STRATEGIC MANAGEMENT OF MATERIAL ESG ISSUES

DYNAMIC APPROACH TO MATERIALITY ASSESSMENT

Since 2014, materiality assessments are conducted annually and facilitated by a third party to determine the key economic, environmental, social and governance (EESG) issues that are important to our stakeholders. These issues are foundational to CDL’s annual sustainability reporting. Corresponding EESG targets, metrics, initiatives, and progress are reviewed by the management team, reported to the Board Sustainability Committee (BSC). and the Board for approval, before they are published annually in our Integrated Sustainability Report (ISR).

Learning from the unprecedented disruptions caused by the COVID-19 pandemic, we adopted a more dynamic approach on the assessment of key ESG issues from 2020 to 2022, addressing the fast-changing landscape and supply chain issues.² The exercise determined the actual and potential impacts of these issues on CDL’s long-term value creation, and conversely, CDL’s impact on them. To gather feedback, online surveys were circulated to key stakeholder groups, including the BSC. More than 280 responses were received. Interviews with selected management staff of CDL headquarters and key subsidiaries, regulators, industry and sustainability experts, tenants and suppliers, provided insights into how CDL can manage and strategically address our ESG issues. The preliminary material issues were validated by CDL’s senior management and approved by the BSC thereafter.

2022 MATERIAL ESG ISSUES

Our findings revealed that environmental issues remained a key priority for stakeholders. “Innovation” was the top material issue in 2022, followed by “Energy Efficiency and Adoption of Renewables” and “Climate Resilience”. Innovation remains a high priority as it is an important driver in achieving CDL’s net zero commitments.

“Water and Waste Management” rose significantly in ranking, becoming one of the top five material issues in 2022. This reflects growing recognition that the climate crisis is a water and ocean crisis. In the fight against climate change and in the aftermath of COVID-19, there has been increased interest amongst global and local stakeholders in ocean-based climate solutions for global and national economic recovery plans.

Social issues including “Stakeholder Impact and Partnerships” and “Healthy Buildings” decreased in significance this year. Despite this, stakeholders emphasised the importance of managing these issues on a consistent and ongoing basis.

With greater focus on Scope 3 emissions, “Responsible Supply Chain” has increased in significance. Focus on the environmental performance of our Group’s hotel arm, Millennium & Copthorne Hotels Limited (M&C), is magnified. Moving forward, there will be greater synergies between CDL’s and M&C’s efforts to improve M&C’s sustainable hotel operations to align with CDL’s net zero goals.

 Ranking increased significantly from the previous year’s materiality study

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