Real Estate ESG
As the world is adapting the 'post-pandemic' era, the way of living has already been changed, people are generally being more conscious on health and safety as well as sustainable development. Environment, social and governance (ESG) performance and compliance affect the financial performance and sustainability of each company.Investors are increasing concerned about whether businesses are formulating transition action plan to transform their business model into low or even zero carbon.Among the carbon intensive industries, real estate and construction industry has been put under the spotlight.
According to the 2021 Global Status Report for Buildings and Construction, the construction and operation of buildings was responsible for 28% of global energy-related carbon dioxide (CO2) emissions and the energy use for the construction and operation of buildings totaled 36% of global demand by 2020. According to the report from Professional Committee of Building Energy and Emissions (2021), the construction of buildings was responsible for 50.6% of the national carbon dioxide (CO2) emissions in Mainland China. Therefore, being one of the 'high carbon' industries, there is an urge for real estate and construction sector to reduce greenhouse gas emissions in its operations.
Mainland China pledge to peak its carbon dioxide emissions before 2030 and achieve carbon neutrality before 2060 with its 'dual carbon' goals. China also has a long-standing cooperation with EU on the climate change in committing the Paris Agreement. As such, the Chinese government values the importance of ESG and keeps enhancing the investment and regulatory requirements. For example, the Ministry of Ecology and Environment is planning to introduce a mandatory environment information disclosure system by 2025. In Jul 2020, HKEX has also implemented new ESG reporting requirements regarding the mandatory disclosure of a board statement and Directors' roles, the materiality assessment and climate change.
ESG is no longer a nice to have nowadays. The world has been evolving from incorporating ESG data into investment analysis to assessing ESG's impact on portfolios, aligning capital with changes in the marketplace.With increasing and changing complexity of real estate markets, and with real estate regulations becoming more and more challenging, it is crucial to use local expert to navigate real estate matters.
Our BDO Real Estate and Construction team has positioned ourselves for the future and ready to provide exceptional services for you.