China’s Hang Lung & France’s LVMH Announce Groundbreaking Sustainability Partnership To Accelerate Joint ESG Goal
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A groundbreaking partnership between Chinese real estate leader Hang Lung Properties and French luxury giant LVMH Group is forging new ground when it comes to sustainable building.
Hang Lung and LVMH have officially partnered on a three-year innovative collaboration on climate and sustainability action across their respective real estate and retail businesses that will see the two Groups work together with a clear focus on five key areas, and will engage their respective employees and suppliers to co-create solutions to the ESG issues they face. The partnership is expected to inspire many more landlords and tenants to work creatively for the greater good.
The joint partnership, the first of its kind globally, spans Hang Lung’s properties across seven mainland Chinese cities, covers 26 LVMH brands in more than 90 retail spaces, and hopes to redefine the relationship between property owners and leading retail brands when it comes to sustainability. Focus areas include Climate Resilience, Resource Management, Wellbeing, Sustainable Transactions, and Sustainability Communication, events and Progress Reviews. The partnership will run until the end of 2025, and is expected to be renewed thereafter.
This unique and innovative partnership, which sets an example for both the real estate and retail industry globally, is rooted in the premise that a more systemic approach is required to better meet the needs of the current climate crisis. Both Hang Lung and LVMH are committed to a deeply collaborative approach with regular progress monitoring and open sharing, and thoughtful engagement amongst key stakeholders such as employees and suppliers. And at the upcoming Real Estate & Climate Forum, co-organized by the two Groups, a digital platform enabling a tailor-made experience for every user that will allow for curated ideation and consensus-based decision-making.
“A positive sum game in a zero sum world”
At the launch ceremony held in Paris and broadcast across various cities including Hong Kong and Shanghai, Adriel Chan, Hang Lung Properties’ Vice Chair and Chair of Sustainability Steering Committee, told the audience that “sustainability is a positive sum game in what often feels like a zero sum world.”
Chan underlined the importance of collaboration when it comes to reaching ambitious goals around sustainability. Of Hang Lung and LVMH’s new plans, he said the two giants are “excited to launch this groundbreaking partnership, leveraging our strategic relationship to help ensure a sustainable future for the world while providing unique experiences to our customers. Although Hang Lung already has ambitious ESG goals and targets, the partnership with LVMH takes our sustainability agenda to the next level, demonstrating how landlords and tenants can work creatively together for the greater good.”
Antoine Arnault, LVMH Image and Environment, spoke of how their customers were increasingly looking for sustainable shopping spaces. “The design of our stores, like that of our products, is inspired by LVMH’s core values of creativity, innovation and excellence. And this of course means guaranteeing the environmental performance of our over 5,550 stores around the world.”
Chan also anchored the commitment made to China’s overall carbon targets, adding: “We are confident that the partnership will make a positive impact in support of China’s goals to peak its carbon emissions by 2030 and to reach carbon neutrality by 2060.”
A passion and dedication to sustainability across all lines of business
Chan is Vice Chair of Hang Lung Properties, the real estate giant that manages over 58 million sq. ft. gross floor area in China with flagship properties in nine cities including Shanghai, Shenyang, Jinan, Wuxi, Tianjin, Dalian, Kunming, Wuhan and Hangzhou.
After joining Hang Lung back in 2010, Chan has worked his way up from leasing and finance to today holding the responsibility for the Company’s strategic direction. His great passion, however, is the environment. In fact, Chan manages the Company’s Sustainability Steering Committee and works closely with General Manager – Sustainability, John Haffner, who joined Hang Lung in 2019 and is responsible for formulating the group-wide sustainability strategy and driving its execution.
Chan has spoken publicly at length about the Company’s commitment to tackling climate change, stating that Hang Lung is among the first real estate companies in Asia to have committed to setting both near- and long-term targets to reach net-zero value chain greenhouse gas emissions by no later than 2050 in alignment with Science Based Targets initiative’s (“SBTi”) Net-Zero Standard, the world’s first framework for corporate net-zero target setting in line with climate science.
He has also shared the challenges of engaging employees on sustainability and some key learnings from his journey including the importance of making the corporate sustainability aspiration digestible and relatable to his employees with top-level commitment to an actionable sustainability framework to engaging and providing them with a clear agenda for the short-, near- and long-term, along with continuous internal education and events and crucially, buy-in at all levels of the organization, highlighting that in the Asian context, top-level commitment is key.
Hang Lung boasts a range of company-wide sustainability achievements, from an AA rating by the Hang Seng Corporate Sustainability Index Series, to a “A” MSCI ESG rating, to maintaining a 4-star GRESB performance rating. The Company has also been listed as an Index Component of the Dow Jones Sustainability Indices in the Asia Pacific Index since 2017. In addition, over 77% of its overall construction floor area is certified with green buildings, including 32 Leadership in Energy and Environment Design (LEED) gold or above certifications or pre-certifications. The company has been repeatedly awarded for its sustainability reporting efforts too, including winning the Grand Award in Best ESG Report at 2022’s Hong Kong ESG Reporting Awards (HERA) and the Excellence Award in the Environmental, Social, and Governance Reporting at the 2022 Hong Kong Management Association (HKMA)’s Best Annual Reports Awards.
Furthermore, Hang Lung’s Spring City 66 in Kunming also marks the Company’s first development and China’s Yunnan Province’s first commercial complex, featuring a world-class shopping mall, Grade A office space and a hotel and residential tower that is powered by 100% renewable energy, which achieve net zero carbon emissions for both landlord and tenant annual electricity consumption.
To build on the success of the Company’s sustainability progress, Chan further stated at the launch ceremony in Paris “Hang Lung and LVMH have made explicit in our agreement that we encourage one another to work with other tenants and other landlords to further the sustainability agenda, and so we welcome the proliferation of these types of agreements going forward.”
Plans for dedicated events are in the works including the first Real Estate & Climate Forum, which will take place on November 24 and 25, 2022, and unite changemakers across both industries to help formulate solution-based plans around twelve areas from energy efficiency and circularity to social impact.
All images courtesy of Hang Lung Properties. Lead image: Hang Lung Properties’ Heartland 66, Wuhan was awarded the two Gold certificates under Leadership in Energy and Environmental Design (LEED) for Core and Shell Development – Gold Level by the U.S. Green Building Council in 2021.
This is a Green Queen Partner Post.