CITY DEVELOPMENTS LIMITED ANNUAL REPORT 2022 SUSTAINABILITY 70 71 SUSTAINABILITY BOARD STATEMENT reviews. In addition, the CSO submits a quarterly report and communicates with the BSC on CDL's ESG performance and initiatives, as well as global and local ESG trends. CDL’s sustainability governance, management and disclosures are in line with global best practices and SGX’s mandate on climate disclosures and board supervision. To achieve effective company-wide integration of sustainability, the CSO chairs the Sustainability Committee, which comprises members across all departments and operational units. In 2021, CDL stepped up to strengthen the links between its ESG performance with the remuneration of the Key Management Personnel (KMP). With Heads of Departments (HODs) reporting to the respective KMP, the ESG KPIs will cascade down to every level in the organisation. HODs are held accountable for their ESG performances, which are captured in their annual performance appraisal that is linked to their remuneration and promotion. In addition to the annual sustainability reporting, CDL publishes an online quarterly sustainability report at www. cdlsustainability.com. This voluntary disclosure, since July 2017, has set benchmarks for transparency and timeliness of ESG disclosures to investors and stakeholders. 2022 IN REVIEW – ZERO IN ON POSITIVE IMPACT More Robust ESG Policies and Guidelines for Greater Alignment along the Value Chain CDL’s Supplier Code of Conduct, Human Rights Policy, Environmental, Health and Safety (EHS) Policy, Climate Change Policy and Biodiversity Policy underwent a review in 2022 for greater alignment with Paris-aligned regulations and global and local standards. Building upon CDL’s long-established EHS Policy and Green Procurement Guidelines, the Company formalised a Green Building Policy to provide greener, safer, healthier and more inclusive environments for its building users. As waterways inevitably incur the downstream impact of activities on land, the transition to a low-carbon, resource-efficient green economy would not be possible without conserving the ocean. In this regard, CDL has a longstanding commitment to biodiversity protection and urban greenery. Since 2010, CDL has voluntarily conducted Biodiversity Impact Assessments (BIA) on greenfield sites before construction. To advance biodiversity protection and urban greenery at its sites and buildings, a Biodiversity Policy, expanding on BIA practices, was formulated in 2020. The policy complements Singapore’s “City in Nature” vision established in 2021. In 2016, CDL piloted an Environmental Impact Assessment (EIA) study for the Forest Woods residential development project, expanding the usual scope on biodiversity impact to cover the development’s potential impact on traffic, public health, heritage, and the environment. Based on this pilot, CDL is exploring possibilities of applying the EIA for future developments. Scope 3 emissions are also increasingly becoming a priority for companies to tackle their climate risks. CDL has been actively engaging and empowering its value chain, including M&C, to identify opportunities for greater resource efficiencies to lower its carbon footprint. CDL was included in the 2022 CDP Supplier Engagement Leaderboard for the third consecutive year, placing CDL in the top 8% of companies assessed by CDP for supplier engagement on climate change. ACCELERATING TOWARDS THE GLOBAL RACE TO ZERO To tackle the climate emergency, CDL is well placed to accelerate climate action and create positive environmental, social, governance, and business impact. Building upon its corporate ethos of “Conserving as We Construct”, established in 1995, CDL’s Economic, Environmental, Social and Governance (EESG) strategy continues to guide its value creation model to achieve its three deliverables with positive impact: “Decarbonisation”, “Digitalisation and Innovation” and “Disclosure and Communication”. Decarbonisation – Expanding Scope and Managing Performance In 2021, CDL became Southeast Asia’s first real estate conglomerate to sign the World Green Building Council’s (WorldGBC) Net Zero Carbon Buildings Commitment – a global pledge to achieve net zero operational carbon by 2030. This was then expanded to include maximum embodied carbon reduction in new developments and compensation of all residual upfront emissions. In December 2021, CDL revised its Science Based Targets initiative (SBTi)-validated GHG emissions intensity reduction targets (Scope 1, 2 and 3) to be aligned with a 1.5°C warmer scenario, with additional targets to reduce Scope 3 emissions. In 2022, CDL stepped up on operationalising and tracking its carbon reduction performance for Scope 1, 2 and 3 carbon emissions against these SBTi-validated targets. As one of the first four companies in Singapore to adopt the Task Force for Climate-related Financial Disclosures (TCFD) since 2017, CDL completed its third Climate Change Scenario Study in December 2022.1 This study focused on CDL’s readiness for physical and transitional risks. The scope and region included under the CDL Group were expanded, given the rising urgency, scale, and severity of climate change. The study considered the disruptions caused by the prolonged COVID-19 pandemic, which significantly impacted business operations and financial performance. The IFRS Foundation's International Sustainability Standards Board (ISSB) standards, slated to be published in 20232, will require additional disclosures in Scope 3, along with Scopes 1 and 2. In anticipation of this, CDL has continued to raise the bar in tackling Scope 3 emissions through closer strategic alignment and integration with its wider global value chain, including key subsidiaries such as M&C, CBM Pte Ltd, and its supply chain.3 CDL’s renewed SBTi-validated targets aligned with 1.5°C emissions reduction target of 58.8% under Scope 3 (category 15) will extend to all major subsidiaries.4 Digitalisation & Innovation – Addressing Ever-Changing Market Risks & Opportunities Decarbonisation is only possible with effective collaborations amongst the wider ecosystem to create and implement smart and sustainable solutions. It is, therefore, unsurprising that innovation has risen to be the Company's top material issue in 2022. In the past year, CDL has prioritised and intensified its use of innovative and viable green building technology and circular economy solutions. Its strategic partnerships with various start-ups continue, including using Cool Paint at the facade of its assets, such as Jungceylon Shopping Center in Phuket, Thailand, to reduce surface temperature by up to 8oC. The installation of about 7,000 square metres of solar panels are slated to complete by Q2 2023 at the roof of Jungceylon Shopping Center as well. These solar panels have the capacity to generate approximately 1.6 million kWh of electricity, equivalent to 6% of the building’s total annual energy consumption. At CDL’s Irwell Hill Residences, the company piloted another start-up’s battery energy storage system to replace diesel-powered generators at construction sites, successfully achieving an 85% reduction in carbon emissions over a 90-day test period. By implementing an innovative selflearning building intelligence system at Republic Plaza, CDL optimised building air-conditioning performance, achieving a 22% improvement in occupants’ comfort. Other emerging sustainability solutions test-bedded by CDL include solar films, and energy-optimising air-conditioner filters, amongst others. These advanced material solutions have helped to improve overall operational efficiency and minimise heat exposure risks to building users. More details can be found in CDL's ISR 2023, page 60. CDL continues to advocate climate action amongst its stakeholders. At the 8th World Cities Summit in August 2022, jointly organised by Singapore’s Centre for Liveable Cities and the Urban Redevelopment Authority, CDL sponsored the City Innovators Stage. The Company showcased 13 innovator partners with solutions to future-proof the built environment and young start-ups with future-forward solutions to contribute to a low-carbon and sustainable future. CDL will continue to track sustainable building technologies in support of global and national goals for smarter, greener, and more resilient cities to achieve longterm resilience of CDL’s businesses and its communities. Innovative thinking and adoption of Proptech with investment in longstanding R&D partnerships remain crucial in the Company's journey towards net zero emissions. Accelerating Super-Low Carbon, Smart and Sustainable Buildings In line with the SG Green Building Masterplan’s 80-80-80 goals, CDL has been committed to enhancing its existing assets and achieving Super Low Energy Buildings (SLEB) for 80% of its owned and managed buildings by 2030. With this in mind, CDL set new benchmarks for two of its developments: Newport Plaza – Singapore’s first Building and Construction Authority (BCA) Green Mark Platinum Super Low Energy (SLE) Certification for Residential Building and first mixed commercial development (Service Apartment, Offices, Retail); and Copen Grand Executive Condominium (EC) – Singapore’s first BCA Green Mark Platinum SLE EC. CDL is also proud to be a leading developer with a pioneering commitment to green buildings in Singapore, with 120 BCA Green Mark developments since the Green Mark scheme became mandatory in 2008. CDL has achieved approximately $38 million in energy savings from energyefficient retrofitting and initiatives across all its commercial buildings from 2012 to 2022. The Company's three SLEB projects are further testament to its effective adoption of green building and low-carbon technologies. Going forward, CDL remains steadfast in its decarbonisation journey with continual improvements in energy efficiency. Disclosures - Unlocking Financial Value with Global Growth of ESG Investing Investors’ expectations have changed substantially. With businesses under pressure to disclose their ESG risks, a robust sustainability strategy and strong ESG performance help companies gain easier access to ESG funds and sustainable finance. In September 2021, CDL became a signatory of the UN Principles for Responsible Investment (PRI). As of December 2022, PRI has 5,319 signatories, representing US$121 trillion of AUM, signalling a rapidly accelerating transition towards sustainable assets.5 CDL’s CSO was also appointed as a member of PRI’s inaugural Real Estate Advisory Committee in January 2022, which succeeds the Property Working Group coordinated by UNEP FI. CDL has taken a proactive assessment of potential portfolio climate risks and opportunities, and rolled out its Sustainable Investment Principles (SIP) in December 2021. The SIP is aligned with global best practices in the Notes: 2 ISSB confirms requirement to use climate-related scenario analysis, IFRS, 1 November 2022. ³ In 2019, M&C announced its SBTi-validated 2oC target for absolute emissions reduction by 27% for owned and managed hotels under Scope 1 and 2. 4 Based on publicly disclosed data from 2016 to 2020. 5 UN PRI Signatory Update (October to December 2022). Notes: 1 Based on the latest research and scenario analysis from global climate benchmarks such as the Intergovernmental Panel on Climate Change, International Energy Agency, the Network for Greening the Financial System, and the World Bank.
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