Real Estate Enterprise ESG Report Observation: Green Building Becomes a Common Pursuit

Source: Rule of Law Daily · Rule of Law Weekend

Focusing on ESG Series Reports of Chinese Enterprises

Legal Weekend Reporter Yang Daiyuan

Recently, Yuxi City, Yunnan Province issued the "Implementation Plan for Government Procurement Support of Green Building Materials to Promote Building Quality Improvement", proposing to actively promote the use of green building materials in government procurement engineering projects from 2023, and strive to achieve a green building proportion of over 90% by 2024.

In fact, multiple provinces, cities, and regions are actively exploring and practicing the field of green and low-carbon buildings. According to data released by the Ministry of Housing and Urban Rural Development in the first half of this year, as of the first half of the year, the proportion of newly built green building areas in China has exceeded 90%.

Behind this data is the rise of real estate company ESG. For the real estate industry, every step from product design to building material selection, to subsequent construction, including final delivery, use, and operation, is closely related to carbon emissions. In the context of "dual carbon", improving ESG capabilities, achieving sustainable development, and assisting carbon emissions have become a topic that the industry must pay attention to.

The "ESG Action Report of Chinese Listed Companies (2022-2023)" released by the Daily Economic News in collaboration with the Green Gold Institute of China University of Finance and Economics shows that overall, the ESG performance of listed companies in the real estate industry is relatively good: over 70% of enterprises (about 72.81%) are rated at A (including A+, A, A -) and B (including B+, B, B -) levels, accounting for 36.84% and 35.97% respectively. The "Rule of Law Weekend" selected ESG reports from five leading listed real estate companies to analyze and observe the understanding and performance of ESG by Chinese real estate companies.

Green Building: The Common Pursuit of Real Estate Enterprises

The so-called "green" of "green building" does not refer to general three-dimensional greening or rooftop gardens, but represents a concept or symbol, referring to a building that is harmless to the environment, can fully utilize natural resources of the environment, and is built under the condition of not damaging the basic ecological balance of the environment. It can also be referred to as sustainable development building, ecological building, returning to nature building, energy-saving and environmentally friendly building, etc. The basic connotation of green buildings can be summarized as: reducing the load of buildings on the environment, that is, saving energy and resources in green buildings; Provide a safe, healthy, and comfortable living space; Affinity with the natural environment, achieving harmonious coexistence and sustainable development between people, buildings, and the environment.

In the 1960s, American architect Paul Solary proposed a new concept of ecological architecture. With the United Nations World Commission on Environment and Development proposing the slogan of "sustainable development" for the first time, and the gradual improvement of energy-saving building systems, this concept has gradually been widely applied in developed countries in Europe. In 1990, the first green building standard was released in the UK. Subsequently, various countries and regions have introduced their own green building standards, and China officially issued the "Green Building Evaluation Standard" in 2006. With the deepening of the concept of sustainable development and the promotion of the "dual carbon" goal, the concept of green building has become increasingly recognized and developed in the industry. From the ESG reports of various companies, it can also be seen that green building is the top issue of concern for each company.

Specifically, China Resources Land is focusing on key technologies and application development in the production of technology-based green and environmentally friendly building materials, jointly building the "Green and Environmental Building Materials Innovation Consortium". Currently, it has carried out scientific research projects such as "PET based cement composite green and low-carbon building materials" and "polymer/cement filled green building materials". During the reporting period, China Resources Land obtained 12 green building projects, totaling 1.8848 million square meters.

China Overseas focuses on 11 energy-saving and carbon reduction projects, including building energy conservation and efficient energy utilization. Through integrated management of "China Overseas Design, China Overseas Construction, and China Overseas Operation and Maintenance", combined with the green electricity trading market or carbon trading, we explore ways to implement the dual carbon concept in construction projects, and build the first 5A level near zero energy consumption high-rise office building in China.

Based on the "Green Building Evaluation Standards" (GB/T 50378-2019), Vanke has developed the "Guidelines for Green Building Evaluation Standards of Vanke Group". At the same time, corresponding green building goals have been formulated for each subsidiary's characteristics. For example, its Boyu mainly focuses on the development of long-term rental apartments. In the product development process, Boyu's newly opened self-supporting project uses 100% variable frequency primary energy consumption air conditioning and water heaters. In 2022, Boyu will include "advocating tenants to save energy and reduce unnecessary energy waste" in the tenant agreement. In 2023, Boyu will continue to promote the inclusion of energy conservation initiatives in the tenant agreement and the implementation of paperless leasing contracts.

Poly fully considers green construction factors such as the use of green energy-saving materials, the application of ultra-low energy consumption technology, and the efficient utilization of building energy in the architectural design stage, and drives green construction with green design. In 2022, the company completed 1 international level green building project certification and 3 international level green building pre certification, with Foshan Poly Center obtaining LEED platinum level operation certification, reaching the highest industry standard.

Longhu focuses on various research and development work. As of December 31, 2022, Longhu has applied for 150 prefabricated patents and formulated multiple internal enterprise standards, such as the "Standard for prefabricated wall decoration panel systems", establishing and improving the Longhu prefabricated system; At the same time, I participated in and developed industry group standards, such as the "Technical Regulations for Hotel Prefabricated Decoration". In addition, in 2022, Longhu will build ultra-low energy buildings in Shanghai/Hefei, conducting specialized research and development on ultra-low energy building systems to provide high-quality living environments while reducing building energy consumption.

Energy conservation and emission reduction: multi-dimensional efforts in the industry

The real estate industry is the main consumer of energy. Operational emissions (energy consumed by building operations) account for 28% of the global total carbon emissions, while implicit carbon emissions (materials and buildings processed throughout the entire building lifecycle) further generate 11%. Landlords, operators, and households are all facing pressure to reduce carbon emissions. From the ESG reports of various leading enterprises, their focus is mainly on promoting clean energy, reducing material waste, and implementing green engineering to achieve the goal of energy conservation and emission reduction.

Poly regards reducing the loss of building materials as an important part of green construction, actively adopting advanced construction processes, equipment, and technologies to reduce the waste of engineering materials during the construction phase of the project. At the same time, the company vigorously promotes the use of clean energy in daily operations, implements lighting renovation, and transforms some public area lighting fixtures into photoelectric or wind power dual-use types, achieving "low-carbon lighting". In 2022, Poly Property completed 183 energy-saving renovation projects at the equipment end, replacing over 70000 sets of LED lighting fixtures, achieving a reduction of approximately 40% in energy consumption for the renovation projects.

Vanke continues to promote technological and material innovation, conducting research on the comprehensive utilization of industrial waste represented by fly ash, slag, desulfurization gypsum, etc., and developing low-carbon ceramic tile adhesive, gypsum based self-leveling, lightweight plastering gypsum, etc. The carbon emissions of new materials can be reduced by 23.6% to 75.3% compared to traditional products. Vanke focuses on carbon emission management in data centers, optimizing and improving usage efficiency, business upgrades, and management measures, and practices the construction of green and low-carbon data centers. As of December 2022, a total of two data centers have been released, resulting in a year-on-year decrease of 697.82 tons in carbon emissions compared to the Vanke Data Center in 2021.

Longhu Group combines passive energy conservation with active energy conservation in the ultra-low energy consumption technology solution of the Lingang New Area of the Shanghai Free Trade Zone to maximize the reduction of building energy consumption. This project has a total of 14 buildings, with a total energy consumption of approximately 8.25 million kWh. It is expected to save 3.6 million kWh of electricity and 120000 square meters of natural gas annually, reducing carbon emissions by 3265 tons annually, which will help Shanghai achieve its "carbon peak" goal by 2025.

China Resources Land has effectively reduced energy consumption and carbon emissions by setting energy-saving goals, strengthening energy statistics, establishing an energy management and monitoring platform, implementing energy-saving projects, and using clean energy. In 2022, China Resources Land had a comprehensive energy consumption of 122047 tons of standard coal, and a comprehensive energy consumption of 0.0065 tons of standard coal per 10000 yuan of operating income (comparable price). At the same time, we will increase the pilot application of distributed photovoltaic power generation systems and establish renewable energy targets for new complex projects. As of the end of 2022, distributed photovoltaic power generation systems have been built on the roofs of 11 commercial projects in operation, including Yantai Vientiane Hui, Wenzhou Vientiane City, and Ningbo Vientiane City, with a total power generation capacity of 1.13 million kWh.

Social responsibility: more localized

In the Chinese concept, 'having one's own house' is particularly important. The real estate industry in China is an important pillar industry of the national economy. On the one hand, the real estate industry has made significant contributions to driving stable economic growth, and on the other hand, it also faces significant challenges in sustainable development such as environmental responsibility. This requires real estate enterprises to take more into account the company's social responsibility when fulfilling their ESG responsibilities. Real estate ESG evaluation also focuses on the impact of real estate projects on communities, people, customers, and stakeholders. It may include issues related to building safety, privacy, homeowner rights, tenant rights, community relations, and ethical conduct.

In China, the ESG reports of various industries have distinct localization characteristics regarding social responsibility, such as focusing on rural revitalization and community construction.

China Resources Land has undertaken the construction of urban infrastructure in multiple cities, actively creating urban supporting services, improving urban functions, and empowering the urban ecosystem. In 2022, China Resources Land acquired nearly 40 new government construction agencies for public construction; Become a sports venue operating unit for a total of 184 schools in five administrative regions of Shenzhen. In terms of social welfare, China Resources Land spent a total of 6.4816 million yuan in charitable donations in 2022, with over 10000 employees volunteering for service; In terms of rural revitalization, as of the end of December 2022, China Resources Land has participated in the construction and delivery of 11 China Resources Hope Towns, and is planning to build 6 towns. Through governance innovation, consumption assistance, employment assistance, and establishing a new atmosphere, new models of rural revitalization have been explored.

Poly Company strives to explore new development models for affordable housing construction while providing commercial housing. As a central enterprise, it continues to carry out affordable housing construction work. As of the end of 2022, the company has a total of 181 affordable housing projects (including those supporting affordable housing), with a total construction area of 9.44 million square meters. In terms of urban co construction, as of the end of 2022, the company has participated in and followed up on over 130 urban renewal projects, involving 25 cities; Covering old villages, factories, old cities (including shantytown renovation), development of retained land, and primary land consolidation, involving over 100000 households undergoing renovation.

Longhu has launched the "Huguang Plan" to focus on rural education issues. As of now, the "Huguang Plan" has helped improve the leadership of 32 school principals and leadership teams in key rural revitalization counties such as Sichuan, Chongqing, and Guizhou, as well as the professional development of 216 rural teachers and the improvement of the literacy of 3422 rural students. In addition, the "Stream Plan" continues to provide support and assistance to disadvantaged and disabled populations in rural areas, improving their economic and living conditions. As of 2022, Longhu has achieved an average income increase of over 15000 yuan for 4121 disabled households through the industrial assistance model of "entrepreneurial base assistance+industrial talent cultivation+agricultural assistance platform".

Editor in Chief: Wei Wenjie