As the need for green transformation in the manufacturing industry becomes increasingly urgent, industrial real estate is also rapidly evolving to keep pace with the opportunity, enhancing competitiveness and attracting investors. Emphasis on sustainability
In recent years, the ESG criteria (E: Environment, S: Social, G: Governance) in enterprises have been mentioned more than ever as a measure of corporate performance related to sustainability and the value it brings to the economy, society, and environment. Starting from October 1, 2023, under the newly enacted EU law – Carbon Border Adjustment Mechanism (CBAM), manufacturing companies will have to prove that their production activities are aimed at reducing carbon emissions when entering this market. The determination of governments forces industrial manufacturing enterprises – which account for a quarter of carbon emissions – to quickly transition and green their production models.
For the industrial real estate sector, the application of ESG criteria is believed to help businesses increase competitiveness and attract investors. According to Cushman & Wakefield, in the commercial and industrial real estate sector, just a few years ago, ESG factors were less mentioned in negotiations, but now they are a mandatory requirement and seen as an opportunity to significantly reduce risk for proactive businesses. Investors (tenants in industrial parks) focus more on ESG indicators because they realize that companies focusing on ESG and reducing carbon emissions will bring them superior investment returns compared to companies in the same industry.
“For future real estate projects, if ESG is not established early, enterprises will easily be eliminated,” said Trang Bui – General Director of Cushman & Wakefield Vietnam.
Ecological Industrial Park Model
Attracting more than 500 million USD in FDI capital to Hai Duong since the beginning of 2023, An Phat 1 Industrial Park (a member of An Phat Holdings) is one of the prominent environmentally friendly industrial real estate projects in terms of investment attraction in the province.
The strength of An Phat 1 lies in being a member of An Phat Holdings – a multi-industry business ecosystem capable of supporting other enterprises and with experience in successfully developing previous industrial real estate projects. However, according to Mr. Pham Van Tuan – Deputy General Director of An Phat Holdings, besides factors such as geographical location, infrastructure, and road traffic, investors in recent years are particularly concerned with environmental protection criteria in industrial parks.
Capturing the needs of investors, An Phat 1 Industrial Park has implemented the orientation of building a high-tech industrial park, with environmental-friendly criteria being the top priority of the enterprise. Accordingly, the businesses prioritized for attraction into the industrial park are those in non-polluting manufacturing sectors, and enterprises in the industrial park also need to apply a management system for production and environment according to the standards of the International Organization for Standardization (ISO). In addition, An Phat 1 also deploys one-stop services supporting businesses from legal procedures, investment consulting, logistics, construction, recruitment, dormitories, industrial meals, etc.
To meet the needs of businesses for high-skilled labor, An Phat 1 has partnered with universities, colleges, and professional training institutions to train and recruit quality labor. Additionally, to improve the quality of life and social security for workers, KCN An Phat 1 has also allocated 47 hectares to develop commercial and service areas.
“Developing the model of a high-tech, environmentally friendly industrial park is an inevitable trend for industrial real estate companies because of the sustainable values it brings not only to businesses but also to the community, environment, and society. Therefore, An Phat 1 is enhancing the application of ESG criteria in managing and developing the project to be able to bring to the market comprehensive and meticulous industrial real estate products in all areas, from infrastructure, environmental protection to the quality of life for workers in the industrial park,” shared Mr. Tuan.
According to Mr. Tuan, although still in the construction phase, An Phat 1 Industrial Park has received attention from foreign investors and by the end of 2023, the occupancy rate is expected to reach 80% of the area. When operational, An Phat 1 Industrial Park is expected to create 27,000 jobs, contributing significantly to the economic and social development of the locality.
Source: Vietnamnet
