In today's rapidly warming world, where environmental consciousness is more crucial than ever, companies that prioritize sustainability stand out as beacons of hope. Sun Communities Inc., (SUN) has emerged as a shining example (pun-intended) of a corporation that not only recognizes its responsibility towards the planet but also takes tangible steps to minimize its ecological footprint.
SUN is one of the largest owners and operators of mobile home communities, RV sites, vacation rentals and marinas in the United States, United Kingdom, and Canada. Real estate companies face onsite and supply challenges when it comes to being net zero. Let’s look at how Sun Communities is tackling sustainability across their varied sites.
Ambitious Carbon Change Goals
Chairman and Chief Executive Officer, Gary Shiffman, has led the company in prioritizing a robust set of ESG goals. The company aims to achieve Carbon Neutrality by 2035, a significant milestone in the battle against climate change. Shiffman commented, “It is incumbent upon Sun to play its role in combating the unfavorable impacts of climate change,” said Gary Shiffman, Chairman, CEO, and President. “We have an array of resources and knowledge available to support achieving our Carbon Neutral and Net Zero Emissions goals. We're sure we'll reach our goals if we work together across all of our projects to build our commitments into our daily tasks and workflows. This is a commitment to our residents, guests, team members, and communities that will benefit current and future generations.” By taking proactive measures to reduce its carbon footprint such as piloting supply chain carbon reporting with its largest spend suppliers, Sun Communities is taking the necessary steps to creating a greener, more sustainable future for generations to come.
In addition to its Carbon Neutrality goal, SUN has set its sights on achieving Net Zero Emissions by 2045. This ambitious objective entails balancing the amount of greenhouse gasses emitted with an equivalent amount removed from the atmosphere. With a strong focus on renewable energy, resource efficiency, and carbon offset projects, the company is steadfast in its mission to transition towards a carbon-neutral future and combat climate change head-on.
ESG Improvements
To measure and track its commitments, SUN is using both the GRESB (Global Real Estate Sustainability Benchmark) and S&P CAS (Corporate Sustainability Assessment) Environmental, Social, and Governance (ESG) reporting frameworks. The company tracks its performance in key sustainability metrics, ensuring continuous improvement and responsible decision-making. Compared to the previous year, Sun Communities increased its GRESB score by 19 points (a 40% increase) and its S&P CSA score by 6 points (a 17% increase).
Harnessing Solar Power & Eliminating Single-Use Plastics
SUN takes its commitment to waste reduction seriously and is dedicated to making a positive impact on the environment. SUN boasts 8,000 MWh of solar onsite - an increase of 550% from 2021 to 2022. Additionally, the company has set a bold goal to eliminate single-use food and beverage plastics at all RV communities by 2030. These solar initiatives not only reduce the company's carbon emissions but also inspire others to adopt sustainable energy practices. In addition to these onsite renewable energy initiatives, SUN will expand its use of renewable energy by purchasing off-site generation and renewable energy certificates (RECS).
These commitments are not perfunctory, “I think people are talking about it more,” says SUN’s Director of Sustainability, Melissa Smith. “Customers may not read the ESG report themselves but they’re looking for that information on the way we’re approaching things. By being more vocal about what our properties are doing, we are getting that message out.” More importantly, SUN’s growth means these commitments will soon have a mandatory impact. Their most recent acquisition expanded its ESG interests to the UK where just this year companies are required to report on greenhouse gas and provide an interpretation of risk for climate change and how it may impact assets.
Often what we see in companies such as SUN, is that after making much positive progress, the final steps to Net Zero prove elusive. Unfortunately, energy solutions today are complicated and often require the corporation to develop expertise far outside its domain. Navigating complexities and ensuring consistent standards across all locations are crucial factors in achieving this goal of sustainability. However, the transition to a fully renewable energy supply chain presents its own set of hurdles, including regional disparities, cost considerations, and compliance with varying regulatory frameworks. Moreover, collaborating with suppliers to ensure sustainability throughout the supply chain adds another layer of complexity, requiring responsible sourcing and ethical labor practices.
We Need Better Solutions
To complement their strategy and ease some of the complexity, SUN’s progress could be further improved if the company included RECs with additionality in their approach. RECs with additionality are not only relevant and critical, but they provide several benefits.
First, Additionality RECs will increase Sun Communities’ environmental impact. These RECs specifically support new renewable energy projects, helping to expedite the buildout of renewables. These certificates provide a crucial element currently absent in the unbundled REC model, allowing Sun Communities to demonstrate a direct contribution to new renewable energy projects and bolster its sustainability efforts.
Secondly, opting for RECs with additionality will add scalability to SUN’s approach. VPPAs (Virtual Power Purchase Agreements) involve significant complexities and uncertainties. A VPPA is a huge undertaking requiring expert negotiating skills, risk mitigation in the electricity market, and a massive effort to engage stakeholders. Not to mention dealing with the lack of clarity as to whether it will cover your future electricity consumption. In contrast, RECs with additionality offer a seamless procurement process without the challenges associated with a VPPA, providing a flexible solution to address future electricity consumption.
SUN is to be commended for its progress in sourcing nearly 100% renewable electricity. By incorporating RECs with additionality into its strategy, the company could further enhance its environmental impact, accelerate the transition to renewable energy, and ease its journey to 100% clean energy.
Conclusion
SUN 's commitment to sustainability is nothing short of exemplary. With ambitious Carbon Change Goals, a clear pathway to Net Zero Emissions, and remarkable improvements in ESG reporting, the company is setting a high bar for environmental responsibility within the real estate industry. Its dedication to harnessing solar power and eliminating single-use plastics further demonstrates its strong commitment to making a positive impact on the environment. SUN's proactive approach to sustainability exemplifies what can be achieved when a corporation embraces its role as a steward of the planet and takes tangible actions towards creating a brighter, greener future. As we look ahead, it is clear that SUN will continue to lead the way in sustainable practices and inspire others to follow suit.
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