Digitizing the built environment and asset management in China

Jiang Zhe is the president of NXPark, which develops turnkey, sustainable, digitalized commercial and industrial parks under the umbrella of Aden Group.

Aden Group has been developing in China for more than 25 years. In the earliest days, our business focused on traditional facility services including catering, security, and cleaning. Gradually we have developed into a diversified group that can undertake most of the non-core business services of industrial and commercial enterprises.

Since we began serving the Chinese market in 1997, we have accumulated many high-quality customers, including more than 300 Fortune 500 customers, as well as many outstanding Chinese state-owned enterprises and high-growth private enterprises.

Currently, we have more than 20,000 employees in China and teams in more than 80 cities. We also have a presence in Southeast Asia, Africa, Europe, and South America, covering 25 countries.

What is Integrated Facilities Management Service, or IFM? What does IFM cover?

FM, facility management, is traditional property management. This is more like some of our earliest single services, such as security, cleaning, facility maintenance, and greening projects. The IFM we are talking about today is more of a trend in Europe and North America. For the client, he can manage all his non-core business through a single point of contact.

The pandemic has highlighted this as a comparative advantage. During the outbreak, many of our clients were required to operate in a closed loop. In this case, clients needed to have a coordinator like Aden to provide all the non-core business services that they need during operation. The convenience of IFM allows customers to concentrate their resources, manpower, and investment in their core business.

Through overall management, we can improve traditional services and improve the lives of employees. Our new business and technology have expanded the scope of our IFM offer to include services such as energy efficiency management, asset digitalization, and ESG-related process optimizations. Those are the advantages that IFM can bring. Compared with the European and American markets, the overall proportion of IFM in the Chinese market is still relatively low, but we believe that this area will be a growing trend in the future.

digitalize building operations

The new incremental market for IFM

For us, the future IFM market in China is a big opportunity, because we can also see that ESG is becoming increasingly important for enterprises over the past two years.   The concept of ESG itself is based on investment logic. In the past two years, we have seen that there is a real demand in the financial market and the consumer market for enterprises to improve their ESG performance and many of those metrics overlap with China’s “dual carbon” goals.

In the past, the concept of ESG may not have been clear to everyone. Some people think installing a photovoltaic roof is considered low carbon or donating to charities at the end of the year is considered social responsibility. This approach may no longer be able to meet the real needs of investors and consumers. More and more people are inclined to transparent and measurable ESG standards. There are many opportunities here, such as how to make ESG standards transparent. Transparency requires digitization first. Real-time data should reflect corporate governance, carbon emissions, and social responsibility.

Another opportunity is to achieve the national “dual carbon” goals. “Dual carbon” is about energy production, energy efficiency management, energy storage, and the use of clean energy to help industrial production. On the other hand, it is about how a product measures its carbon footprint and reduces its carbon footprint throughout its life cycle.

Aden’s service case in carbon emission reduction

With the help of our digital tool Akila, Aden Group has been able to make some very concrete successes in carbon reduction for clients. I will give two examples.

One is our industrial park project in Xi’an – which is a greenfield construction project (i.e., there is no existing structure on site). We use our digital platform, from initial design to construction to final operation, to manage the full life cycle of all assets. At the beginning of the design, we take the carbon footprint of all the materials used (embodied carbon footprint) and do a rational calculation. This calculation is accurate down to the carbon emissions in the production process, and even down to the carbon emissions in the post-purchase transportation process, etc., to calculate the embodied carbon emissions of the entire life cycle of the building.


NXPark Campus Xi’an

Second, in the design process, we also fully considered the use of energy sources such as heat, cooling and electricity in the building and thought about how to optimize it. Then we used a combination of ground source heat pumps, photovoltaics, and other low-carbon solutions to be used to power the building and operations as much as possible. In addition, we use Akila to combine the energy production assets and the data output, including linkage with electric loads, energy storage, and consumption through the technology IoT with AI algorithms.

For example, if you only use a ground source heat pump technology, it is not intelligent by nature. Its working mechanism is simply off and on. When it reaches a peak between off and on, it will have a relatively high energy consumption. Is it possible to save energy with an intelligent algorithm before it reaches the peak or avoids hitting the highest peak each time?

Our strategy follows three steps: first is to calculate the carbon footprint of the entire building itself, second is to control the proportion of new energy used in its energy consumption links, and third, overall optimization, where we can achieve zero carbon in the building itself. The requirements for the entire carbon footprint are also far stricter than the requirements of our customers. This is through our efforts to drive the implementation of digital management tools on new projects.

Akila Asset platform

Akila Asset platform

The second example is the application of Akila on a brownfield, or already existing, project. This project was for a well-known furniture retail chain. The buildings are existing malls that are not intelligent or digitalized. We made these buildings smart by installing IoT sensors in various key areas and on key equipment to evaluate the entire energy consumption. After collecting and evaluating the data, we used AI optimization without any additional investment to reduce energy consumption by 25 to 30 percent, especially in the HVAC system.

The client wanted us to roll out the same solution in all Chinese stores and even wants to promote this application to some other business areas in the world. We are also very happy to see this kind of “China to the World” practice.

Innovation opportunities in cooperation with industrial and commercial customers

About 80 percent of Aden’s clients are industrial and commercial customers, mainly industrial. In addition, we have many international hospitals and international schools, including some enterprises and institutions. In the future, our task is to continue to innovate and tackle the pain points facing them today regarding sustainability and energy consumption. Many people believe that IFM and the property management industry are still very traditional, but we just don’t think so. I believe this industry is still driven by innovation, so the future of this industry will become more and more specialized and more professional. We can see that many professional industrial service giants have been born in Europe in the past two decades, and at the same time, market segment companies have been further differentiated on various racetracks.

From our point of view, we believe that the future of development, following the country’s “dual carbon” and high-quality development goals has a real need for what we have built at Aden group – driven by innovation and technology. There is ample opportunity in many domestic sectors, industrial or commercial. We believe that our solutions can benefit a broad spectrum of industries including shipbuilding, aviation, new energy, nuclear energy, and medicine. There are many advantages we have to offer, and they’re all driven by innovation.

Through innovation, we are helping customers prolong the life of assets and improve production efficiency. This is something that applies to every business that works in the built environment. In our industry, innovation cannot be completed by just one company behind closed doors. In many cases, we rely on partners to help us achieve common goals.

We very much welcome innovative companies that can enhance the value of the 2B companies in key areas such as environmental services, employee quality of life, carbon emissions, and digitalization to cooperate with us and grow together. The width and in-depth of the industry racetrack will be expanded as well. I believe the entire IFM and property management industry will be a trillion-level industry, so we must be full of imagination and cooperative spirit, and work with everyone to expand and deepen their respective areas of business.


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Sustainable development in the mining industry

Economic development depends on the mining industry to a large extent. Extensive exploitation of fossil fuels and strategic minerals like lithium and bauxite has enabled incredible growth across the value chain for everything from plastics to EV car batteries. While this leads to a better quality of life – especially for developing economies – the resulting damage to the environment is bad enough that it may do the opposite.

Soil erosion, water contamination, ecosystem disruptions and air pollution are all existential threats to human well-being caused by the mining industry. Solving these issues is one of the most fundamental problems facing sustainable development today.

Many nations have begun to adopt more comprehensive and rigorous standards around mining. In China, the world leader in mining metals and minerals, the 14th five-year plan has singled out green mining as a strategic goal. Internationally, markets are regulating themselves using ESG standards, calling on companies to follow various principles at the governance, social and environmental levels. Globally, consumers are also awakening to the fact that reducing human impact on the environment is one of the most important issues of our time. They are holding businesses more accountable for their actions through spending and investment choices.

But how can the mining industry balance economic development and environmental protection?

Smarter mines and mining operations

Meeting both the operational goals of the mining industry and the compliance standards set to be more sustainable can only be done with a thorough digital transformation. Networking, data processing and automation technology can optimize the groundwork and administration of mining sites to extract resources with minimized disruptions to the surrounding ecosystem.

Some of those solutions are as follows:

  • Mining automation systems: used to integrate real-time data collection with AI-driven processing power
  • 3D simulation & digital twins: the dynamic real-time display of mining work and personnel that can also run AI-backed simulations to help plan operations to be more efficient. This can also be used for camp management to optimize living spaces, equipment performance and energy use.
  • Cloud-network integration technology: Integrate the Internet of Things and cloud computing to realize intelligent identification, positioning, monitoring and management functions.

Creating a smart mine makes progress on both fronts: it optimizes operations and makes them more sustainable in the process. The key to improving the environmental impact of the mining industry is creating a solution that allows businesses to still perform at their best. However, there are still steps for mines to take at the operational level to improve their environmental impact.

Material and resource efficiency

Mines of course do not only extract lots of resources from the earth, but they also use lots of resources to operate in the first place. Keeping a mine operational requires large amounts of electricity and water, both of which result in waste in the form of emissions and wastewater. Rethinking energy and waste management can easily reduce the environmental impact of mines.

Solar panel installation at Essakane mine

Solar panel installation at IAMGOLD’s Essakane mine by Total-Eren, joint-founder of Tera Energies with Aden Group

Energy management at mines

The old way mines powered to their sites was by plugging into the grid and running equipment on diesel fuel. The burden on the grid was enormous and would produce emissions depending on the local energy mix (coal, petrol, natural gas). Diesel, used by equipment and vehicles, is also a major contributor to carbon emissions. Both of these factors can be addressed with decentralized energy infrastructure.

Mines that construct a local grid can opt for clean energy sources in the mix, rather than stay reliant on coal power. Solar panels are easily installed on roofs and can also be constructed on surrounding land to send clean energy to the mine. Depending on the size of the project, it may even be suitable to build wind turbines. Pairing these renewable energy resources with battery storage will allow the site to produce and store clean power for consistent use in its electricity mix.

For vehicles on site that are using diesel – opting for electric would be a better method to reduce environmental impact. Electric transportation and material handling vehicles are widely available at this point and can replace a large chunk of fleets at mines. Furthermore, for mines with a clean energy mix, EV charging can be directly hooked up to the microgrid which means they are running on renewables.

Water management at mines

Mines that pump in fresh water with no plan on how to manage it wind up creating thousands of gallons of wastewater a day. Often, this is then pumped out to evaporation ponds surrounding the site. The ecological impact of this practice is obvious, as freshwater is now one of the most precious resources on the planet. But wastewater can also leave behind harmful chemicals that seem into the groundwater, leaving lasting negative impacts on the people and animals in the area.

Moving towards a better water management practice, such as recycling water can reduce the amount of water needed in the first place and eliminate the need for so many evaporations ponds.

Mining is still one of the most important industries worldwide to keep economies moving. They create value at every level of operations and across the supply chain, providing the resources to drive economic development. Ultimately these resources are meant to improve the quality of life for people around the world, but the challenge is to ensure that the trade-off does not create even more problems in terms of environmental damage. Green and sustainable mining is achievable using technology and the commitment of industry leaders to adopt practices that minimize pollution and emissions.


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Five ways to reduce the carbon footprint of buildings and facilities

A carbon footprint is the total amount of carbon released into the air by an individual, organization, or community. It considers all activities and processes, such as transportation, operation and consumption of goods. It is no surprise that buildings (industrial, commercial, and residential) account for 40% of global emissions today.

As more and more focus from governments, institutions and the public goes towards reducing global carbon emissions, buildings can no longer remain such big polluters. Now this is not necessarily a choice, with governments enforcing low-carbon initiatives through policy and investors encouraging corporate boards to reduce carbon through ESG-based investment. Even employees and occupants of buildings are playing a role, demanding that their workplace be more environmentally friendly.

The carbon footprint of a building stretches back to the design phase and continues through construction and operation. At every stage, there are decisions that stakeholders can make that set the building on a path towards a lower overall carbon footprint.

Here are five key strategies to reduce carbon footprints in the built environment:

Start low-carbon planning early

For new buildings, the best opportunity to reduce their carbon footprints is to begin by evaluating and measuring the carbon impact of the building design. At this stage, building designers, architects and engineers can plan for optimal floorplans, layouts, materials, sourcing, and timelines that will contribute to reduced carbon footprints at the construction and operational stages of a building. As the design progresses and planning for building systems and utilities gets added into the blueprint, there are even more opportunities to design for smaller carbon footprints.

Building stakeholders need a complete life-cycle assessment of a building, accounting for all the flows in and out of the building system — including energy, water, materials, waste, etc.—to calculate its environmental impact. Such inventory data can specify and quantify the environmental impact of each sector of the building’s operation.

Many different rating systems provide standards for green building design. There are international standards such as LEED and country-specific standards like China’s 3-star System and Singapore’s BCA Green Mark Award. One of the best ways for new projects to start on the right low-carbon footing is to follow guidelines set out by these standards. However, existing structures still have many options to get on top of their emissions.

Low carbon building exterior

Properly maintain carbon-heavy equipment

One of the most effective ways to reduce a building’s carbon footprint is to ensure that all equipment and structures are adequately maintained. Building utility optimization (HVAC, electric, etc.) is essential for reducing the energy input needed to keep your building operational and comfortable.

Regular inspection and maintenance of HVAC systems, air-compressors, and electrical room equipment work to reduce carbon footprints in several ways. First, it can ensure these systems are running efficiently – meaning no leaks or flaws are causing the system to work harder (using more energy) to reach baseline performance. Second, it will reduce the need for replacements, reduce spending, and avoid creating more carbon costs inherent in the production of new materials, transportation, and installation.

A building with a proper maintenance plan reduces the amount of grid power it needs and directly reduces its contributions to carbon emissions while keeping equipment running longer reduces secondary carbon impact.

Low-carbon workplace management

A low-carbon facilities management plan should involve ways to cut emissions from both hard services and soft services. Buildings and workplaces can reduce carbon footprints not only through better equipment and system controls but also by creating a more sustainable workplace through administrative, technology and office amenities management.

Go paperless

According to statistics, 50% of commercial waste is paper. Many businesses have adopted a paperless office policy, which has greatly reduced overall generated waste. For example, replacing one paper letter with an email can reduce carbon dioxide emissions by 52.6 grams. Paperless offices reduce carbon impact by scaling down the demand for paper production, but also by reducing the transportation needed to move the waste to a landfill or recycling plant.

paperless workplace

Maintain and recycle office electronics

Electronic products are essential to office operations, but they are constantly in a state of iteration and upgrading. Both personal and office consumers tend to regularly replace and upgrade outdated electronic devices such as mobile phones, computers, and tablet computers, but this is also stressful for the environment. Most of the e-waste generated around the world comes from small electronic devices, most of which are sent to some developing countries for disposal (i.e., shredding, incineration and dismantling), producing emissions that are harmful to humans and the environment.

With the idea of reducing carbon footprint in mind, office managers should first determine if they need to replace their equipment, or if what they have now will work for a while. If replacement is necessary, electronic waste needs to be recycled appropriately. By recycling 20 pounds of electronics, your building can save 52 pounds of contributed carbon dioxide emissions.

Opt for sustainable catering and food service

Many offices, industrial facilities and remote sites provide food services for employees, guests, and occupants. The choices that they make regarding the type of food they serve and how they source it can have a significant impact on their carbon footprint. To offset this, the managers of canteens, cafes, or pantries at a workplace can scale back the amount of meat on their menus and try to source as locally as possible.

The public is increasingly aware of the impact of industrial meat production on the environment. Factory farming for livestock accounts for 80% of the earth’s agricultural land and 27% of clean water sources, while only accounting for 20% of the world’s supply of calories. Beef farming and production consume 50 times more water than plants, while global livestock produces about as many greenhouse gases as all the cars, trucks, planes and ships on earth combined. Replacing some protein on menus with plant-based protein can therefore reduce the carbon footprint of your facility.

The supply chain for food likewise can take a toll on overall carbon impact. Even beyond the fuels used for transportation, there are factors such as refrigeration and climate-controlled greenhouses necessary for out-of-season produce. Eating locally and seasonally can reduce the carbon footprint of your food by around 10% and is well worth planning menus to do so.

Waste management

Proper waste management can bring value from the three dimensions of sustainable development: environmental, economic and social. In terms of the environment, waste management can reduce environmental impacts on groundwater and air and reduce the threat to ecology and communities. Identifying byproducts or waste with some resell value can also be a source of income. A more holistic approach to managing waste, however, also reduces carbon emissions.

Having a robust recycling and reuse program cuts down on the need to produce more materials, and therefore the emissions inherent in that process. It also reduces the size of landfills – one of the largest sources of methane (another greenhouse gas) released into the atmosphere. Adopting a disposal strategy that cuts down on the need for pick-ups and transportation distance will also cut the emissions caused by (usually) diesel-burning vehicles.

Reducing waste is extremely important because how it pollutes air, water and soil damages local ecology and can hurt communities that depend on the environment near production sites or landfills. However, it is equally important as a way to reduce a facility’s contribution to carbon emissions as well.

digitalize building operations


Digitalization is one of the most effective ways to reduce carbon footprints because it creates the transparency necessary for optimizing carbon-saving operations. From building design to maintenance to waste management, the centralization of a building’s data and processes in a single source of truth enables businesses to reduce carbon footprints more effectively than ever before.

With a mix of hardware (sensors) and software (AI, data processing), a smart building is not only capable of streamlining day-to-day operations but can automate many processes as well. For example, data-driven maintenance can automatically remind relevant responsible persons to conduct timely inspections and assign tasks appropriately, while digital systems can track and collect data and generate reports on maintenance activities and costs.

Most importantly, a smart building gives every party from upper management to building managers and technicians the power to operate their facility in a low-carbon way.


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How IFM is key to better ESG compliance

IFM, integrated facility management, is a one-stop solution that brings together asset and equipment maintenance, workplace experience services, supply chain management and more. Because IFM operates in the built environment, from factories to office towers, it influences the overall business operation, which then impacts the economy and environment. It has a direct, effective and visible impact on a company’s ESG performance.

ESG is an investment concept and global standard that focuses on how businesses operate regarding the environment, society and their internal governance. Based on ESG evaluations, investors can assess the overall contribution of a given company towards sustainable development and responsible social practices. Companies with a higher rating carry less investment risk, as they are more likely to remain compliant with environmental regulations and employment policies.

ESG was born out of necessity; it is proactive, forward-looking risk management established upon the planning for real and emerging issues. As IFM spans nearly every industry and business sector and involves operations that touch on a variety of ESG factors, done well – IFM can be an engine to boost ESG performance.


The “environment” in ESG generally covers corporate practices relating to climate impact, environmental protection, waste prevention and control, green technology, renewable energy and more. In the built environment, it involves carbon emissions and pollution. Co2 emissions produced by the built environment account for approximately 40 percent of total global emissions, 90 percent of which is generated during the actual operation of the facilities (as opposed to construction).

For any company of scale, a corresponding carbon reduction strategy is indispensable, so in what ways can IFM add value to these strategies?

Energy and environmental management dashboard

ESG management dashboard in Akila

HVAC optimization

At present, the technology and market development trend of HVAC mainly focuses on energy saving and low consumption, as well as the application of new equipment and technologies such as solar energy, air and water source heat pumps, and energy storage. Digitization is driving HVAC optimization. Innovative technology like IoT and AI is upgrading traditional systems to achieve higher heating and cooling efficiency with lighter environmental impacts.

Smart energy management

In building operation and maintenance, monitoring energy consumption is essential. Building managers need to look at overall energy used as well as consider variables like price fluctuations and weather to plan and predict how to conduct operations in a way that optimizes use and conservation. Meeting energy efficiency targets is core to better ESG performance, but proper management of the energy-using assets themselves is necessary to maintain operational efficiency. A holistic approach to smart energy management needs to integrate a preventive and predictive maintenance plan to avoid unnecessary energy waste in the daily building operation.

Digitalized maintenance management

Sustainable supply chain

A key aspect of ESG ratings is ensuring compliance throughout the supply chain, which requires proactive supplier and vendor management. There are four key features of sustainable supply chains – low carbon, low waste, social responsibility and transparency, which can reduce costs and risks while creating value. Regular evaluation of your supplier’s impact on the environment is needed to maintain higher ESG ratings. 

Digitalized waste management

Waste treatment and management have a complicated governance structure, but digitalization offers improved transparency. Through the application of digital software systems, the integrated collection, reporting and sharing of data offers full life cycle supervision of waste. With deeper analysis, businesses can make more educated and comprehensive action plans to address waste production and treatment. IoT, AI, blockchain and other advanced technologies are being used to digitalize waste management, reducing the complexity, difficulty and danger of improper waste practices, and optimizing governance capabilities.

Localized catering services

Companies that provide on-site food service have to consider a multitude of environmental factors that come from food; ESG metrics will encompass the energy used and waste produced from food service. It will also involve sustainable sourcing – what is the environmental impact of your suppliers and the transportation used to deliver it to your site. 

Cooperating with local suppliers to achieve centralized food purchases can reduce related emissions and pollution and help companies reduce their carbon footprint. Closer proximity to a supplier also offers more transparency into their operations, with site visits as a possibility. Paired with digitalized waste management, on-site catering done the right way can boost ESG compliance. 


The social requirements of ESG standards measures how a company contributes to society, and IFM is naturally inseparable from it. Office occupancy and overall employee satisfaction are two of the key areas measured by ESG standards, and good facility management is integral to performing well on those fronts. A better workplace experience provided by IFM will directly improve scores along with ESG social metrics, and at a secondary level, help contribute to employee retention.

Some of the ways that IFM contributes to a better workplace experience are:

  • Improving the energy efficiency of buildings and facilities can create more comfortable workplaces;
  • Proactive air quality monitoring and excellent indoor air quality contribute to employee health;
  • Adopting an eco-friendly, local, innovative catering service strategy.

It’s not just the policies of the business that affect ESG social scores. Because an IFM provider is part of the supply chain, the IFM company itself must adhere to proper ESG-compliant employment practices, such as fair hiring and pay.

Investing in good IFM is one of the best methods to improve ESG social ratings. Building a better work environment with an ESG-conscious IFM provider can significantly increase employee wellbeing and ensure a more positive social impact.

IFM operations managers building a better work environment


Corporate governance in facilities management comes down to transparency, trust and ethics. Businesses and IFM providers must work closely to set a structured, sustainable commercial building operation model. A tech-driven IFM solution improves efficiency, optimizes resource utilization and saves time. It also helps companies better comply with ESG guidelines.

Digital transformation places data at the core of corporate business governance and workplace data management is crucial. Today, workplace and facility data systems make corporate governance an actual reality, and the rationalization of facility management processes is supporting the other two pillars of ESG. IFM that strives to be fully digitalized is an IFM that places compliance and transparency at the center of its foundation.


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Renewable energy is driving China’s “dual carbon” goals

Achieving a low-carbon energy infrastructure is a top priority for many countries to combat climate change or reduce pollutants that harm air quality and local ecology. Growing demand for low-carbon development will drive up the construction rate of renewable energy resources and lead to more comprehensive carbon emissions policies. In China, where energy demand is still growing, the primary balancing act is how to transform energy infrastructure to have a smaller carbon footprint without suppressing energy demand.

The key has been to act quickly to build renewable energy capacity and make policy decisions that encourage the development of decentralized renewable energy infrastructure. Although this is a challenge, it is also an opportunity in the Chinese market. Developing renewables helps to decarbonize the grid and brings new employment opportunities and a refreshed momentum for economic development and social transformation.

For China to achieve its “dual carbon” goals of peak emissions by 2030 and carbon neutrality by 2060, the renewable energy industry, driven by developments in wind and solar power, boasts huge potential to achieve these goals while also boosting the economy and ecological recovery.

Wind farm installation

Wind & solar power

China’s push for decarbonization will involve a broader approach that includes the build-out of nuclear energy, hydroelectric, and ultra-high voltage transmission lines. However, the bedrock of its energy transformation is wind and solar power. Wind and solar power installations can be built quicker and decentralized. Decentralized renewable energy is when businesses (or individuals) install renewable power generation directly on their property, which can in turn power their buildings. If those assets produce enough power, they can even sell the excess energy back to the grid. Both centralized and decentralized renewable energy play a role in pushing towards a low-carbon future.

Wind Power

China’s onshore wind energy resources are unevenly distributed. Currently, wind farms are mainly located in Northern China, in areas that are sparsely populated and do not have significant local demand. But in economically developed regions, such as the eastern and southern regions, which account for more than 70% of electricity demand, wind energy resources are scarce.

Furthermore, the geographic requirements for wind turbines to be most effective makes it difficult to achieve wide decentralization.

Solar power

Every year, the cost of producing solar panels decreases. Today, the price of solar panels is even more competitive with coal and natural gas. At the same time, the development of new technologies and materials is constantly improving the efficiency of photovoltaic conversion. Furthermore, China’s photovoltaic industry has a full capacity up and down the entire industrial chain from upstream high-purity crystalline silicon and midstream high-efficiency solar cell production to the construction and operation of photovoltaic power plants. The Chinese solar panel market already has a well-developed value chain as well, including key intellectual property rights.

Solar energy is also a much more flexible source of green power, with application scenarios including large, centralized power stations, commercial or industrial rooftops, or off-grid power for people in remote areas. Providing reliable solar electricity does face a few challenges – namely instability due to weather and cloud cover. However, there are already a variety of solutions in existence or development, such as energy storage, solar thermal power plants, and intelligent photovoltaic generators.

Bolstering public works with policy

While the industrial capability to build out renewable infrastructure is a major part of reaching a low-carbon grid, it is not the only tool in the arsenal. Pushing businesses to take responsibility for their contributions to emissions is also a core part of the decarbonization strategy.

Last year, the National Energy Administration announced a list of pilot zones for county-wide solar panel roof installations, involving 676 counties and cities. In 2021, China’s new PV installation reached 53GW of capacity, generating 29GW, accounting for about 55% of new energy generation in the country, which for the first time accounted for more than half of the new generation.

On April 1 this year, China rolled out its first mandatory code for carbon emissions in buildings, the General Code for Energy Efficiency and Renewable Energy Use in Buildings, which sets higher requirements for the use of renewable energy, and new building complexes and buildings must also contain planned usage of renewable energy. The code requires new buildings to install solar energy systems and establishes detailed requirements, including the minimum lifespan for solar thermal collection systems (15 years), and photovoltaic modules in solar photovoltaic power systems (25 years).

Solar panels up close

Solar energy & ecological restoration

In the context of economic development, Chinese officials often evoke a deep concern for nature as well: “lucid waters and lush mountains are invaluable assets.” This means that the overarching approach to promoting energy transformation and improving energy structure is not only to stimulate rapid economic and social development but also undertaken to protect the environment and hurry the repair of the ecology that has been damaged.

In recent years, China has taken an initiative to revitalize the environment around abandoned mines, attempting to restore the immediate areas around the old mine through ecological restoration, land reclamation, landscape preservation and reconstruction, reuse of abandoned mines, and construction of national mine parks. These sites are also being used to construct solar power installations – turning a once desolate area into a generator of clean energy.

The construction of solar power plants on some abandoned mines makes full use of the deserted mine sites. Many of the largest mining areas suffer from soil erosion and desertification, as well as damage to vegetation. Photovoltaic power plants, when installed in these areas, can promote soil restoration, prevent further soil erosion, and restore local ecological damage to improve ecosystem functions.

Meanwhile, photovoltaic projects can also be integrated with agriculture, fisheries, tourism, and other sectors to achieve cross-industry development. In Datian, Fujian Province, there is a “terraced field” created by solar panels installed on a former agricultural site. In Houshe coalmine in Shangjiang, a similar project was undertaken to reuse abandoned fields, warehouses, courts, coal platforms, sheds and other lands.

Transforming areas in a state of disuse into a new generator of renewable energy revives abandoned work sites without needing to develop a separate, untouched plot of land.

Decarbonization is not a choice

China has committed repeatedly to its “dual carbon” goals of peak carbon and carbon neutrality and encouraged the use of renewable energy as the method to achieve them. For many reasons, wind and solar are the foundation of this infrastructure due to improving cost, efficiency, and flexibility in installation. Over the past year, we’ve seen a continuous rollout of policies pushing both public and private actors to reduce carbon emissions with solar panels – and those are unlikely to slow down. Aligning with the national interest of decarbonization and ecological restoration is now less of a choice, and closer to being law of the land.


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Waste and water management is in the spotlight for Asia

Waste and water management is a growing concern for businesses, manufacturers and building managers around the world. More companies are looking for trusted partners to ensure their operations are 100% compliant with local waste and wastewater management policies and regulations.

Governments, too, have aligned on the need for safe water sources—among the United Nations’ 17 Sustainable Development Goals is providing clean, sustainable sources of water for everyone on the planet. Additionally, across the business landscape, there is growing demand from investors and other stakeholders to reach more transparent and documented environmental and sustainability goals.

Waste and water management is a cross-sectoral need. ESG and government regulations aren’t just targeting manufacturers. Every built environment from retail to healthcare and education is faced with the new challenge of upgrading how they manage environmental impact.

New regulations governing waste and water management in Asia

In Asia, governments are taking a more proactive role in environmental regulations for businesses. For example, earlier this year China’s Ministry of Ecology and Environment issued its “14th Five-Year Plan for Ecological Protection and Supervision,” marking the first governmental regulatory plan for ecological protection in the country. The plan mandates improved management of pollutants as an important part of promoting environmental quality and low-carbon development to maintain both health and safety. The new regulations also improve measures for the coordinated disposal of urban waste, domestic waste, food waste, medical waste, hazardous waste, garden waste, sewage and other types of waste.

Elsewhere in Asia, such as in Vietnam, there are ongoing projects to strengthen regulations on environmental impact, pushing for a system of assessment, inspection, permitting and enforcement. There will doubtless be increased pressure to stay compliant with environmental laws to improve water quality and waste management, as well as to be more transparent to the public.

Expectations for businesses

The scope of waste and water management has expanded beyond just the need to control hazardous materials. As more information about the environmental impact of buildings across the entire lifecycle (design, construction, and operation) becomes clear, regulations are only becoming more comprehensive.

Here are just some of the areas that businesses can expect to be regulated:

  • Risk assessment,
  • Groundwater impact
  • Landfill contribution
  • Recycling and composting
  • Hazardous waste
  • Reporting and transparency

Even for businesses that have set up a basic infrastructure for the general management of waste and water, staying compliant and up to date can be a challenge. For those that don’t have any infrastructure in place to deal with these needs, in-house management may prove to be a major financial burden.

Digital transformation of waste management

The extent and complexity of managing waste and water can make proper oversight difficult– either leading to increased costs or, when done improperly, leading to fines. Recently though, digitalization is injecting new vitality into the ability to manage waste transparently and with added value.

Implementing digital software systems to collect, report, and share data, makes full-lifecycle supervision of waste achievable. This new availability of data and analysis is instrumental for decision-makers and meeting ESG goals. Advanced technologies such as digital twins, IoT, AR and blockchain can help digitalize the full lifecycle governance of waste and wastewater. These emerging technologies reduce the complexity, difficulty and danger of environmental management, simultaneously optimizing governance capabilities.

In addition to regulation, digitalizing waste management works like a “matchmaker,” matching waste generation with appropriate treatment. Using big data on the production of waste and lowering information barriers can improve the efficiency of waste treatment and utilization. The availability of comprehensive data on waste and water enables businesses to connect with market players, contributing to the formation of a more comprehensive waste management system. In this sector, three trends dominate: sustainability, digitalization, and waste and they offer substantial advantages for compliance, efficiency, and the environment.

Outsourcing transparently

Waste and water management is critical to building sustainable and livable cities, and the weight of this responsibility is borne on the shoulders of businesses. On top of the fact that effective waste management is not only costly and challenging, it also requires a combination of support and services.

With the right partner, however, much of this pressure can be dealt with in a way that adds a net gain for businesses. For example, Aden has partnered with waste and water management experts to include them in a more comprehensive facility management offer. Together we designed a digitalized solution that provides total transparency for clients to monitor and track waste. This streamlines regulatory and reporting burdens while also offering more valuable data for decision-makers to adjust operations to have a lighter environmental impact and improve their ESG scores.


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Localism and sustainability are key in Indonesia’s growing economy

Indonesia is the largest economy in ASEAN by nominal GDP and continues to push forward aggressively in commercial, industrial, and mining sectors. With a recent carbon tax policy, Indonesia has signaled that this growth need not be at the expense of the environment.

The push towards sustainability and ESG is happening all over Asia, Indonesia included. Domestic and multinational organizations that fuel the Indonesian economy still strive to be greener and more responsible for investors and employees. Businesses operating in Indonesia – especially in the built environment – should pay close attention to the developments concerning carbon emissions, ESG and digitalization.

A strong signal for low carbon development

One of Indonesia’s biggest sustainability signals is a recent set of regulations calling for carbon pricing mechanisms. This new regulation makes it the second country in Southeast Asia to establish a carbon valuation scheme. Indonesia has tried to balance the growing trend of improved environmental regulation to meet COP21 goals with its desire and need to attract FDI and foreign technology. Increasingly, to qualify in the eyes of some investors, companies must be able to meet investor ESG criteria—and while this new policy is a positive development, history has shown that there are challenges turning regulation into action. This is even more reason businesses must lead the way in low carbon development.

To fully realize Indonesia’s potential, partnerships are key

Indonesia isn’t waiting to embrace the digital and green revolutions. The country has even stated its intent to relocate and build a brand new capital city to be a haven for sustainability and foreign investment. Commodities and raw goods, which account for a large part of the Indonesian economy, have, up until recently, been offshored for manufacturing purposes, but that is shifting as well. Indonesia is taking its resource-richness and access to strategic metals and minerals like nickel and lithium to build itself into an EV battery powerhouse. As the country broadly progresses from commodity extraction to manufacturing and technology, the old way of doing business won’t be viable for much longer.

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There are huge amounts of opportunities for newer, upmarket businesses in Indonesia, but without the right partnerships, several challenges remain. The nation’s dynamism, diversity, and scale—more than 17,000 islands in its large archipelago—means deploying in this dynamic and diverse environment requires strong local cultural knowledge as well as an established supply chain network. Being able to understand the environment, stay up to date with regional policies, work with local communities by hiring locally, and meet changing demands from both consumers and labor means clients have effective, uninterrupted, locally compliant service.

Facility management: the frontline of sustainability

Facilities management provides businesses an everyday opportunity to make progress in sustainability: it’s where the battle is fought and won. But, until recently, businesses in Indonesia have taken a traditional view of FM—single soft services or hard services often with multiple suppliers. A more modern FM approach recognizes that a broader, more holistic approach is needed to create more sustainable facilities.

Waste and water management, for example, is a major problem in Indonesia, where open dumpsites predominate the waste management system and have led to pollution and environmental degradation. Likewise, utility assets like electricity, HVAC and compressed air are run inefficiently – leading to increased carbon emissions. Meeting increased pressures to stay sustainable and low carbon from the government, investors and clients means that managing facilities must address environmental and carbon impacts. The best way to do so is to have a single integrated supplier who can provide a holistic approach to more sustainable and responsible corporate practices.

Furthermore, digitalization is a key element of ensuring transparency. Any modern approach to facility management will be smart, digitalized and managed by experts who use tech like digital twins to make data-driven decisions about how buildings can operate more efficiently. Integrating modern FM and data offers businesses powerful new insights into performance and sustainability, alongside verifiable ESG benefits.

Indonesia’s next generation

Indonesia is still a young country—and the new generation won’t settle for business as usual. The economy is moving up the value chain with tech deals booming and the EV battery sector on track to expand rapidly. As the economy strengthens and more skilled labor starts to enter the workforce, there will be a real demand from the employee base to work for companies that are more environmentally conscious. They will also expect higher standards of workplace experience, and businesses that can offer those will have a distinct advantage for attracting better talent.

Embracing the challenges of a changing Indonesian economy

Looking at the current trends in Indonesia and the greater ASEAN business world, we can see that to be successful requires more than great staff and powerful tools—it requires a mindset that takes every challenge seriously. Greenwashing business practices no longer work in the ESG age. Knowledge and experience in the local business culture are a must for international companies as technology improves how a generation of more skilled workers communicate. Sustainability efforts like carbon reduction, community-forward policies like hiring locally, and a deep understanding of creating lasting supply chain infrastructure are all instrumental to the success of businesses in a changing Indonesia.

China’s new green building regulations are here: what you need to know


  • New regulations on low-carbon buildings set to take effect in April 2022
  • New and existing projects will be required to submit full energy audits
  • New buildings are required to utilize solar and improve renewable energy mix
  • Continual improvement targets are expected
  • Ambitious Residential and industrial targets for energy savings are set

In 2020, China made the pledge to reach carbon neutrality by 2060, as well as peak carbon emissions by 2030. These promises were reaffirmed with the 14th Five-Year Plan release in 2021. Since then, there have been several policies that have come into effect, starting with a national carbon trading scheme.

Last October, the Ministry of Housing and Urban-Rural Development issued a new regulation, the General Code for Building Energy Conservation and Renewable Energy Utilization, which goes into effect on April 1, 2022. This is the first mandatory regulation for carbon emissions from buildings and construction, and its scope is wide—including existing buildings, new buildings, construction commissioning and approval, renewable energy systems, as well as buildings operations.

Why now?

The construction industry in China accounts for more than half of the total carbon emissions nationwide. In order to meet the country’s ambitious carbon reduction targets, this policy is one in a line of many that will come into effect over the coming years. The new General Code will require stringent energy savings in residential, industrial, and in new building construction.

Shoring up and improving existing standards

This regulation is intended to solve multiple issues in the existing green regulatory framework, introducing mandatory policies around green buildings, including for the first time a clear mandatory standard for carbon emission intensity, which solves the problem of no clear quantitative index requirements for building carbon emissions in the past.

Residential area buildings will be required to have average energy savings of 75% in cold and extremely cold areas, and other climate zones will be expected to have an average energy savings of 65%. These numbers are pegged to energy consumption levels in 1980-1981.

Industrial targets will be increased by 20% as well.

Energy audits to set a baseline for emissions reduction

First and foremost it means a new layer of planning and forecasting energy consumption in line with international standards. In order to meet reduction goals and hit the national “3060” goal of peak carbon by 2030 and carbon neutrality by 2060, a baseline must be established in order for reductions to be made verifiably.

In addition to a full energy audit, renewable energy usage and carbon emissions reports will have to be submitted as well. Lifecycle emissions will have to be calculated based on projected energy use and energy type for both new and existing buildings. At every level of the building’s lifecycle, from surveying and design to live management to demolition, energy usage reports will have to be calculated and submitted. These will have to be approved according to the specifications within the law.

Energy calculations for new buildings will have to be calculated across 3 distinct levels:

Direct emissions

This will include the direct hydrocarbon fuel usage of the building’s operation. Cooking, steam, and any other direct usage of hydrocarbon fuel in regular operations are all included.

Indirect emissions

This includes consumption of grid electricity for heating and general operation. This is the primary source of emissions for a building during operations. Direct and indirect emissions combined represent the total emissions of a building’s operations.

Embodied emissions

These are the emissions involved in the design, construction and materials of the building—estimated to represent about 20% of a building’s lifetime emissions cost. New construction is encouraged to use low carbon construction methods and materials where possible in order to continually produce more energy savings.

Improving the energy mix

In addition to focusing on the reduction of energy use through design, construction, and operation, businesses and building owners will need to improve efforts to source power through clean energy sources.

Currently most energy in operations is generated using fossil fuels, such as coal or natural gas. On average, the proportion of renewable energy used is only about 6%. Audits will require the determination of carbon emissions based on the carbon emission factor of different energy types including coal, natural gas, etc. in order to encourage use of renewables.

New buildings will also be required to implement solar energy via photovoltaic panels and submit the total energy generation. This drive towards renewable energy will be met in design goals including an increase in the use of natural lighting, insulation, air thermal energy, biomass fuel sources, and geothermal power where appropriate.

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Reductions in emissions through retrofits and smarter management

The scope of this policy applies to more than just new buildings and standing ones. It’s regulations will also extend to retrofits, renovations, and feasibility studies. Each of these processes will need to at the least match baselines, but reducing carbon will be heavily encouraged. Any increase from current levels of emissions will be forbidden.

There are many ways to reduce a building’s overall emissions profile in operations. Reducing direct electricity or fuel consumption, retrofitting utility assets like HVAC and compressed air to improve energy efficiency, using building or operational materials that are recycled or recyclable.

For buildings where retrofits prove to be too difficult or costly to implement, building standards for any future renovations will have to meet their current energy savings standards.

Building managers will have to think proactively and deeply about meeting emissions reductions targets and make changes wherever possible. To make serious carbon reductions will require partnership with energy and environmental management firms and technical asset management vendors. Building management will need to become smarter and more digitalized using software like digital twin building platforms. Daily facility operations can also benefit by sourcing facility management providers who are experienced in reducing carbon impact through sustainability best practices.

Stronger standards, greener buildings

Since the outlay of China’s 14th Five-Year Plan, it is clear that green buildings will be a major focus going forward. Policies will grow increasingly broad and granular, reaching across sectors and industries, and even into consumer goods and the promotion of new energy efficient standards for items such as lights, doors and windows.

In the past decade, there have been many successful green buildings seen in China, but there are also many projects embarked on with little regard for the new standards of green buildings—for various reasons such as shortcomings in the planning stage, lack of expertise, or lack of know-how during the construction process. Although compliance with green building standards and regulations represent a higher initial cost, over time the social benefits and total cost reductions in operations from green buildings will be worth it.


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ESG is changing how businesses approach sustainability

ESG or Environmental, Social and Corporate Governance is quickly becoming the global standard for investors seeking responsible investment opportunities. This framework requires companies to provide deep transparency and rigorous data, sparking a revolution in how corporate value is assessed. ESG will force companies to put digitalization and traceability at the center of their operations, requiring a reassessment of each layer of business—from facilities to executive decision-making.

ESG – a market revolution against an era of “greenwashing”

Sustainability. Corporate Responsibility. Impact. These terms have been part of the corporate vocabulary for years, dating back to the 1960s. In the modern era, the idea that corporations must be responsible citizens—tangibly giving back and remaining visibly accountable for negative externalities is now central to corporate strategy.

While sustainability and corporate responsibility are now seen as competitive advantages, “greenwashing” has unfortunately become a widespread problem. When faced with the hard and challenging work of overhauling legacy unsustainable practices, many companies have found it convenient to give the impression of commitment through big talk and misleading publicity.

Ironically, greenwashing is itself proving unsustainable. Consumers and investors are aware of greenwashing and pushing back against companies that only “talk the talk.” At the governmental level, standards are being written into law and strictly enforced. Today there are laws pushing back against greenwashing from the EU to Australia, and governments like China’s now require strict corporate data reporting on CO2 emissions, waste management, and other metrics.

But the biggest driver of change may be coming from the market and the world of responsible investment – the root of the ESG revolution fomenting worldwide. Investors are aligning behind ESG frameworks demanding tangible, clear-cut roadmaps for action and transparent reporting of corporate impact on a wide range of metrics.

Green sustainable environment

ESG is a guideline to reduce risk and protect profits

Sustainable investing will drastically reshape the market. According to Simfund, 2020 saw institutional investors invest $288 billion in sustainable assets globally. That is a 96% increase YoY.

Some investors once viewed sustainability targets as secondary to the overall financial health of a business. Yet recent data suggests that companies actively pursuing ESG outperform companies that don’t in terms of value – both overall and relative to their industries.

According to Ioannis Ioannou of London Business School “[The] scholarly body of evidence suggests a positive causal link between truly integrating social responsibility into the way that you do business and financial performance in both the short and long term.”

ESG-oriented approaches reveal risks and blind spots that other, more traditional strategies miss. For example, climate change impact is traditionally given a headline measure—the carbon footprint of a company. Today, standards bureaus like SASB look at the impacts of climate change holistically and assess how these risks apply directly to different industries. The SASB will assess a company based on its preparedness for damage to assets, disruptions to supply chains, increased regulation and many more direct risks of climate change.

The standards bureaus’ deep material analysis offers insight into the long-term value of a company by exposing risk in an actionable way. Lowering risk is crucial for the longevity and performance of a company.

What is ESG, exactly?

ESG is a standard for companies to use when seeking to demonstrate their commitment to sustainability and to generate interest from socially responsible investment funds. Compared to traditional methods of demonstrating responsible corporate citizenship like CSR, ESG is far more data-driven, with a strong focus on transparency and reporting according to well-defined guidelines.

Today, there are a number of different frameworks in use, established by different stock exchanges and institutions. The frameworks rate companies based on the organization’s actions on climate and environment, how pro-social and human-centric the company is, and how effective corporate strategy is. This can be assessed across 3 pillars using multiple variables.

Energy efficiencies, carbon footprints, greenhouse gas emissions, deforestation, biodiversity, climate change and pollution mitigation, waste management, water usage

Labor standards, wages and benefits, workplace and board diversity, racial justice, human rights, talent management, community relations, privacy and data protection, health and safety, supply-chain management, other human capital, social justice issues

Corporate board composition and structure, strategic sustainability oversight and compliance, executive compensation, political contributions and lobbying, bribery and corruption

ESG ratings agencies comparison

Starting on a corporate ESG strategy

While today’s ESG frameworks are both more comprehensive and tougher than past standards, they are also pragmatic systems – the people who designed them want as many companies as possible to become ESG compliant. Put simply—ESG frameworks are set up to encourage entry.

For this reason, companies in the early stages of their ESG strategy are not expected to be at an optimum level of sustainability in all categories. What matters is that they show a demonstrable commitment to transparency and that the company has established a roadmap to sustainability covering the three ESG pillars. Following this, the company’s progress, whether rapid or incremental, must be dutifully tracked and disclosed on a fixed schedule, supported by third-party validation.

The success of a company’s ESG strategy relies on foundations that are laid at the beginning, and what tools are in place to ensure subsequent consistency in data collection and reporting. Successful ESG implementation should start with close coordination between all relevant parties inside the company, establishing what data each department is able to provide towards target metrics and looking to identify and remove any double reporting or misaligned reporting.

The guiding concept must be to establish a single source of truth—it is the sine qua non of pursuing a viable ESG strategy. Creating and managing a single platform centralizing and aligning data is a cutting-edge field in corporate management, comprising not just tracking across all three pillars of ESG, but a holistic understanding of the company’s business.

Keeping at the bleeding edge of this complex data problem and providing a holistic understanding of the company for management requires the proper digital and social tools and systems to collect and report data. This task’s complexity is one of the main reasons that many companies now prefer to find a sustainability partner to oversee this process rather than trying to manage everything internally.

The race to adopt ESG standards

The past year saw a massive interest in ESG—there was a 363% increase in companies adopting SASB standards in 2020. Many firms pledged to integrate ESG goals as a core strategy going into 2021. Some firms that are heading enjoying the benefits:

Microsoft & BNB Paribas ESG goals

ESG is the modern business revolution

ESG shows no signs of slowing down. All signals suggest this is an enduring trend with huge growth potential in the future. A number of principal factors are driving this.

Funding flows to sustainable investment funds surpassed $1 trillion by the end of 2020. Deloitte has forecast that ESG-backed assets could grow by as much as three times the pace of non-ESG assets and comprise half of all professionally-managed assets in the US as soon as 2025.

In BlackRock’s 2021 letter to CEOs, it announced that all of its almost $7 trillion assets under management would be directed by ESG metrics. This led to the establishment of the Net Zero Asset Managers Initiative, a group of 30 of the world’s biggest asset managers pledging to achieve net-zero carbon emissions across their portfolios by 2050.

Policymakers are making ambitious changes globally. China has pledged to achieve carbon neutrality by 2060 – with forecasts suggesting it will clear this hurdle easily. The Korean stock exchange (KRX) has announced new rules that require companies over $1.8 billion in value to provide ESG disclosures by 2025 to remain listed. This requirement will apply to all companies by 2030 on a ‘comply or explain’ basis. This is also in line with the Hong Kong Stock Exchange’s plans.

ESG starts at work

To begin an ESG strategy, both the work and the workplace must be considered from a new perspective. Are your dining services sustainably sourced? How are you improving corporate dining satisfaction? How are you reducing your facility’s energy use, while minimizing waste? Are your workers satisfied with their workplace experience? How are you tracking these targets? These questions aren’t for management’s idle musing—each answer is actionable—a tactic to meet an ESG strategy.

Data-driven approaches are holistic approaches, deeper than simple headline targets like carbon neutrality. These can only truly be effective with a bottom-up approach, born from a constant virtuous cycle of observation, iteration, and improvement.

Today, with IoT and smart building technology, the workplace can be seen as a solvable problem. Positive changes made to the work environment will produce a positive cultural benefit—workers will believe what they see, and practice accordingly.

The upward spiral of observation, iteration, and improvement is built on the constant generation of and action on data, including energy use via energy management contracts, digital twin, sustainable corporate dining, worker housing, and data-driven management.

Corporate boardroom ESG meeting

ESG As a Future-Oriented Strategy

The task ahead for businesses adapting to ESG standards is daunting—but it is a profit and investment driver for any business aiming toward the future. Partnerships are the most common option for a business looking to avoid the extreme costs and learning curve of bootstrapping an ESG initiative.

Partnerships in facilities management and offer immediate cost reductions and contribute heavily to the development of a single source of truth—the unified data repository around which the best and most viable ESG strategies are built. Cutting-edge partners offer services like digital twin, IoT-based facility management, and gourmet corporate dining. Developing human capital and reducing costs are critical tactics in ESG strategy.

Meeting ESG standards will make the difference between success and failure in an environment racing to change how business is done best.


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What does China’s carbon trading market mean for your business?

On July 16, China’s national carbon emission trading market opened. More than 2,000 power sector enterprises—accounting for more than 40% of the country’s carbon emissions—entered the market as the first batch of trading entities. On the first day, the average transaction price was 51.23 RMB / ton, the turnover volume was 4.104 million tons and the business volume exceeded 210 million RMB.

So what is carbon trading? Why the need to establish a nationwide unified carbon-trading market? How will this market affect enterprises with carbon emission demands? Here is what you need to know.

What is carbon trading?

Carbon trading, also known as carbon emission allowance (CEA) trading is a market-based mechanism in which carbon dioxide emission allowances are traded as commodities. The carbon market does not actually buy and sell CO2. What it trades are quotas, or allowances, for energy enterprises, industrial plants or other buildings to emit a certain amount of CO2. If a site or building reaches its emissions cap, it must purchase more emissions allowances as a price per ton of CO2 (tCO2) from the carbon trading market. This is also known as a cap-and-trade system.

What is carbon cap and trade?

Before trading, the government will determine the required total amount of local emissions reduction and supply market entities such as enterprises with a quota of allowances based on that figure. If an enterprise emits more than its allowed quota, it has to buy allowances from the market. On the other hand, if a company’s actual carbon emissions total less than the quota, the remaining quota can be sold in the market. This way the enterprises which perform better in terms of greenhouse gas emissions generate a value.

Why the need to establish a nationwide unified carbon market?

China has already proposed the national initiative to reach peak carbon dioxide emissions before 2030 and achieve carbon neutrality before 2060. Both initiatives were reinforced at the Two Sessions earlier this year when the politburo announced the contents of the new five-year plan. Establishing and gradually improving the national carbon market is one of the core policy tools to achieve these goals.

China’s national carbon market breaks geographical and technology constraints and enables carbon abatement to be produced wherever it is more efficient and cheap, which is expected to significantly reduce the cost of reducing total emissions. The first batch of enterprises included in the national carbon market emits more than 4 billion tons of carbon dioxide, which means that China’s carbon trading market will become the largest carbon emissions trading market in the world.

Who can participate in carbon market trading?

At present, the market is in the initial stage, with 2,225 power generation enterprises taking the lead in trading. However, it is predicted that as the market improves and matures, more industries, industrial and commercial enterprises will enter into the emissions trading market.

The Ministry of Ecology and Environment of the People’s Republic of China has already carried out carbon emission data reporting and verification for enterprises in related industries. In addition to the power generation industry, the report also covers building materials, nonferrous metals, steel, petrochemical, chemical, papermaking, aviation, etc. In the future, with the expansion of the carbon market, enterprises’ demand for energy conservation and emission reduction will continue to increase, thus they will be more inclined to use clean energy and low-carbon energy.

Meanwhile, companies currently not involved in the carbon market can take steps to get their total emissions and carbon impact under control. There are a variety of energy management solutions that can relatively quickly shave off total greenhouse gas contributions such as HVAC optimization and compressed air leak management.

How can companies adapt to the new carbon market?

The best bet for companies who need a quick transition to low carbon operations is to find a strategic partner. A good energy partner can identify exactly where your operations have the highest carbon impact and help reduce it without affecting your bottom line. There are even options to do so with zero CAPEX needed. One of those methods is to collaborate with an ESCO or Energy Service Company that can take over energy management and retrofits, but there can be downsides especially when it comes to discrepancies over transparency. That’s one of the reasons Aden created Tera Energies, which uses Akila—an AI+IoT platform—to track those metrics for total transparency and use machine learning to optimize energy efficiency and reliability.

Moving towards a zero-carbon future

Total carbon emission controls benefit the whole society. However, some companies will face many challenges such as regulatory compliance, cost reduction and efficiency improvement. Nevertheless, businesses still need to keep up with the quick pace of change and respond positively. Finding a solid energy partner can help move your business in the right direction no matter which stages your business is at regarding energy efficiency management or sustainable development. With the opening of the carbon trading market and the national 2030 and 2060 initiatives, there is no better time to start than right now.


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