Tuesday, January 23, 2007

GPT going green at a cost

Australian property company GPT Group Ltd (ASX:GPT) has decided to purchase a proportion of its energy from renewable sources in 2007.

The move follows a World Wide Fund For Nature campaign that asked corporations to examine building-related greenhouse gas emissions. The main issue is that renewable energy sources are more expensive than traditional fossil fuel-generated electricity. But depstie this GPT has agreed to use up to 25% green energy. WHile this won't save the company any money it will eliminate approximately 23,000 tonnes of carbon dioxide per year.

GPT has entered into an agreement with Origin Energy Ltd (ASX:ORG)

Reading up on this article I initiually thought this was a stupid idea by management. Why increase your costs when you are not being forced. It seems to go against all business sense to nominate yourself to pay a higher cost when there is a cheaper alternative and there is no difference in quality. But then I started to think about it more and did a bit of research. Its not going to cost an extragant amount to change over the renewable energy and I am sure they have got into a deal with Origin Energy. Then there is the pretigue of being an environmentally friendly company. This is where they hope to make their gains. If they are perceived as an environmentally friendly company then they will get the "socially responsible" funds to invest with them. This can be a huge chunk of money coming their way and it could, if it works, increase the share price substanially. Only time will tell.

Good Luck Investing.

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