Excellence award for ESG practices

Winner: DMCC, UAE

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If the pandemic served to highlight the importance placed on ESG practices by investors looking to expand into new markets, free zones have taken note. This year’s overall winner, Dubai’s DMCC, set up its own Sustainable Development Goals (SDGs) steering committee to oversee the zone’s ESG efforts, demonstrating its awareness and winning the excellence award for ESG practices in the process.

DMCC was the first free zone in the Gulf Cooperation Council area to commit to the UN Global Compact (UNGC). In 2021, it complied with the requirement of external assurance from the global reporting initiative by having its sustainability report audited by Deloitte. It hosts sessions with its members to encourage them to commit to the UNGC, offering them a discount of up to 30% on their business licence if they do so.

As the UAE enjoys one of the highest rates of solar exposure in the world, it makes sense for DMCC to put that to good use. The zone announced this year that it is installing the country’s largest district solar car park shade to save more than 7600 megawatt hours (MWh) of energy each year in its Jumeirah Lakes Towers community.

Aside from the environment, social impact appears to be one of the zone’s salient concerns within its ESG practices. It operates the UAE Kimberley Process to stem the illicit trade of conflict diamonds. It supports and enables women empowerment initiatives such as Evolvin’ Women, which focuses on providing jobs and education to women in African countries from unprivileged communities; 37% of its workforce is female. DMCC also teamed up with C3 (Companies Creating Change) to launch a social impact scale-up programme supporting businesses aligned with the UN SDGs.

Highly Commended: Katowice Special Economic Zone, Poland 

Katowice Special Economic Zone was highly commended for its ESG practices. The zone divides its strategy to give equal attention to the acronym’s three constituent parts. In its first pillar, on the environment, it supports investment projects in the electromobility industry (Silesian Energy Storage System), hydrogen technologies (Silesian-Maopolska Hydrogen Valley) and renewable energy.

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The zone’s second pillar focuses on the social, health and educational needs of its employees. It assesses investment projects in terms of how they can help employees to improve their qualifications, whether they provide additional medical care, or offer packages related to leisure and sports activities. The zone also promotes physical activity among its employees through initiatives such as a golf academy or wheelchair rugby championships. 

Its third pillar, which looks at corporate governance, ensures that there is transparency throughout the process of onboarding new members. Companies have a transparent purchasing policy and each tender is public with open access, while the zone’s tender committee also comprises individuals independent of those tendering for contracts.

Excellence award for Key Performance Indicators (KPI)

Winner: Hamriyah Free Zone Authority, UAE 

Hamriyah Free Zone Authority won the excellence award for its key performance indicators. The judges were impressed by the rigour with which the zone seeks to ascertain its own success. Some of the key ways the zone measures success is by looking at total revenue; investor retention rate; the number of new investors; total area leased; revenue from visas; innovation in services and a customer satisfaction rate of 90% or more. As the zone contributes more than 20% to Sharjah’s GDP, it defines success as its economic contribution to both the emirate and the UAE as a whole.

Highly Commended: Ajman Free Zone, UAE 

Ajman Free Zone was highly commended for its key performance indicators. The zone puts an emphasis on the expansion of existing investors; visits from new “serious” potential investors who displayed an interest in Aqaba International Industrial Estate; and invitations from neighbouring countries to replicate the success that the zone has already achieved. 

Excellence award for infrastructure investment

Winner: DMCC, UAE 

As free zones have diversified their offer to match global demand for new sectors and new ways of working, they have also undergone infrastructural changes. DMCC’s efforts in this area have been rewarded with the excellence award for infrastructure investment. In 2021, the zone launched the DMCC Crypto Centre to promote the development of blockchain technologies in Dubai, providing entrepreneurs and innovators with access to capital and resources. In the summer of the same year, it opened a co-working space offering members private spaces to work, as well as the opportunity to collaborate and network.

The zone is also set to unveil the first tower in its Uptown Dubai development. The building, which reaches a height of some 329 metres, will serve businesses and residents alike and provide a mix of retail and lifestyle destinations. In parallel, the zone has rolled out a series of developments for the Jumeirah Lakes Towers, including improved road infrastructure, new sports areas, the deployment of electric scooter stations, more green spaces and improved water quality. 

Highly Commended: Dalian Free Trade Zone, China

Dalian Free Trade Zone was highly commended for its infrastructure investment. By autumn 2022, the zone is due to complete the first phase of its artificial intelligence (AI) supercomputing centre, which will mainly serve scientific research institutions, and the AI and pharmaceutical sectors.

The zone has also embedded AI into its ports. In 2021, its Dayaowan Port launched the “smart port 2.0”, which uses 5G networks, the Internet of Things and AI to upgrade its daily operations. One focus is on the whole-site automation of rail cranes, certain quay cranes and container trucks.

Elsewhere, construction on an undersea tunnel worth Rmb22.3bn ($3.3bn) of investment is underway. This will reduce the traffic between the zone and the city centre by cutting the distance by 30km, or 30 minutes’ driving time. The zone also plans to build a new airport bonded zone in the upcoming Dalian New Airport, the world’s largest maritime airport, slated to open in 2025.

Construction has also begun on a cold chain central warehouse, which seeks to provide a one-stop central cold storage facility for high-quality overseas frozen and fresh products. In future, the facility will also provide supply chain finance to investors, along with port value-added services.

This article first appeared in the October/November 2022 print edition of fDi Intelligence.