This case study was published in the 2023 REIT Industry ESG Report, which details the REIT and publicly traded real estate industry's environmental, social, and governance (ESG) performance and features 20 case studies showcasing REIT leadership and ESG innovation from a variety of sectors. The report serves as a practical tool for shareholders and stakeholders to assess the scale and impact of the REIT industry's ESG commitments and initiatives. Applicable footnotes and/or citations for this case study are available in the full report.
Alexandria Real Estate Equities, Inc. (Alexandria) secured a large-scale and long-term agreement to procure renewable energy from a new solar farm to be connected to the New England electricity grid starting in 2024. This innovative procurement will allow Alexandria to significantly increase its consumption of renewable energy to mitigate emissions from purchased electricity and help its tenants meet their sustainability goals.
Sustainability has long been prioritized at Alexandria. The organization continuously evolves its sustainability programs and initiatives to drive competitive advantage and expand its trusted relationships with its tenants through the alignment of its strategic sustainability goals with theirs. As part of its comprehensive approach to sustainability, Alexandria is accelerating its decarbonization strategy by focusing on minimizing the use of fossil fuels, increasing energy efficiency, and using renewable electricity.
A major component of Alexandria’s approach to decarbonization is the integration of renewable energy across its existing asset base. By aggregating and leveraging the scale of its tenants’ power needs, Alexandria successfully negotiated a long-term, large-scale solar power purchase agreement (PPA) with a new solar farm to be connected to the New England grid. The PPA, which is anticipated to produce approximately 210 million kilowatt-hours of renewable electricity annually beginning in 2024, will supply renewable power to meet the region’s existing electricity load. The PPA will yield both environmental and financial benefits for Alexandria and its tenants, significantly increase the amount of renewable electricity consumed across Alexandria’s existing asset base, and serve as an example for others to follow.
As Alexandria continues to stay attuned to its tenants’ needs and facilitate effective mechanisms for them to achieve their sustainability goals, the innovative PPA is a mutually beneficial investment. As of December 31, 2022, 90% of Alexandria’s top 20 tenants (by annual rental revenue) had set net-zero carbon and/or carbon neutrality goals. Sourcing renewable energy will allow each party to pursue their decarbonization goals and complements other measures being implemented to reduce emissions.
Alexandria’s strategy underlines the importance of seeking renewable energy alternatives and offering at-scale solutions for organizations to bolster their decarbonization efforts. More information regarding Alexandria’s decarbonization efforts can be found in the organization’s 2022 ESG Report.
Alexandria Real Estate Equities, Inc., an S&P ® 500 company, is a best-in-class, mission-driven life science REIT making a positive and lasting impact on the world. As the pioneer of the life science real estate niche since its founding in 1994, Alexandria is the preeminent and longest-tenured owner, operator, and developer of collaborative life science, agtech, and advanced technology campuses in AAA innovation cluster locations, including Greater Boston, the San Francisco Bay Area, New York City, San Diego, Seattle, Maryland, and Research Triangle. Alexandria has a longstanding and proven track record of developing Class A/A+ properties clustered in life science, agtech, and advanced technology campuses that provide our innovative tenants with highly dynamic and collaborative environments that enhance their ability to successfully recruit and retain world-class talent and inspire productivity, efficiency, creativity, and success. For more information, please visit www.are.com.