New World Development

NWD is actively developing business models for a low-carbon future. It aims for renewable energy to power all its rental properties in the Greater Bay Area by 2026 and in Greater China by 2031. The company’s roadmap for deploying this business model involves three steps: installing on-site renewables, procuring off-site renewable energy and purchasing renewable energy certificates (RECs). NWD was the world’s first property company to price a sustainability-linked bond in USD and has issued at least USD 219 million worth of bonds to finance its renewable energy project.

NWD has started understanding its transition needs. The company has implemented board-level oversight of climate change and offers the CEO incentives based on the achievement of the company’s emissions reduction targets. It has also undertaken climate change scenario testing, including a scenario for below 2°C, and is starting to implement measures to increase renewable energy use in its portfolio. However, it has not yet formalised its transition plan. The company can strengthen its plan by including quantified key performance indicators and financial commitments in the short and long term. It will also benefit from ensuring its board members have climate change expertise.

NWD does not disclose in-use emissions intensity data, or sufficient floor area and absolute in-use emissions data for the buildings in its portfolio in 2021 or previous years. As a result, it is not possible to provide a meaningful assessment of the company’s past emissions trend or projected future performance.

There is evidence that NWD is investing in research and development (R&D). NWD subsidiary New World China Land partnered with China Construction Eighth Engineering Division Corporation Limited, South China University of Technology and other partners to form a technological R&D team to develop and adopt C130 concrete with lower embodied carbon. However, the company does not disclose its total R&D investments, nor the proportion of its R&D expenditure invested in climate change mitigation technologies in the reporting year 2021.

NWD has set three science-based targets, all for 2030. The company has also publicly committed to setting a net-zero target through SBTi in the near future. To improve its low-carbon performance, the company should develop additional intermediate targets that align with a 1.5°C pathway. Setting regularly spaced intermediate targets at gaps of no more than five years will incentivise near-term actions towards its longer-term goals. Additionally, the company should report its base year emissions and disclose any use of offsets, to allow for a complete analysis of its targets and progress against them.

NWD has set science-based targets for emissions reductions until 2030 using 2019 as its base year. The targets include reducing its absolute scope 1 and 2 emissions by 46%, its scope 3 emissions embodied in its constructed buildings by 22% per square metre of construction floor area, and its scope 3 emissions from the use of its buildings by 30% per square metre of gross floor space. Additionally, the company also plans to set a net-zero target in the near future.

NWD plans for renewable energy to power all its rental properties in the Greater Bay Area by 2026 and in Greater China by 2031. To achieve this, NWD will install on-site renewables, procure off-site renewables and purchase RECs. To date, NWD has issued USD 219 million worth of bonds to finance its renewable energy project.

Besides installing renewable energy systems, the company is currently engaging with tenants to reduce emissions by incentivising reduced energy use. Additionally, NWD is partnering with other organisations to form a technological R&D team to develop and adopt C130 concrete with lower embodied carbon.

Despite showing public support for national initiatives such as the Hong Kong Stock Exchange ESG Reporting Requirements and Hong Kong 4T Charter, NWD does not disclose sufficient emissions intensity data to meaningfully assess its past emissions trend.

NWD sees climate change as an issue and has set SBTi-validated, short-term targets to reduce its emissions as well as to increase its renewable energy use. Though it appears NWD is making progress in transitioning its power sources to renewables, the company’s poor data disclosure means its emissions reduction progress is not transparent.

No evidence was found of NWD’s commitment to social dialogue or of the categories of stakeholders the company engages with on a just transition. Furthermore, no evidence was found to demonstrate the company’s ongoing social dialogue and meaningful engagement with affected stakeholders.

No evidence was found of the company undertaking just transition planning to mitigate the social impacts of the low-carbon transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue and with stakeholders in its just transition planning.

No public commitment by NWD was found stating its intention to create and support access to green and decent jobs as part of the low-carbon transition. Moreover, no evidence was found of the company’s action to promote these jobs in a way that ensures gender balance and inclusion of vulnerable groups. Additionally, no relevant disclosure was found of the company’s assessment of employment dislocation risks.

The company discloses the actions it takes to provide re- and up-skilling and training opportunities for workers and affected stakeholders. For instance, it trains employees on ESG-related issues, equips workers with latest knowledge around the climate crisis and provides formal training for employees. However, no relevant disclosure was found of the company embedding equality of opportunity for women and vulnerable groups in these actions. Furthermore, no evidence was found of the company having a process for identifying skills gaps for workers and affected stakeholders or a public commitment to help workers displaced by the transition to re- or up-skill.

No relevant disclosure was found to show if NWD identifies impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders.

No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.

No evidence in policy documents was found of a company commitment to respecting human rights or all of the ILO fundamental rights at work. Furthermore, the company can increase disclosure on its human rights due diligence process, engagement with affected stakeholders and grievance mechanisms available to workers and external stakeholders.

While the company discloses the gender of its workforce by employee category, no relevant disclosure was found of additional indicators of workforce diversity. Additionally, it can increase disclosure on its living wage, working hours and collective bargaining practices. Furthermore, no evidence in policy documents was found regarding a company commitment to respecting worker health and safety, nor was evidence found of a company commitment to gender equality and women’s empowerment.

No evidence was found regarding the company’s anti-bribery and anti-corruption policy, lobbying and political engagement policy or global tax strategy. Additionally, the company can strengthen disclosure regarding its protection of employees’ and customers’ personal data.