbank’s early adoption of RECs marks a pivotal shift for carbon offsetting and reporting in South Africa. Transparent carbon emission offsets are urgently needed, particularly for businesses in leased spaces, as they cannot tackle the challenge alone. Growthpoint is proud to support our tenants in decarbonising their operations.

Our take

• Other major South African companies may follow Nedbank’s lead, creating a competitive market for RECs among tenants in multi-tenanted buildings.

• REC programs could expand into other liberalised African markets, offering tenants in countries like Kenya, Nigeria, and Morocco similar opportunities to offset Scope 2 emissions.

• Financial institutions may develop green financing solutions, such as loans or bonds tied to REC procurement, helping smaller businesses participate in carbon offsetting.