Binh Duong Industrial Park is Frasers Property’s first industrial development in Vietnam
Ranked among the five countries likely to be most affected by climate change, Vietnam has embarked on a journey to reach net-zero by 2050.
It has set ambitious goals to support green growth, which include expanding the green economy’s contribution to GDP by almost 4.5 times to US$30 billion by 2050 and boosting reliance on renewable energy goal to 67.5 percent by 2050.
Decarbonising buildings, which typically account for a third of global greenhouse gas emissions, is also an important goal. Vietnam’s Ministry of Construction has made clear that green development projects are key to achieving the country’s goals of cutting carbon emissions from building materials production, buildings and industrial processes by 74 million tonnes.
In light of this, there are significant opportunities across the real estate sector to harmonise and elevate sustainability knowledge, as well as to bolster efforts towards greening the sector.
Through our Vietnam business unit, we are doing our part to support the country’s net-zero ambitions in two ways: accelerating concrete action in green real estate, and forging stronger partnerships across the value chain to catalyse collective green change.
Employees having a discussion at Binh Duong Industrial Park
To expand the pivotal role that real estate can play in meeting climate goals of a nation of over 97 million people, action starts ground-up, literally. There is an urgent need to construct more green buildings, which real estate consultancy Jones Lang Lasalle (JLL) predicted in early 2023 will “quickly become the most sought-after buildings and spaces in the market to occupiers”. Currently, good-quality, eco-friendly buildings are scarce, JLL noted. There are over 300 projects meeting green construction standards with a total floor area of about 7.2 million square meters, and growth in the green buildings sector has been slow according to the Ministry of Construction.
Recreational spaces at Binh Duong Industrial Park support occupiers' health and well-being
The demands from prospective tenants are changing rapidly, with conversations increasingly centred on the sustainability standards and performances of our properties.
These enquiries are mainly from multinational corporates (MNCs), many of whom have ESG commitments including reducing their Scopes 1, 2 and 3 carbon emissions. This, in turn, prompts other companies that form part of the MNCs’ value chain to align with green building choices.
We view this as a way to help more companies, both local and multinational, better understand the business case for green buildings.
Our green-certified facilities can provide longer-term cost savings due to reduced energy consumption. For example, after we replaced air-cooled chiller systems with water-cooled ones at our Ho Chi Minh City commercial development Melinh Point, tenants enjoyed improved system reliability and energy efficiency, while reducing their energy consumption by 23 per cent.
To further engage existing tenants at all our green-certified developments, we hold regular committee meetings to address their queries and explore other areas to improve sustainability practices.
Other areas of support we offer our partners and tenants are in helping them navigate local regulatory requirements for green facilities, while sharing insights about socially responsible practices, such as creating a healthier working environment to boost employees’ productivity.
Melinh Point, Frasers Property’s Grade A office building in the heart of Ho Chi Minh City, Vietnam
Frasers Property values every opportunity to engage all stakeholders across the real estate value chain, and explore sustainable pathways together.
We are thankful for invitations to do so at national and regional forums and seminars such as the Ho Chi Minh Economic Forum, Vietnam Green Building Week and Vietnam Green Economy Forum.
Besides collaborating with local partners in Vietnam’s public and private sector on real estate sustainability, we also work closely with international players to implement the latest green technologies and solutions. These allow best practices to be learned, applied and adapted across our multinational footprint.
One example is our strong partnership with Singapore-based utilities group SP Group, which has been working with Frasers Property and Temasek Group on a feasibility study to explore a Distributed District Cooling network in Tampines, a regional centre in the eastern part of Singapore. We continued our partnership with SP Group to develop integrated smart energy solutions in Binh Duong Industrial Park in Vietnam.
Another key partner is the Vietnam Green Building Council (VCBC). We support the VCBC by participating in the Technical Advisory Committee, sharing our expertise in green building design and materials, as well as green financing.
Partnerships play a key role in enabling us to work with like-minded stakeholders to realise sustainable outcomes in real estate.
Mr. Lim Hua Tiong, CEO of Frasers Property Vietnam at the signing ceremony with Mr. Brandon Chia, Managing Director of Southeast Asia and Australia, SP Group
Industry-wide partnerships are also key to driving awareness and alignment towards green certifications for the real estate sector.
As the first real estate company in Vietnam with globally recognised SBTi-approved (Science Based Targets Initiative) targets, FPV adopts industry-leading energy management practices to further improve the sustainability credentials of our properties.
We actively share our experience updates on green standards compliance with industry peers, as certifications that provide a common language for all stakeholders to align ESG actions.
Making progress in relation to SBTi and GRESB not only fosters trust and confidence in the quality of Vietnam's green buildings, but also helps strengthen the nation’s reputation as a sustainable industrial hub attractive to investors.
As part of efforts to further elevate our ESG performance, our Vietnam business unit is targeting to raise our portfolio’s GRESB four-star rating to a five-star rating (in Standing Investments) by 2024.
Green knowledge is power. By building the foundations of greater awareness of as well as understanding and support for green buildings, we hope to contribute to wider industry efforts to accelerate Vietnam’s net-zero journey.
For more information on our ESG journey in Vietnam and across other markets, please read our ESG Report 2023.
In 2023, Frasers Property Vietnam achieved its first ever 5-star rating for its development portfolio, improving by 20 points overall to 97 out of 100 while in Standing Investments, we attained a 4-star rating, improving by 2 points overall to 84 out of 100.
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