IFC’s appraisal considered the environmental and social management planning process and documentation for the Project and gaps, if any, between these and IFC’s requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through implementation of these measures, the Project is expected to be designed and operated in accordance with Performance Standards objectives.
Policy, Management System, and Management Programs:
The Group is strategically focused to develop and manage its property in a sustainable manner and has sustainability aspects ingrained in the Group’s strategy, governance, policies, risk management and operational practices.
Sustainability considerations are cascaded to operational procedures and processes for new developments, refurbishment and property management. The group-wide ESMS is in line with IFC PS requirements. According to its ESG action plan, the Group continues formalizing its operational ESG related policies and procedures, aiming to provide guidelines for sustainable and performant operations and development, minimize waste and increase recycling, as well as to adapt and mitigate climate risks.
Identification of Risks and Impacts
Consideration of sustainability and climate risks are integrated into the Group’s overall risk management framework, in line with ISO 31000:2018, international guidance on risk management.
The Group undertakes an Environmental Impact Assessment (EIA) study as per the national legislation in countries of operations. In addition, buildings’ design is guided by the Group’s policy to develop green buildings as per the BREEAM “New construction” certification, which has special emphasis to assessment of site contamination, construction materials selection, waste disposal, energy performance, organizing stakeholder engagement, biodiversity, safety and wellbeing. The Group engages qualified consultants to conduct environmental and social (E&S) due diligence prior to acquisition of any property, either existing building or land plot to early identify potential E&S risks.
The Group articulates the zero tolerance to absence of appropriate approvals and permits, any risks related to quality and safety of construction materials, installations and equipment that may compromise buildings’ safety during construction or operation.
Organizational Capacity and Competency
An environmental, social and governance (ESG) department was established in 2022, and is led by the Group Head of Sustainability, who has overall responsibility for driving the sustainability agenda across all departments, achievement of ESG strategic goals, tracking and reporting progress.
For day to day practices, the ESG department supports the development department , on project design, cost management, tenant coordination and renewable energy development. The Group hires a qualified project management company (PMC) to manage property construction projects. PMC is responsible for quality control, management and supervision of other contractors engaged for earthworks; construction; facade; roof covering; heating, ventilation and air conditioning; life and fire safety; electrical and plumbing and others type of works. Contractors are hired via a competitive supplier selection process and ESG selection requirements among others include proven professional capabilities and experience, availability of environmental, health and safety (EHS) management system.
Operational buildings are managed by the asset and property management teams which are responsible for engagement with tenants and service providers, property and utility management, health, safety and security.
Emergency Preparedness and Response
The Group’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. Emergency preparedness and evacuation plans (EPRP) with procedures, emergency contact and communications, training and drills are developed for each property. EPRP for construction period are prepared by contractors as a part of EHS package of documentation developed prior to commencement of construction works.
Monitoring and Review
Internal audits, which cover ESG aspects are conducted on a regular basis by the property management team and sustainability team. Group collects performance data and key performance indicators (such as energy and resource consumption, waste generating and waste recycling rate, greenhouse gases emissions, health and safety conditions etc.) from its assets and subsidiaries, aggregating them in dedicated platform and in internal/external reports. The Group utilizes a special ESG digital platform for real estate companies which provides support with ESG strategy implementation as per good industry practices, as well as to collect and analyze consumption data for reporting. Sustainability Committee meets twice per year and the progress is reported to the Board of Director regularly.
NEPIRC highly utilizes the expertise of qualified consultants (BREEAM assessors, EHS auditors etc.), ESG rating agencies to carry out benchmarking, third-party independent assessment to enable alignment with good industry practices.
PS 2 – Labor and Working Conditions
Human Resources Policy and Working Conditions:
As of 31 December 2022, total number of employees is around 475 (around 260 workers in Romania and 40 in Bulgaria). Top and middle management is 60% female and 40% male in aggregate, while gender distribution varies for specific functions.
Human resources (HR) function is centralized in the Bucharest office. Group-wide HR policies and procedures include code of ethics, diversity and inclusion policy, employees’ handbook. HR procedures address terms of employment, working hours, training, leave, employee welfare, wages and benefits, training, the principle of equal opportunity, fair treatment and non-discrimination, and are generally in line with IFC PS requirements. The Group has an open-door policy and employees are encouraged to share their concerns, suggestions or complaints with their line manager, HR manager, Risk and Compliance, Internal Audit. Compliant channels are monitored by an independent third-party service provider and each report is documented and submitted to the CEO, CFO, Internal Audit Director, Board of Directors Chairman, Audit Committee Chair. Any grievances, including anonymous could be submitted via several channels (web-based portal hosted on the Group corporate website, e-mail, telephone hotline) available to both employees and any external party. No relevant complaints or any other reports recorded in 2022.
Occupational Health and Safety
Property managers have entire responsibility for EHS issues, including ensuring of staff training, and EHS performance oversight in the Group properties. Third-party suppliers are contractually required to have staff properly trained and equipped by personal protective equipment in accordance with the type of performed works.
NEPIRC launched systematic application of “BREEAM New construction” standard for all its new developments group-wide, which among other, sets up good practice requirements for construction management practices, such as E&S risks management during construction works, labor risks in supply chain through requirement for responsible sourcing, stakeholder engagement and notification.
PMC is contractually required to have an EHS engineer to manage construction and other contractors during the construction phase to ensure compliance with the Group’s policies and national occupational health and safety requirements. The construction period is in average 8-12 months and number of workers at peak is around 300-400 people. Qualified design and construction contractors with EHS management systems and sufficient capacity to manage EHS risks are hired through a bidding process. Construction contractors are contractually required to have safety procedures and practices in place (e.g. job safety instructions, safety talks and briefings, etc.), to develop project–specific plans to ensure safety in construction and undertake regular checks to ensure compliance. These checks are supported by regular supervision performed by PMC and the Group’s responsible project managers. The Group reported having no incidents/ injuries during the last three years.
Supply chain
The Group has adopted a Sustainable Procurement Policy advocating ESG values in the supply chain and assesses the ESG practices and performance of its potential significant suppliers during the tendering stage. The Group Sustainability clause is part of all legal agreements with suppliers. The Group procures solar PV panels only from reputable, multinational companies, which have policy statements and internal procedures, including prevention of forced labor use.
PS 3 – Resource Efficiency and Pollution Prevention
In accordance with BREEAM certification standard, design of new developments includes resource efficient measures such as use of renewable energy, rainwater harvesting and water recycling, use of eco-friendly construction materials and substances, and ensures wastes minimization. The design process includes a life-cycle assessment, which considers environmental impacts, including global warming potential, ozone depletion, and others. The assessment is aimed to evaluate the building’s environmental performance from a whole life-cycle perspective and identify potential improvements.
Pollution prevention measures during construction period are specified in construction management plans and their implementation is monitored by the PMC and EHS Engineer hired by the Group to supervise EHS performance.
The Group has approved a CAPEX program as part of its decarbonization strategy and an ESG Action plan aimed to improve energy efficiency, monitoring of carbon dioxide emissions and air quality, implementation of building management system’s adaptation and smart metering, water management improvements including water retention systems and sensors for water leakage, waste minimization and recycling, certify buildings to level ‘A’ on energy performance, other improvements (HVAC equipment improvements, energy recovery, motion sensors installation to escalators), biodiversity improvement (greenery inside/outside the mall, beehives, insects houses) and other.
Operational assets are mainly connected to municipal sewerage system and only several shopping malls have on-site wastewater treatment facilities with the further discharge to surface water. Environmental permits are obtained for such properties and monitoring of discharged water is conducted by accredited laboratories.
The Group developed a waste management plan aimed to increase the selective waste collection rate and reduce waste going to landfill.
At industrial facilities as per terms of leasing agreement, tenants are responsible for all operational, maintenance and energy resources supply issues, such as water and electricity supply, wastewater discharge, waste disposal with support of the Group, if required.
PS 4 – Community Health, Safety and Security
Romania and Bulgaria are situated in an area of seismic activity and the national regulations cover seismic risks in respect of the design and execution of construction works. The Group adheres to design and construction standards for seismic risks prevention during the new developments, which is confirmed by a construction permit issued by the state authorities.
Life and fire safety
During the technical design, fire-safety specifications and fire protection measures are implemented in accordance with applicable codes, standards and regulations (national, EU and NFPA). As per the good practices, the Group will develop and implement a corporate guideline with description of the L&FS requirements for its shopping malls (ESAP #2).
The fire safety measures include fire detection (heat/smoke detectors), alarm system, fire doors at all staircases, outdoor and indoor fire hydrants, automatic water sprinkler systems (depending on the area), smoke control systems, fire hose reels and fire extinguishers, directional signs displayed throughout the buildings indicating emergency exit. The company holds fire safety permits for each building as required by the national legislation.
Tenants are required to submit plans of all modifications, including updated plans of sprinkler, detection, evacuation etc. These plans are evaluated by the team in the mall and by local authorities, if needed. The tenants themselves are responsible for maintenance for the fire protection systems in their shops. NEPIRC appoints ‘tenant coordinators’ who act as single point of contact between a mall and tenants. Full procedures are described in the leasing contracts. Fire drills with engaging of tenants and fire brigades are conducted on a regular basis (twice per year in shopping malls).
Inspection of utility and equipment is carried out daily, weekly, or monthly depending on items and maintained by licensed companies.
Security personnel:
Security services are provided by a private agency licensed by the national law. Security personnel are trained in the use of force for defensive purposes and in an appropriate conduct toward customers, workers and local community. The Group’s buildings are equipped with video surveillance system operating 24 / 7.
