As the effects of climate change are becoming increasingly apparent and the race towards carbon neutrality intensifies, businesses are expected to play a more active role in reducing their carbon footprint. In July 2022, the Vietnamese government approved the National Strategy on Climate Change for 2050, under which the country aims to lower its greenhouse gas emissions by 43.5% by 2030 and achieve peak carbon emissions in 2035 and net zero by 2050.
As part of the ongoing efforts to meet the above targets, Vietnam has been prioritizing projects that use green production methods and green energy and foster eco-friendly development. The country has set a target to increase its green economy’s contribution to GDP from $6.7 billion in 2020 to $300 billion by 2050.
According to a report by Cushman & Wakefield, about 40% of all greenhouse gas emissions globally come from the real estate industry, which includes commercial and residential real estate. Amid the fast-growing demand for industrial assets in Vietnam such as land, factories, and warehouses among the manufacturing, e-commerce, 3PL, and retail sectors, industrial real estate developers are playing their part in cutting emissions, starting from the planning process.
In the DEEP C Industrial Zone, for example, the Belgian developer has been demonstrating its environmental responsibility through renewable energy and recycling, with an aim to transform the zone into an eco-industrial park. Last year, DEEP C kicked off its solar energy development project with the installation of solar panels on the roof of 20,000 square meter workshops in DEEP C Hai Phong I.
Similarly, BW Industrial Development (BW), Vietnam’s leading for-rent logistics and industrial real estate platform, has been actively promoting initiatives to develop sustainable infrastructure. The developer incorporates rooftop solar into all new and ongoing projects, in addition to installing weather-proof, water-resistant solar LED streetlights with longer life, demonstrating its practical approach to decarbonization.
As a true testament to its commitment and dedication to ESG principles, BW has earned multiple LEED certifications, with several of its ongoing projects, including Xuyen A, Vinh Loc, and VSIP Bac Ninh, pending to be certified by the globally recognized green building certification program.
Furthermore, over the next few years, in line with its ESG Framework and in pursuit of the Targets to 2030, BW will ensure that all new projects undergo environmental due diligence and all new greenfield development projects be subject to environmental impact assessment.
“Future-proofing assets are more crucial than ever, whether it be low-carbon solar panels or LED lighting or electric vehicles. We believe that it is only a matter of time that ESG priorities will be embedded in Vietnam’s regulatory framework. That said, a large number of the multinational companies that we lialise with on a daily basis are interested only in space that fulfils the ESG requirements of their home country. Hence, for a leading developer like BW, so long as it is efficient, ESG application is a must-have” said Lance Li, CEO of BW.
BW LEED-granted Phu Nghia project in Hanoi
In fact, on October 1, 2023, EU’s landmark tool to fight carbon leakage – Carbon Border Adjustment Mechanism (CBAM) entered into application in its transitional phase. In this phase, EU importers of cement, iron and steel, aluminum, fertilizers, electricity and hydrogen are required to report on the volume of their imports and the greenhouse gas emission embedded during production. In this light, industrial parks, and ready-built facilities, designed and built with ESG principles in mind, such as those of BW, are ideal options for investors targeting the EU market.
