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.
PS1: Assessment and Management of Environmental and Social Risks and Impacts
Environmental and Social Policy and Management System: Vesta’s Environmental, Social, and Governance (ESG) Policy aligns with IFC Performance Standards and includes commitments to climate change mitigation, reducing resource use and waste, promoting human rights, diversity and inclusion, responsible sourcing, transparency, accountability, and stakeholder engagement. Implemented through a robust Environmental and Social Management System (ESMS) and supported by various policies such as the Environmental Policy, Human Rights Policy, Diversity, Equality & Inclusion Policy, Biodiversity Policy, Sustainable Construction Manual, and Responsible Investment Policy, Vesta references international standards like the UN Principles for Responsible Investment (UN PRI), Global Real Estate Sustainability Benchmark (GRESB), UN Global Compact, AA1000 Assurance Standard, Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), Task Force on Climate-Related Financial Disclosures (TCFD), Guiding Principles on Business and Human Rights, the Universal Declaration of Human Rights, and the ILO’s Declaration.
Vesta’s Environmental Policy commits to protecting the environment and preventing pollution, guiding sustainable management of water, energy, resources, waste, and biodiversity. The Vesta Human Rights Policy outlines how the company integrates human rights principles into its business model and daily operations.
E&S Assessment and Management: Vesta assesses and manages E&S risks through a comprehensive process based on its E&S Policy and relevant regulations and permitting requirements, which includes identification, monitoring, management, and documentation of potential E&S issues. Site selection IPs considers current land use, connectivity, and proximity to the grid, and process of identification of E&S risks and impacts, including a Climate Change Risk assessments and a Phase I environmental site assessments, followed by a Phase II, if needed, to identify and mitigate land contamination risks. Vesta’s Sustainable Construction Manual guides contractors on minimizing construction impacts, emphasizing energy and water efficiency, waste management, and reducing environmental impacts.
Social Risks: Vesta’s site selection process avoids any potential negative impact on communities, including any economic of physical displacement of population or impacts on Indigenous Peoples’ lands. In relation to land acquisition, Vesta acquires land on willing buyer/willing seller basis, mainly of land that is uninhabited and with low or no agricultural use.
As per ESAP #1, Vesta will build on its existing procedures to develop an E&S Assessment and Management Procedure (E&S-AMP) consistent with IFC PS1-8 requirements to guide the site selection and assessment for new sites or the E&S due diligence for acquisition of existing assets. The E&S-AMP must focus on avoiding E&S impacts, aligning also with the enhanced Biodiversity Policy (see ESAP #3). Additionally, per ESAP #2, Vesta will prepare a Land Acquisition Protocol aligned with local regulations and consistent with IFC PS5.
Biodiversity: Vesta’s Biodiversity Policy emphasizes legal compliance, application of the mitigation hierarchy focusing on avoidance of deforestation, sustainable use of ecosystems, optimize space use, and plan infrastructure with biodiversity in mind, aligning with international biodiversity targets and integrating Taskforce on Nature-related Financial Disclosure (TNFD) principles. Vesta incorporates native flora and pollinator gardens in projects to enhance biodiversity, improve air quality, and add economic value. Per ESAP #3, Vesta will enhance its Biodiversity Policy to be consistent with IFC PS6 requirements. This update will include commitments to No Net Loss and Net Gain in Natural and Critical Habitats (respectively), no new projects in UNESCO Natural and Mixed WHS and AZE sites, except as allowed under PS6. The policy will be applicable to all new assets and to recently developed assets that have entailed habitat conversion. This updated policy will inform the E&S Assessment and Management Procedure (E&S-AMP) described in ESAP #1.
Life and Fire Safety (L&FS): Vesta’s IPs must comply with national and local structural and fire safety code (as applicable), and their IPs are usually designed to meet internationally recognized L&FS codes (e.g., US NFPA).
Emergency Preparedness and Response: Vesta has comprehensive Emergency Response Plans (ERP) for all its assets, which include risk analysis of potential emergency scenarios, formation of an emergency response committee and first response teams, and clear definitions of roles and responsibilities, as well as strong engagement with neighbouring communities. The ERP also covers training requirements for emergency personnel, provision and maintenance of emergency response equipment, and regular performance of emergency drills and simulations. Vesta’s Internal Civil Protection Unit oversees civil protection actions, organizes employee brigades, and ensures systematic procedures for prevention, emergency response, and recovery, with a focus on fostering a culture of civil protection through training and drills.
Contractor Management: Vesta’s Responsible Sourcing Policy (RSP) focuses on engaging contractors and suppliers to comply with labor, human rights and environmental, health, and safety (EHS) standards. The policy mandates sustainable sourcing practices to reduce costs and environmental impacts, prohibits toxic substances, encourages biodegradability, and minimizes environmental risks. It strictly forbids forced labor and child exploitation, requiring all contractors and suppliers to comply. Responsibilities for enforcing the RSP are shared across Vesta’s ESG department, employees, and purchasing managers. The policy includes a Contractor’s risks and mandates adherence to Vesta’s ESG policies and monitors their performance regularly. Non-compliant suppliers may face contract termination unless they commit to corrective measures. Annually, selected contractors and suppliers undergo an ESG audit by an external consultant, resulting in an action plan for improvements, identifying significant risks, and recommending continuous improvement. In the case of construction contractors, Vesta assigns personnel to monitor their E&S and labor-related performance on site. See also PS2: Workers Engaged by Third Parties.
Tenants: While Vesta is not responsible for the E&S compliance or performance of its tenants, as a good practice, it has issued a Tenant ESG Guide, providing tenants with information on sustainability to help them develop their own ESG strategies. The guide offers examples of good practices to reduce operational costs and negative impacts. It includes practical tips on energy and water efficiency, waste management, climate resilience, biodiversity, human rights, health and well-being, and emergency response. Tenants are encouraged to set reduction targets, collect data, and comply with relevant legislation. Lease agreements include clauses for environmental compliance, human rights protection, and periodic inspections.
Organization: Vesta’s ESG Management Structure includes an ESG Committee comprising five members, four of which also serve as Board members. The ESG Director oversees policy implementation, supported by a Training and Competency program for key roles. The ESG Committee is responsible for implementing the ESG Strategy and reporting compliance, to the Board. In addition, the ESG Committee is responsible for risk assessment, and budget approval, while Senior Management aligns the policy with strategic goals. The ESG Department supports policy updates, communication, training, and performance monitoring. Vesta assigns EHS specialist to supervise the construction and operations of IPs, and Vesta’s contractors are required to assign an adequate number of EHS specialists to supervise construction.
Monitoring and Review: Vesta publicly reports its E&S performance in its annual ESG report (https://vesta.com.mx/informe-anual). Vesta’s ESG Unit conducts continuous monitoring, evaluation, and improvement of its ESMS, policies and procedures.
PS2: Labor and Working Conditions
Working Conditions: Vesta employs all of its 105 employees directly, 45% of whom are women. Vesta hires third-party contractors to provide services such as cleaning and security. Vesta’s Human Resources Policy is in line with IFC PS2 and local regulations. Vesta’s Policy on Diversity, Equality, and Inclusion aims to prevent discrimination by providing training on legal rights, tracking diversity in hiring and promotions, and conducting work environment surveys. Mitigation measures include prompt intervention, thorough investigations, and appropriate disciplinary actions. Additionally, Vesta’s Human Rights Policy prohibits forced and child labor, promotes diversity and non-discrimination, and supports freedom of association and collective bargaining. The Policy also addresses non-discrimination and gender-based violence and harassment (GBVH), promoting gender equality and labor inclusion for people with disabilities and those in vulnerable situations. Vesta emphasizes diversity on its Board of Directors, mandates compliance with these policies for all employees and contractors, and provides a confidential channel for managing grievances, including those related to GBVH.
Occupational Health and Safety: Vesta is committed to occupational health and safety (OHS), fostering a culture of risk-awareness and implementing preventive measures. Vesta has an OHS Management System and a Policy on Prevention of Psycho-Social Risks aligned with Mexican regulations and Good International Industry Practices (GIIP). The company contracts reputable contractors with robust OHS systems and ensures continuous on-site supervision, focusing on key aspects such as work at heights, training, and electrical safety.
Workers Engaged by Third Parties: Vesta requires construction contractors to track labor matters, adhere to the Workplace Safety Program and national laws, and ensure workers’ social security enrollment with the Mexican Social Security Institute (IMSS). Contractors must comply with Vesta’s ESG Requirements and Audit Procedure, which includes prohibiting forced and child labor, ensuring health and safety conditions, promoting diversity and inclusion, and avoiding inhumane treatment. They must prevent abuse and harassment and ensure fair hiring, payment, promotion, and dismissal practices without discrimination. Vesta also implements preventive measures like ergonomic practices, regular health testing, and safety culture campaigns, along with mitigation strategies such as emergency plans and thorough incident investigations.
PS3: Resource Efficiency and Pollution Prevention
This section summarizes the key PS3 elements relating to the acquisition, construction, and operation of IPs by Vesta.
Resource Efficiency and GHG Emissions: Electricity for Vesta’s industrial parks (IPs) is sourced from the national grid, with backup generators available for emergencies. Out of a total of 3.2 million m² of leasable area, nearly 1 million m² (30%) have green building certifications, including LEED, EDGE, and BOMA standards. Vesta aims to achieve green certification for 20% of its IPs by 2026 and 28% by 2030.In 2023 Vesta’s total combined Scope 1 and 2 emissions from fuel consumption for offices and common areas amounted to 1,553.55 tonnes of CO2 equivalent (tCO2e).
Vesta is committed to water stewardship, aiming for a 20% reduction in consumption by 2025 as part of its ESG initiatives. Water conservation is integrated into the design phase of parks, and water efficiency clauses are included in lease agreements. Vesta encourages tenants to report their water usage and will adopt a Water Sustainability Procedure, including Water Resources Sustainability Assessments (WRSA) for new IPs, in line with IFC PS and WBG EHS Guidelines. Key initiatives include maintaining water infrastructure, capturing rainwater, reusing
and recycling water, and repairing leaks. In 2023, Vesta treated 17,836 m³ of wastewater and had a total water consumption of 580.72 megaliters, including by tenants. The Water Management Procedure ensures efficient water use, leak mitigation, and involves all personnel in conservation efforts.
Pollution Prevention - Wastewater: Given the nature of industries in Vesta’s industrial parks (IPs), which involve logistics and lights industrial processes, the wastewater generated is minimal and primarily from sanitary uses. Tenants must ensure their effluents meet specified standards before discharging into the trunk pipeline that connects to Vesta’s Common Effluent Treatment Plants (CETPs) for further treatment. These CETPs comply with national laws and relevant WBG EHS Guidelines. In 2023, Vesta treated and reused 17,836 m³ of wastewater.
Pollution Prevention – Air and Noise: Air and noise emissions are mainly during the construction phase of Vesta’s IPs and primarily consist of dust and particulates, managed and monitored according to national law. Tenants are responsible for complying with local air and noise emission regulations. For new construction and remodeling, Vesta avoids ozone-depleting refrigerants in Heating, Ventilation, Air Conditioning, and Refrigeration (HVAC&R) systems.
Solid and Hazardous Waste: Construction waste at Vesta’s industrial parks (IPs) includes domestic waste, inert waste, recyclables, and small quantities of oil-contaminated materials. Vesta has a Waste Management Procedure for both construction and operations of common areas, detailing waste segregation, storage, transportation, and disposal processes. Vesta’s Hazardous Waste Management Procedure ensures legal compliance and proper control from generation to disposal, involving all personnel and service providers in maintaining safety and environmental protection. Tenants are responsible for adequate management and disposal of waste in line with local regulations.
Climate Change: IFC’s review identified low E&S risks from climate change, such as increased temperatures and water scarcity, which Vesta manages through Climate Risk Assessments and a Climate Change and Resilience Policy. This policy, aligned with TCFD and IFRS S2 standards, integrates climate impacts into their ESMS and emphasizes identifying physical climate risks for future assets. Vesta has water management plans, waste management protocols, and investments in rainwater capture and recycling technology. Their Responsible Investment Policy and Sustainable Construction Manual further support these efforts by identifying risk levels in acquisitions and promoting green infrastructure to ensure proper water flow and sedimentation prevention.
PS4: Community Health, Safety and Security
Community Health and Safety: Some of Vesta’s industrial parks (IPs) are in consolidated urban and industrial areas, while others are in expanding peri-urban zones near capital cities and communities. Key community health and safety aspects include increased traffic during construction and operation, and GBVH risks due to the influx of workers and economic migrants. Traffic impacts are a key focus for Vesta, and it engages with communities and local authorities to identify the best solutions to avoid or mitigate these impacts during construction and operation, including preventing idling trucks and waiting lines outside the parks. To manage these risks, Vesta’s E&S Assessment and Management Procedure under PS1 will include guidance to develop Traffic and Road Safety Plans, and/or Community Health and Safety Plans, where needed.
Security Personnel: Permanent fences or walls are erected around the perimeter of each IP. Security and access control is provided by security guards engaged through outsourced and authorized private security companies. Per ESAP #3, Vesta will adopt a Security Management Policy consistent with IFC PS4 requirements and as guided by the IFC Good Practice Handbook on the Use of Security Forces.
