CTP purchases industrial land plots only on a willing buyer-willing seller principle. No involuntary resettlement or economic displacement was caused as a result of the previous land bank developments and the company does not get involved in projects requiring displacement. The company intends to follow this practice in future. CTP develops its properties on industrial lands only and selected sites are modified habitats, without key biodiversity values, where no indigenous peoples or cultural heritage are known to be present. In addition, the construction contractors are required to develop a chance find procedure for each new construction project in accordance with EU and national legislation requirements. As such, no impacts for this project are expected which must be managed in accordance with IFC PS 5 (Land Acquisition and Involuntary Resettlement), PS6 (Biodiversity Conservation and Sustainable Natural Resource Management), PS7 (Indigenous Peoples) and PS8 (Cultural Heritage).                                    

 The proposed investment is expected to have limited environmental and social impacts, which will be site-specific with none anticipated to be significant. Further, the impacts can be avoided or mitigated by adhering to recognized performance standards, procedures, guidelines and design criteria as described in the following sections. Thus, this is a Category B project in accordance with IFC’s Policy on Environmental and Social Sustainability.

Key E&S risks and impacts associated with the project include: effectiveness of E&S management systems and the company’s capacity to undertake its operations in a manner that is consistent with IFC Performance Standards; land acquisition for the development of land bank; adherence to core labour standards and the effective implementation of the environmental, occupational health and safety (OHS) management plans during construction and operation; life and fire safety design and management of its properties; and stakeholder engagement.                          

 Assessment of E&S Impacts and Risks

As per the company’s standard operating procedure (SOP), all new identified investment opportunities are subject to preliminary analysis and risk assessment. Land or property acquisitions undergo a detailed due diligence and are considered for acquisition by the senior management team. This due diligence process is conducted by qualified consultants and their scope of work among others includes, legal due diligence (historical ownership and property rights, litigations, confirmation from the authorities on land use status), screening of any environmental issues (environmental reports, past land use and soil and underground water contamination) and Phase II Environmental site assessment. Part of its due diligence process, CTP will screen projects to ensure that projects which might have significant environmental and social risks and impacts, such as land acquisition, biodiversity, legacy labor issues, legacy pollution issues etc., are not financed from the green bond proceeds.

Environmental impact assessment (EIA) studies and the relevant environmental management programs for the new developments that are conducted as part of the construction design are in compliance with the European Union (EU) EIA Directive and national requirements.

The company follows EU requirements, national building codes and applicable environmental, sanitary and fire safety requirements for building design and construction, including designated specifications of utilities use. CTP has internal permitting team responsible for obtaining all the construction and operational permits, including environmental authorization, water supply, sewage, electricity, fire safety permit etc. Construction contractors with capacity to manage the environmental and OHS risks inherent to the construction operations are hired via bidding process. Environmental and social management plans, as a part of overall construction management plan, are developed by construction contractors, these plans typically include proper stormwater management, dust/ noise control and waste management practices.

Policy, Management System and Management Programs:  

CTP’s vision is to develop high-quality and sustainable logistic and industrial properties with a property useful life of 50 years. The company focuses its efforts on the following key environmental pillars: (i) green building certification, (ii) renewable energy and energy efficiency and (iii) resource conservation (water circularity and waste recycling). The company’s overall goal is to achieve operational carbon neutrality by 2021 and to have the entire portfolio of 300+ buildings BREEAM certified. CTP plans to codify and adopt an overarching Sustainability Policy for the entire group in 2021. CTP is encouraged to include IFC Performance Standards as E&S requirements in its policy (ESAP #1).

The company has a vertically integrated business model and its operations involve selection of location, design, construction, and management of properties. Sustainability and ‘green’ features are integrated throughout all stages of property development and operation. The company has developed its own building standard, which provides technical specifications on materials and technologies, as well as structural, engineering features (electricity, heating, fire prevention, sanitary premises and etc.), which are based on energy efficiency and eco-friendly requirements. CTP’s standard building specifications are used to ensure a consistent approach for quality and performance of buildings in all countries of operations.

CTP has implemented management system certified compliant with ISO 14001 (environmental management) and ISO 50001 (energy efficiency) in the Czech Republic and Romania and plans to finalize ISO certification in the remaining countries by 2023. The scope of certification includes construction and property management. Annual internal and external audits are carried out regularly to verify the management system’s compliance.

CTP uses BREEAM New Construction standard in Romania, to ensure good industry practices related to environmental issues during the construction period (material use, water and waste management, noise, transport organization, safe and healthy surrounding) and construction practices. Construction contractors are contractually bound to develop environmental management procedures (i.e. waste and water management) and have SOPs addressing occupational health and safety issues.

Organizational Capacity and Competency

The Group Sustainability Officer is responsible for development, implementation and performance tracking of sustainability initiatives across CTP’s countries of operation.

CTP has internal teams responsible for design, procurement, construction and property management and the relevant requirements are incorporated throughout the process to ensure its property’s design and development is in compliance with BREEAM standard. Environmental and energy management responsibilities are incorporated in their daily operations. Construction works are conducted by qualified construction contractors and supervised by a project supervisor assigned by the company.

Property managers are responsible for day-to-day asset management and communication with tenants. CTP outsources maintenance services such as housekeeping, cleaning, groundskeeping, general building maintenance, security, utility maintenance, and repairing.

CTP maintains a competence matrix with description of expertise and skills needed for different types of employees and provides the relevant training internally or externally.

Housekeeping rules are included into the lease agreement with CTP’s tenants and CTP has service agreements signed with its tenants. Tenants are responsible for holding all environmental and social authorizations related to their operations (waste management, health and safety etc.), as needed.

The company works with reputable construction contractors (for example, Cordeel, AIC) with solid track records and implemented environmental, health and safety (EHS) management systems for the execution of works. Based on the design documentation, the construction contractors develop the construction work and management plans to address environmental and occupational health and safety issues (e.g. job safety instructions, storm water runoff management, waste management and etc.), traffic and transport management plan. The construction contractors are supervised regularly by the responsible CTP construction team.

Monitoring & Reporting:

CTP has developed its sustainability strategy, as well as established targets and key performance indicators (KPIs). CTP buildings are typically equipped with the building management system (BMS), which allows for the automatic control and optimization of the building’s mechanical and electrical systems such as ventilation, lighting, power, fire safety and energy demand management. The company has developed an internal sustainability index, which allows it to track achievement of key sustainability indicators at each property. Sustainability-related KPIs are set for all property managers, and compliance with these KPIs is monitored via the performance evaluation process.

CTP conducts regularly internal / external audits as per its management system procedure. New buildings are added to the ISO certification list during annual audits.

Emergency Preparedness and Response

The company’s properties are designed and constructed in compliance with local legislation requirements and standards on safety and emergency preparedness and equipped with automated detection and alarm systems (leak prevention and detection, fire alarm and suppression etc), which allow to monitor building’s performance and prevent emergency situations. Properties that are certified under BREEAM in Use standard, which among other criteria includes building management practices on chemical storage have been assigned high ratings.

Emergency preparedness and evacuation plans are developed for each property and lessees are responsible for emergency staff training and conduction of evacuation and fire drills.

COVID-19 response plan

CTP followed EU and countries’ recommendation on COVID-19 response measures, which included home-based work, social distancing at workplaces, limitation of number of employees in offices, staff rotation by shifts, temperature checks, enhanced disinfection and etc.                                                

 Human Resources Policies and Procedures, Working Conditions

At June 30, 2020, the company had 388 employees, out of which around 80 employees are from construction / design/ procurement teams and 130 in the property management team. All employees are full-time direct hires. The company is committed to gender diversity and employees split by gender is nearly 50/50.

No retrenchment is expected as the company is expanding, and the company states that there have been no instances of workforce reduction, any social benefits cut off or no-pay-leave arrangements due to the COVID-19 pandemic.

Each country of operation has its own HR Manager and labor policy. Additionally, all HR procedures are adopted locally. Terms and conditions of employment related to working hours, annual leave, wages and benefits are specified in labor contracts. All information related to the company, labor and working regulations covering values, code of conduct, training, safety rules, grievance mechanism is provided as part of the onboarding process. The company’s employment are consistent with principles of non-discrimination and equal opportunity. The company offers salary packages above market labor rates and promotes and supports its employees career development via sponsorship of educational programs.

CTP will develop and implement group level HR policies and procedures, which at a minimum will address the following areas: diversity, equal opportunities and non-discrimination; harassment and gender-based violence prevention and response, code of conduct, prevention of any form of child labor or forced labor. (ESAP action #2).

Third Party Workers

CTP uses the services of third party / outsourced workers for activities such as (housekeeping, cleaning, groundskeeping, general building maintenance, security, utility maintenance, repairing etc). Transportation and loading/unloading of materials stored in CTP’s warehouse is handled by tenants directly. Construction is carried with the help from reputed contractors. Typically, at its peak the construction workforce can reach up to 300 on any given site.

CTP is committed to responsible HR practices and does not tolerate any form of illegal employment. These corporate values are specified in the Code of Conduct, which is applied to third-party workers and contractors too. Obligations to manage labor, environmental, health and safety issues, train staff and provide personnel protective equipment are included in contracts with service providers (housekeeping, equipment maintenance) and monitored via existing procedures.

COVID-19 impact on CTP’s construction projects has been minimal since there were no restrictions in place specifically targeting construction works. Service contracts were maintained by CTP and third-party workers continued to provide services following applicable COVID-19 precautionary measures.

There is no workers’ accommodation provided on the construction sites and all workers, including workforce of construction contractors, are hired locally.   

Occupational Health and Safety

Occupational health and safety risks from CTP’s own operations are limited. CTP has adopted occupational, health and safety rules and OHS engineer, who is outsourced, regularly provides training to employees, as required by the national law. CTP had no significant safety incidents or accidents with its employees or contractors during last 5 years.

For standing properties, CTP’s operational staff is responsible for permitting and supervision of works performed by the third-parties’ employees within a building. For construction projects, CTP engages with reputable construction contractors with proven track record of successfully implemented similar projects and operational EHS management system. OHS requirements for its contractors are incorporated in the tendering and selection process as well as in the construction contracts. HSE obligations are included into the legal agreements with contractors, such as having own HSE engineers onsite and staff properly trained and equipped by personal protective equipment in accordance with the type of performed works. Construction contractors should have SOPs in place with addressed occupational health and safety measures. Construction contractors are supervised regularly by an independent OHS supervisor, hired by the company with the reporting line to a responsible project manager. In addition, state inspections are conducted regularly at the construction sites. CTP tracks OHS incidents occurred with contractors’ workforce, participates in investigation and develops the respective corrective actions to mitigate risk.

Grievance mechanism

CTP encourages fair and trustful communication among employees and promotes direct day-to-day dialogue and uses internal and public social media accounts for communication. CTP has developed a whistle blowing system under its Code of Conduct. Complaints, including anonymous complaints, can be submitted via e-mail, which reaches the Compliance Officer for consideration and further actions. While this practice is in place, a formal documented procedure for addressing complaints is not elaborated yet and this is planned for 2021 (ESAP #3). CTP’s grievance mechanism will also cover third party workers (contractors). The mechanism will be suited to address sensitive grievances such as harassment and gender-based violence. The company will appoint a harassment/gender focal point/contact person who will be trained in responding to harassment related grievances.                                               

 CTP develops eco-friendly “green” properties and 100% of its logistic and industrial portfolio is BREEAM certified (292 buildings across 6 countries as per June 30, 2020). CTP has its own building standards, which includes all the specifications to ensure compliance with BREEAM standards. CTP maintains a “White book” that includes requirements with regards to materials, equipment and technologies and suppliers. The “White Book” is upgraded annually in order to incorporate the latest eco-friendly technologies, low-carbon and easily recycled materials. Roofs of all new buildings are built ‘solar-ready’ with a minimum of 10% skylight coverage. As per CTP’s estimated capacity of roof-tops, solar PV installations may reach up to 220 MWp. CTP has partnered with Nano Energies, which supplies 100% renewable energy to CTP’s properties.

Alongside with new developments, CTP invests in retrofitting its standing buildings (LED lighting, HVAC upgrade, BMS), which usually results in upgraded energy certification.

CTP continuously introduces new and eco-friendly features, such water reclamation and reuse, people-friendly and eco-friendly parks, zero wastes and better recycling containers, etc. Best practices from pilot projects will be transferred to other projects wherever possible.

CTP’s properties are connected either to municipal utilities (electricity, water, sewerage system) or have own on-site wastewater treatment facilities as per the respective permitting requirements. Monitoring of resource consumption and quality of wastewater treatment is regularly conducted by CTP.

Tenants are responsible for holding all the environmental permits and authorizations related to their own operations, including holding of contracts with licensed companies for waste recycling, treatment and disposal. Wastes generated during the construction and retrofitting works are managed by the construction contractors in accordance with the developed waste management plans.

The GHG emissions from the company’s operations are well below 25,000 tons CO2eq/year, and the company targets to become carbon neutral by 2021.                                                  

 Structural safety

Building’s design is based on technical and structural standards and specifications and is compliant with the national regulations related to seismic stability, risks in respect of the design and execution of construction works. The company strictly adheres to design and construction standards for seismic risks prevention of new developments, which is also confirmed by the construction permit issued by the state authorities.

Life & Fire Safety

CTP follows NFPA standard requirements for fire safety measures across all facilities. Fire safety measures include ESFR (Early Suppression, Fast Response) ceiling sprinkler protection, smoke detection system, fire alarms in all areas, façade panels with 120 minutes of fire resistance, evacuation exits and emergency lighting.

Security Services

CTP via tendering process hires licensed unarmed security services, and the security staff is properly trained.

Transportation impacts

While the transportation is the responsibility of individual tenants, transportation issues are considered by CTP as an inherent part of project development and BREEAM green certification process. CTP selects strategic location for its facilities and ensures that robust transport assessment  and travel planning is conducted, which typically includes design and management measures aimed to reduce transport-related pollution and congestion, such as accessibility of public transport networks, car parking and cycle storage spaces and other activities and strategies which are implemented to reduce the transport impacts.