China’s corporate real estate (CRE) sector is leapfrogging ahead of its global counterparts in delivering on sustainability demands, as the country shows it means business by tackling environmental challenges head-on.
In 1999, Chinese environmentalist Ma Jun published China’s Water Crisis, which has been described as “the Chinese equivalent to Rachel Carson’s Silent Spring“, the book that was credited with igniting the environmental movement in the West in the 1960s.
Ma’s page-turner has played a part in raising public awareness, being the first major book on the subject of China’s environmental crisis. Over the past decade, the country has come a long way, with significant efforts made – both publicly and privately – towards confronting the pollution issue.
With environmental responsibility becoming a national priority, a JLL study, China: Leading at the Speed of Change, has found that sustainability is now also a top strategic demand for companies.
China CRE leads in sustainability commitment
The study highlights that more than half of China’s CRE teams – far more than CRE teams globally – have “adopted transformational strategies in which positive environmental and social outcomes are embedded into daily practices”.
There is no doubt that CRE professionals are feeling the pressure from senior leadership. Responses show that 77 per cent of CRE executives in domestic companies report increasing demand for addressing a sustainability and CSR agenda. This is in comparison to 51 per cent globally and 53 per cent among multi-national corporations (MNCs) in China.
In addition, nearly three-quarters (73 per cent) of domestic CRE teams report increasing demand for delivering environmental efficiency, in contrast to just 58 per cent globally and 53 per cent among MNCs operating in China.
The study also reveals that approximately two-thirds of China’s CRE teams expect to implement a range of workplace initiatives over the coming years.
Tangible sustainability strategies
Xuchao Wu, JLL’s Associate Director of Energy and Sustainability Services, Greater China, observes that in particular technology companies, such as Alibaba and Tencent, are adopting the “latest international thinking on green buildings when they build headquarters or select/fit out working spaces”.
An increasing number of companies across the board are incorporating sustainability in their request for proposals (RFPs), seeking green building certification as well as setting energy and emissions reduction targets and requirements for indoor environmental quality, he says.
Following an agreement with rooftop solar photovoltaics provider UGE and energy financier Blue Sky, many JLL-managed sites across China now have solar powered systems.
Why China is taking sustainability seriously
“Aside from wanting to address the issue of pollution, renewable energy options have become more viable with government incentives and pro-renewable regulations,” Wu says.
Market forces, too, are pushing companies towards more sustainable solutions, he says, pointing out that the economic slowdown has made cost control even more important to CRE.
CRE teams are recognizing that achieving energy savings is one the most effective cost-reduction means, says Wu, noting that “JLL’s capabilities in energy audit and energy management have gained popularity in some sectors”.
Wu also points out that both indoor and outdoor air quality has become a major concern in recent years, and now “CREs are under pressure to improve and ensure good air quality in their facilities” because of the “implications to employee health, wellbeing and productivity”.
While China’s unprecedented rate of industrial expansion has led to a host of environmental problems, current trends show that decisive action is being taken at both the government and private sector levels to address these. In this area, CRE executives can play an important role in making China’s future a green and prosperous one.