Authors | Chai Xuchen, Wang Lianqi

One is the globally renowned luxury goods giant, the other is the highly anticipated luxury goods mall operator, LVMH and Swireproperties, have come together in a very tacit understanding.
On November 6th, at the 7th China International Import Expo, LVMH Group and Swireproperties announced the establishment of a strategic partnership to promote sustainable development together.
As tenants and owners of malls and office buildings, the collaboration between the two parties can be described as a perfect match.

It is understood that this cooperation mainly covers the LVMH Group's brands, the upgrade and renovation of mainland China's six cities and Hong Kong's new and old stores, and office spaces. The total area of the existing stores and offices in China is approximately 0.05 million square meters.
According to the agreement, brands under the LVMH Group will participate in three exclusive sustainable development programs for Swireproperties' tenants: the 'Environmental Performance Commitment' for office tenants, the 'Green Retail Partnership' for retail tenants, and the 'Green Kitchen' plan tailored for dining merchants. The collaboration will cover various stages from decoration to operation throughout the entire leasing cycle, focusing on objectives such as energy conservation, emission reduction, water conservation, and waste reduction.

It is worth noting that LVMH Group will become the launch partner of Swireproperties' new 'Green Retail Partnership', focusing on enhancing the sustainable performance of retail stores. The two parties will also introduce the 'Sustainable Decoration Guidelines' framework to establish clear design standards for LVMH Group's new store openings.

From the perspective of the cooperation content, Swireproperties should be the more proactive and leading party. Swireproperties is a leader in the sustainable development of the real estate industry. In 2023, Swireproperties ranked second in the global Dow Jones Sustainability Index for real estate management and development, and in 2024, it held the top spot in the Hang Seng Corporate Sustainability Index for the seventh consecutive year.

The pursuit of companies must resonate with the times. In the era of new energy, ESG (environmental, social, and corporate governance) is a way for companies to engage in sustainable development, which has become an important consideration for companies in the capital markets. Currently, industry giants are increasingly regarding ESG reports as a company's 'second financial report' because it involves the gains and losses of companies in the capital markets.

In recent years, the U.S. and Hong Kong stock markets have incorporated ESG into their investment frameworks, and public funds are actively laying out ESG. Citic Sec points out that integrating ESG into private equity investments has become a general trend, deeply integrated with the entire process of 'fundraising, investment, management, and exit'.

In the fundraising stage, the ESG investment system can broaden funding channels; in the investment stage, ESG offers a new perspective for understanding corporate opportunities and risks; in the post-investment stage, enhancing the company's ESG governance level can help drive its high-quality development; in the exit stage, companies with good ESG performance are more in line with the requirements of listing supervision.
MSCI (Morgan Stanley Capital International) also indicates that ESG ratings provide a window for understanding financial performance and risk management of companies.

As giants in the luxury goods and real estate industries, LVMH and Swireproperties aim to further advance in financing, scale expansion, etc. Taking proactive responsibility in environmental, social, and governance aspects has become a required task.

Currently, LVMH Group has set targets, planning to halve its global business-related carbon emissions by energy consumption by 2026 (based on 2019). Swireproperties aims to reduce tenant-operated carbon intensity per square meter by 28% by 2030.

LVMH and Swireproperties are epitomes of industry giants pursuing sustainable development. Companies with such pursuits and investments will receive more positive feedback and rewards in the future.