61 Environmental, Social and Governance Report 2023 PILLAR 2: PROPERTY PORTFOLIO “We are proud to bring ESR’s leading expertise in investment, development and asset management for modern logistics facilities as well as the highest standards of sustainable development to Hong Kong. Together with our partner Chinachem Group, we are confident this new development will fulfil the growing demand for large-scale, cutting-edge logistics space while enabling Hong Kong to reinforce its position as a leading logistics hub to the world. In addition to the property’s state-of-the-art facilities, its strategic location also helps to unleash the full potential value of the Kwai Chung vicinity and sustain the long-term development of the area by promoting job opportunities and economic growth.” said Jeffrey Shen and Stuart Gibson, ESR Group Co-founders and Co-CEOs. In other parts of the Group, ESR Japan is set to develop the ESR Higashi Ogishima Distribution Centre Phase 2 in a prime land located in the Greater Tokyo metropolitan area. The land parcel, spanning approximately 6 hectares, offers a premium location just 10 km from Haneda Airport and in close proximity to the port, central Tokyo, Yokohama and Kawasaki city. Its convenient access to the Bayshore Route makes it an ideal hub for delivery routes across urban areas from Tokyo to greater Yokohama and inland Kanagawa. The planned Higashi Ogishima Distribution Centre 2 (HO DC 2) is expected to start construction in 2025 and will have a total area of around 306,000 sqm across 8 storeys, making it only slightly smaller than the inaugural HO DC 1. This development will provide excellent transportation and connectivity for e-commerce, third-party logistics, cold storage and other leading businesses in the region. BIODIVERSITY CONSIDERATIONS Biodiversity is our natural circular economy engine and critical in sustaining the health of our eco-system. As ESR prioritises developments close to major consumer markets with established transportation networks, the building construction and operation in urbanised areas typically have a lesser impact on biodiversity. Nevertheless, the Group recognises that the design, construction, operation and maintenance of our assets can impact biodiversity through our selection and use of land and materials and creation of natural environments in this sector. During site selection, the Group considers the environmental aspects of the site through an Environmental Impact Assessment (EIA) to assess the significant effects of the development project on the environment. In the design, construction and operations of our properties, we are committed to preserving biodiversity and maintaining high standards of environmental protection in native environments to ensure a balanced and intact ecosystem. For this purpose, we consult with third-party biodiversity experts such as universities or nature groups across our operations, where feasible. The Group also has an Environmental Protection Policy that sets out our commitment to preserve the biodiversity and habitat surrounding our assets and projects. We adopt a biodiversity mitigation hierarchy framework to manage the risks and potential impacts related to bioversity and habitat. This framework includes a structured approach to protect and conserve biodiversity and maintain the ecosystem through the following steps: Avoidance, Minimisation, Restoration, and Offsets. As an example of our pursuit to conserve biodiversity, ESR Australia partnered with the University of Melbourne to plant its first bed of “Woody Meadows” at 80 Taryn Drive in Epping. This is the first pilot site for this project, as there are three additional stabilised sites to be planted in 2024. Woody Meadows are naturalistic plantings of Australian shrubs that improve the appearance and function of low maintenance landscapes. Aside from improved aesthetics, the native plants require minimal irrigation, decreasing asset maintenance costs and lessening our environmental impact. The partnership will assess the viability of the Woody Meadows on Industrial Sites to test and demonstrate their success. Initial findings for 82 Taryn Drive will be available in approximately six months, as we plan to continually expand the environmental and commercial benefits of this type of landscaping assessment across our entire portfolio, where applicable, progressively. Strategic Locations
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