The building construction and operation industry currently contributes nearly 40% of global carbon emissions. Therefore, the emergence of this concept is crucial. ESG real estate This is a necessary step towards solving environmental problems and creating a higher quality living space.
What is the concept of ESG real estate?
ESG real estate refers to real estate projects developed, constructed, and managed based on Environmental, Social, and Governance standards. Instead of focusing solely on short-term profits, these projects aim for sustainable value for investors, residents, and the surrounding community.
3 elements that constitute an ESG real estate project.
Environmental Factors: This is most evident through the "green buildings." The project applies energy-saving technologies, installs solar panels, rainwater harvesting systems, and uses environmentally friendly building materials such as unburnt bricks or low-emission concrete.
Social Factors: Focus on human experience and well-being. An ESG-certified project needs ample green space, facilities for people with disabilities, a high-quality air filtration system, and convenient access to public transportation.
Management Factor: Regarding legal transparency, building management and operation should utilize smart technology (Proptech) to optimize costs and ensure security and safety for residents.
Benefits of investing in ESG real estate
Increase in asset value: Buildings with green building certifications (LEED, LOTUS, EDGE) typically command rental and sale prices 10-20% higher than the average.
Saving operating costs: Optimizing electricity and water usage can significantly reduce monthly bills for users.
Attracting foreign investment: Major investment funds now only disburse funds to projects that demonstrate a commitment to ESG.
In Vietnam, ESG real estate projects are gradually becoming the new standard, affirming the position of developers with a long-term vision and responsibility towards future generations.