I have done business in China for over two decades, witnessed the commissioning of the Three Gorges Dam, observed the rapid city landscape changes brought about by the 2008 Beijing Olympics and experienced the tremendous force of urbanisation, growth and positivity. I marvel at the ability to do a 3 seconds cashless payment be it at a small town farmers’ market, or in bustling Shanghai, to pay for groceries, a meal or a taxi ride, all with your own smartphone.
The trade-offs from such prosperity are familiar to those living in major commercial cities around the world – small space, high stress and poor air quality. People increasingly work and live in high rise buildings. According to JLL’s research, in 2020 the stock of Grade A offices in China totalled 72.59 million sqm, and is expected to increase 7 to 8 million sqm per year over the following two years. Although not entirely comparable but useful as a reference, in 2018 U.S. commercial buildings (which includes all grades of offices, schools, health care facilities, warehouses, etc) contained a total of 9,000 million sqm. This points to the estimation that there are a lot of commercial buildings in China, many of them are newly built, and the total amount of commercial space in China is not far off that in the U.S.
Innovation is driving change
An extraordinary amount of innovation is happening in China to tackle issues of health and the environment. These innovations include technology, behavioural changes and ways of doing things. Shenzhen became the first city in the world to electrify all its 16,359 public buses, with the Chinese cities of Shanghai and Hangzhou on a similar trajectory. A useful case study is the capital city Beijing which for years experienced poor air quality.
“In the winter of 2012, we suffered several severe pollution episodes,” said Liu Xin, Programme Director for Environmental Management at Energy Foundation China. “From the central to the local government, from industry to citizens – everyone came to hate air pollution.” Through investment in technology, enacting policies, and behavioural changes such as embracing bike-sharing, United Nations Environment Programme reports that Beijing’s annual average PM2.5 concentration in 2017 dropped 35% to 58ug/m3 compared to 2013. The surging awareness and determination to tackle the problem is evident from Beijing increasing its air pollution-related budget from US$434 million in 2013 to US$2.6 billion in 2017.
Tsing Capital is a leader in impact investment in China and is the first Chinese fund management company that applies systematic ESG reporting in early and growth stage equity investment. Tsing Capital’s Managing Partner Larry Zhang says, “From my perspective of doing impact investing practice in China over the past 2 decades, here are a few observations I would like to share. Starting from waste treatment and energy efficiency, China’s sustainable development has developed to renewable energy, cleantech, and expanded further into more diversified sectors including EV, green building, smart transportation, smart city and AI.
Penetrating increasingly more industries, the sustainability theme dominates most industrial and commercial areas. Business firms are highly encouraged to commit heavily to sustainability by the Chinese government which from time to time comes out with favourable policies. Continuous development of sustainable industries sees China as a huge application market for all kinds of innovation and sustainable technologies from overseas, as well as a key source providing the world with some new energy products like solar, EV, etc. The diagram below summarises our firm’s view on the development of sustainability in China.”
RESET drives action
A different perspective is offered by RESET, a world-leading set of standards and assessment tools to develop actionable, long term strategies toward health and sustainability for the built environment. RESET’s President, Stanton Wong, says, “Healthy and sustainable built environments in China largely revolve around compliance. The consideration of most Chinese real estate companies is to make sure that they fall under government regulations and are ready for upcoming changes since the government has been known to be very quick with new regulation implementation and enforcement. Therefore, there is a lot of interest in all Chinese companies in understanding the intentions behind the 5 Year Plans so they can be better prepared.
Currently, the main focus of the commercial built environment in China is on sustainability. With a very immediate focus on carbon, there is a lot of interest in how to lower embodied and operational carbon consumption from leaders in the China real estate industry. There is currently less interest on the health side of built environments except for on the very high end or for multinational corporations. Alternatively, residential is exactly the opposite, with most families caring much more about health than sustainability.
“No obvious solutions”
Building owners and companies are currently exploring how to achieve carbon targets as there is no obvious industry solution that is both effective in implementation and cost. For operating carbon, RESET believes the key will be establishing strong data sets on how buildings are operating and to increase visibility on different solutions so the industry can choose what is most suitable for their circumstances. As for embodied carbon, after many months of discussion and knowledge exchange with the Shanghai Environment and Energy Exchange, RESET has become the first standard to be officially recognized for carbon accounting and auditing purposes. The Shanghai Environment and Energy Exchange is responsible for carbon trading and the recognition allows real estate projects to use official CCER (China Certified Emission Reduction) credits to offset embodied carbon emissions.”
There is momentum behind improving wellness and sustainability in China, much of that though has been around compliance. Like most of the world, government regulations fall behind what is needed in the evolving working and living environment.
Waterson Lam, an award-winning interior designer and founder of the Beijing-based design firm in50 Design, shares his personal experience, “Entering China 17 years ago as a foreign designer, I noticed that very few building or workplace was LEED green building certified. Few building owners or companies are concerned with a healthy and sustainable workplace. It was hard to sell these ideas, but we saw this as being a great opportunity to introduce these concepts to workplaces in China. In 2010 we started our own design practice “in50 Design“ in Beijing to push original design as well as healthy and sustainable commercial interiors in China. Today Mainland China has become among the top countries in the world with LEED-certified buildings at more than 68 million gross sqm and 1,494 projects listed. Health and sustainability are no longer a trend but a necessity in today’s workplaces in the major cities in China.
There is momentum behind improving wellness and sustainability in China
In 2010 we started to design cabinets and table tops for recycling in areas such as the copy/print room and pantry areas and to set up effective recycling programs for people to recycle in the workplaces that we design in China. We brought on board 3rd party recycling companies to create a LEED-certified workplace when it was hard for the building owners to provide. But in the last few years, almost all workplaces and office buildings in China have had a very good recycling system.
I am a cycling enthusiast growing up in lots of parks and natural landscapes in Canada. On my daily commute to work in Beijing, I ride my bicycle to work. Talking with clients we encourage them to promote greener means of transport such as cycling, walking or taking public transit. At the beginning, very few buildings have bicycle parking or showering facilities but today there are plenty in office buildings. Bike share has now become a part of our daily life getting around town or going to work, this will help to reduce the carbon emissions in China.
Our design team also promotes the use of locally available materials from the region where the project is located and materials that are easily bio-degradable. As one of the top manufacturers globally China is producing products for the world to use, this means that pollutions are also more serious in China than in other countries. It is great to see in China that many companies are helping to bring about change for a better environment by taking initiatives such as making running shoes from waste plastic bottles and collection of waste aluminium coffee capsules.”
Reflecting on my two decades of experience in China, I’ve had the pleasure of collaborating with corporations, architects and designers, real estate firms, both Chinese and foreign-owned, and the Chinese government, to create an environment that is both healthy and sustainable. Many buildings were constructed with what was considered the best technology, materials and design at the time. I remember the IT manager who suffered from migraine because of poor lighting in the office, moved to a desk beside the window, but experienced so much glare on his computer screens that caused him blurry vision. The HR director suffered from back and wrist injuries because of poor workplace setup. The Salesperson tried to limit his time outdoor because of air pollution, but subsequently found out that the air quality in his office and home was even worse. We should remind ourselves that the buildings which we occupy are ultimately meant to be an environment that is healthy, productive and comfortable for us. By understanding the challenges and solutions in each society, including that in China, we can harness the collective wisdom to create an ever-improving healthy and sustainable built environment.
About JS Gan
JS Gan is Co-founder and Managing Director at Building Solutions Ltd, the leading green building technology specialist in Asia. He is a Hong Kong Green Building Council member, a BEAM Professional and a RESET Healthy Buildings Accredited Professional. Gan graduated with a Mechanical Engineering degree from Imperial College London and holds a Certificate in Sustainable Energy from MIT. He is based in Hong Kong.
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