TURNING RISKS TO OPPORTUNITIES FOR SUSTAINABILITY
The table below outlines our actions in addressing risks and opportunities that are related to CDL’s top 17 material ESG issues identified. They are mapped to 14 relevant UN SDGs and the four pillars of the Task Force on Climate-related Financial Disclosures (TCFD) framework. Some of these ESG risks and opportunities are also captured in CDL’s Enterprise Risk Management (ERM) framework, which can be found in the Risk Management section in CDL’s Annual Report 2022.
Legend for TCFD Pillars:
G – Governance; S – Strategy; RM – Risk Management; M&T – Metrics & Targets
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|CDL’S Top Material ESG Issues
|Risks and Opportunities
|CDL’s Responses and Achievements
TCFD Pillars: S, RM
|Innovation is CDL’s top material issue in 2022. It is a key enabler in achieving our ESG goals and targets, while future-proofing our business and creating social and economic value for our stakeholders.
By investing in R&D and emerging PropTech solutions, CDL ensures that our products and services are resilient against disruptions and operate at the highest quality for our customers and building occupiers.
|As the world transitions to a smart and low-carbon future, innovation has been pivotal in allowing CDL to achieve strong ESG performance.
In 2022, CDL piloted several cross-functional business solutions to accelerate the group’s focus on digitalisation and decarbonisation. These included a centralised payment platform; digital procurement processes; in-house proprietary home sales platform; micro-climate solution for air-conditioning optimisation in office spaces; cool paints to mitigate thermal heat transfer via window facades; remote monitoring and diagnostics for lift maintenance; smart energy storage system to power construction equipment as well as ensuring accuracy of defects inspection rates via automated solutions.
CDL continues to work with our R&D partners, such as SERIS, NUS-CDL Smart Green Home, NUS-CDL Tropical Technologies Lab and Singapore University of Technology and Design (SUTD) to facilitate the commercialisation of emerging research.
|2. Energy Efficiency and Adoption of Renewables
TCFD Pillars: G, S, RM, M&T
|With the launch of the Singapore Green Plan in 2021 and related refreshed BCA Green Mark 2021 standards and the impending increase in carbon tax, more stringent regulations on the energy performance of buildings are expected.
Energy consumption contributes a large portion of CDL’s carbon footprint. As a leading green developer, CDL implements low-carbon strategies for our managed buildings.
|Ahead of our 2023 goal, CDL achieved the first BCA Green Mark Platinum Super Low Energy (SLE) award for our mixed-use integrated development – Newport Plaza (formerly Fuji Xerox Towers). The award was accorded for both its residential as well as non-residential components (serviced residences, offices and retail).
Designed with sustainability in mind, CDL’s Copen Grand is also Singapore’s first BCA Green Mark Platinum Super Low Energy Executive Condominium (EC). It obtained the award with Health & Wellbeing, Whole Life Carbon and Maintainability badges, based on GM 2021 standards.
Through dedicated tracking, monitoring and improvements in energy efficiency, CDL has achieved cost savings of more than S$38 million from reduced energy expenses across all our managed properties since 2012. Regular asset upgrading and enhancement efforts since 2004 have helped CDL to maintain good energy performance for our existing commercial properties.
|3. Climate Resilience
TCFD Pillars: G, S, RM, M&T
|Climate-proofing CDL’s buildings in line with a low-carbon future is key to our sustainable growth strategy.
The built sector contributes to some 40% of global energy-related carbon emissions, and remains heavily reliant on natural resources for operations. This includes physical risks such as stranding risks from extreme weather patterns and transition risks such as carbon tax, increase in water and electricity tariffs.
Locally, stricter building design requirements, competition for green materials and heightened demand for clean energy and circular economy solutions will pose challenges to maintain profitability and sustain growth in the short to medium term.
|In December 2022, CDL completed our third climate change scenario analysis in line with TCFD recommendations. The study focused on orderly and disorderly scenarios for a 1.5°C and 2°C warmer scenario in year 2030, presenting updated physical and transitional risks for the group portfolio consisting of hotels, investment properties and new developments. The analysis also covered climate-related risks from the COVID-19 pandemic as well as emerging net zero regulatory landscapes across five key CDL markets, namely: United States, United Kingdom, China, Singapore and New Zealand.
Findings supplement CDL’s pledge to the World Green Building Council (WorldGBC)’s Net Zero Carbon Buildings Commitment. In February 2021, CDL committed to achieve net zero operational carbon by 2030 for our new and existing wholly-owned assets and developments under our direct operational and management control. In November 2021, this commitment expanded to include maximum reduction in embodied carbon in new developments, compensating for any remaining residual operational and upfront embodied emissions via offsetting for new developments by 2030 and for all buildings to be net zero carbon by 2050.
CDL also operationalised our revised SBTi-validated GHG emissions intensity reduction targets (Scope 1, 2 and 3) from 2H 2022.
|4. Ethical and Transparent Business
TCFD Pillars: G, RM
|Bribery and corruption are amongst the highest risks that could lead to financial and reputational loss. Legal non-compliance can lead to the erosion of trust by CDL’s stakeholders, causing CDL to lose our social license to operate.
Taking a firm stance on our zero-tolerance policy towards fraud, bribery and corruption provides strong assurance to our stakeholders, including investors and customers.
|CDL benchmarks our practices with the voluntary SS ISO 37001 Anti-bribery Management Systems to minimise gaps. We operate according to industry standards. Anti-money laundering workshops are conducted annually for our employees. In 2022, CDL started to provide mandatory training for all new joiners on key risk management-related topics (namely AML/CFT, Data Privacy, and Incident Escalation).
CDL implements clear and transparent policies, risk management systems, and ESG disclosures to continuously monitor and validate business processes. Within CDL’s robust EHS Management System, applicable legal requirements are regularly monitored and evaluated for compliance. Incentives and penalties are also implemented to strengthen contractors’ site management.
For transparency, our corporate and sustainability policies and guidelines are published on our corporate website, sustainability microsite and staff intranet, CDL360.
|5. Water and Waste Management
TCFD Pillars: G, S, RM, M&T
|Water remains a crucial natural resource, with the total value of ocean assets estimated at US$24 trillion. Waste management is a growing concern in Singapore as the country is projected to run out of landfill space by 2035.
With increased regulation, changing consumer behaviour and shifting corporate practices, accelerated momentum into greener water and waste practices are expected in the short to medium term.
|CDL is proud to maintain our inclusion in the 2022 CDP A List for water security. This marks our fourth consecutive year of receiving an ‘A’ score.
CDL’s developments are designed with a lifecycle approach to water sustainability and sound waste management. We adopt technologies to raise water efficiency and manage waste, such as rainwater harvesting and twin-chute pneumatic waste disposal system, which are implemented at many of our commercial and residential developments.
The Singapore government has implemented a Zero Waste Masterplan since 2019 with specific targets to improve national recycling, reuse and reduction rates as it transits towards a circular economy. At CDL’s commercial and retail properties, recycling bins and facilities are provided to encourage the recycling of paper, plastic and metal by shoppers and tenants.
|6. Occupational Health, Safety and Well-being
TCFD Pillars: S, RM, M&T
|The safety, health and wellness of CDL’s employees and contractors’ workers have always been amongst our top priorities. Aligned with Singapore’s Workplace Safety and Health (WSH) 2028 Roadmap, CDL works closely with the appointed contractors, where possible, to ensure workers on-site and in CDL’s offices observe good WSH practices and contribute to a strong EHS-minded culture across our company.
|CDL complies with ISO 45001 Occupational Health and Safety for our key operations in Singapore to effectively manage the safety, health and well-being of our employees and workers.
Established since the early 2000s, CDL’s EHS Policy and CDL 5-Star EHS Assessment have been continually enhanced in standard and scope. Additionally, the CDL 5-Star EHS Assessment also recognises and awards contractor companies that are exemplary in EHS excellence and workers’ welfare. Exemplary workers who exhibit good safety behaviour are also recognised. All six projects contribute to the yearly mean score of above 90% under the EHS 5-Star Assessment audit conducted by an independent third-party consultant.
CDL continues to be recognised as a long-serving bizSAFE Mentor. In 2022, we completed our surveillance audit and continued to be certified under the ISO 45001 occupational health and safety management system standard. CDL will continue to leverage industry best practices to ensure that occupational health and safety is maintained at their highest levels.
|7. Product/Service Quality and Responsibility
TCFD Pillars: S, RM
|As an asset owner and manager, CDL takes pride in ensuring a safe and healthy environment for our building users. CDL also remains committed to delivering safe and high-quality products and services for our homebuyers and tenants with smart building and energy-efficient features.
|To ensure compliance and prevent latent defects, CDL has a robust process guided by the Design for Safety Regulations to identify design risks and assess the severity of EHS impacts throughout the construction stages of our developments.
CDL unveiled our new in-house proprietary electronic system in 2021 for expressions of interest, balloting and satellite sales bookings for the sales launch of Irwell Hill Residences and CanningHill Piers. In 2022, the enhanced electronic system was used for the sales launch of Piccadilly Grand and Copen Grand EC.
Potential home buyers can access 3D virtual tours of CDL’s new launches and online sales presentations from the comfort of their homes.
The Virtual Unit Handover initiative, piloted in 2020, has continued to serve CDL well for future projects that obtain TOP. In 2021 and 2022, homebuyers of respective projects – The Tapestry and Whistler Grand – can opt for a virtual walkthrough, led by CDL’s Customer Service Officer.
|8. Cyber-readiness, Security and Data Privacy
TCFD Pillars: G, RM
|With rising data privacy concerns, CDL remains mindful of compliance requirements for international and local data privacy protection laws. Strengthening CDL’s capabilities to protect ourselves and respond to cyber-attacks is vital in preventing data theft, financial loss, and disruption of operations.
The shift to virtual working environments may increase vulnerability in business systems due to user behaviour or external factors such as malware and phishing attacks.
|CDL has established holistic IT governance structures and developed robust detection and mitigation measures to protect our critical business systems and data. CDL’s response plans are tested by internal auditors and an external professional firm and aligned with industry best practices.
CDL established a Cybersecurity Framework in 2020 to detect, protect against and respond to cyberattacks and crimes, and the CDL Computer Security Policies and Standards were updated in 2022 on cybersecurity compliance. In 2021 and 2022, CDL engaged a professional cyber security facilitator to run through various tabletop exercises with the Cyber Incident Response Team, to ensure preparedness in handling cyber security incidents.
CDL also conducts online cybersecurity trainings and periodic phishing attack simulations to increase employees’ IT security awareness and vigilance.
|9. Responsible Supply Chain
TCFD Pillars: G, S, RM, M&T
|CDL upholds our ESG performance and reputation with consistent engagement with our suppliers to procure sustainably sourced and safe building materials, ensure fair labour human rights practices for workers and healthy buildings for building occupiers.
|All suppliers must sign a Supplier Code of Conduct which provides comprehensive guiding principles for compliance. CDL regularly engages our top-tier suppliers to stay updated on the latest regulatory updates and widen their exposure to industry best practices. In 2022, 60 management and operation staff of CDL Group attended a virtual Corporate Sustainability Workshop on “Climate Change and Carbon Management” by external consultants.
CDL has long-established responsible sourcing guidelines for our supply chain. This includes the implementation of the Responsible Procurement Guidelines1 since 2008 and the Green Procurement Guidelines for property developments since 2009.
In line with our corporate EHS Policy established in 2003, which is updated regularly, these guidelines encourage the use of eco-friendly and recycled materials that have been certified by approved local certification bodies, such as the Singapore Green Building Council and Singapore Environment Council.
|10. Stakeholder Impact and Partnerships
TCFD Pillars: G, S
|Building goodwill in the community provides CDL with a strong social license to operate. Through collaborations with like-minded partners, CDL has pioneered and developed partnerships that multiply our outreach and impact on climate action and the UN SDGs.
|In April 2022, in partnership with National Parks Board (NParks) and Ocean Geographic, CDL launched an exhibition themed “Change the Present, Save the Ocean.” The exhibition amplifies the call for action to support both global and national climate efforts.
The two-day launch event kick-started on 10 April 2022 with a “Keep Calm and Love our Planet: Save our Ocean” edition, along with the launch of CDL’s E-Generation Challenge 2022.
In 2022, CDL held more physical events to continue our engagement efforts. Key events included the launch of Sustainability Connect, World Cities Summit, Youth4Climate Festival, My Tree House “We Love Our Planet” Storytelling Contest, CDL-GCNS Young SDG Leaders Award, and more. Read more about CDL’s stakeholder engagement initiatives in Chapter 5 of CDL’s ISR 2023.
|11. Diversity, Equity and Inclusion (DEI)
TCFD Pillars: G, S
|Post-COVID-19, DEI has risen in importance. Employees are increasingly demanding a workplace culture that embraces diversity, inclusion and a sense of social justice.
Workplace diversity encompasses a wide spectrum, such as gender, race, age, and employees with accessibility needs.
Socially responsible businesses should embed diversity and inclusion principles into recruitment practices, opportunities for advancement and remuneration policies.
|CDL’s recruitment process adheres to strict guidelines on non-discrimination and fairness, regardless of gender, ethnicity, religion, or age. As a company committed to meritocracy, CDL’s compensation and rewards policies are performance-based.
Women represent two-thirds of CDL’s workforce and half of the Heads of Departments at our Singapore headquarters. CDL is committed to providing equal remuneration and actively monitors gender pay gaps across various staff levels.
CDL embraces an inclusive workplace. Our multiracial workforce hails from diverse backgrounds. Due to Singapore’s predominantly Chinese population, our workforce comprises a larger percentage of Chinese employees.
In 2022, CDL’s CSO became an advocate for the G20 Alliance for Empowerment and Progression of Women’s Economic Representation. The G20 Empower aims to accelerate women’s leadership and empowerment in the private sector.
|12. Human Rights and Labour Conditions
TCFD Pillars: G, S, RM
|Respecting and promoting the rights and dignity of employees, workers and communities help to build a more resilient supply chain.
Creating a workplace that provides a decent work environment, fair remuneration, security in the workplace, freedom of expression, work-life balance and career growth, is critical to building a sustainable workforce.
|CDL engages our contractors and suppliers to abide by our fundamental principles and policies such as the Supplier Code of Conduct, Human Rights Policy, and Universal Design Policy. Since 2001, the CDL 5-Star EHS Assessment – an independent audit tool to assess, measure, and improve the main contractors’ EHS management and performance – has been in place to ensure a comprehensive, audited, and appraised approach.
CDL conducts a biennial employee engagement survey to understand our employees’ concerns and engagement levels, enabling CDL to perform as an employer of choice.
|13. Healthy Buildings
TCFD Pillars: G, S, RM, M&T
|Through conscious design and construction practices, buildings can be the first line of defence and mitigation factor against climate change and our related health impacts.
Climate change can affect the air we breathe indoors. Extreme weather patterns can also contribute to higher levels of indoor particulate matter, dampness and humidity leading to other issues like mould.
|CDL recognises that people are our greatest asset, and their health, safety and well-being are of utmost importance. Therefore, it is our responsibility to provide a safe and healthy environment for our employees, customers, and workers.
To this effect, CDL has a dedicated Green Building Policy since 2020 that supplements our EHS policy established since 2003. In 2021, CDL updated our 3S Green Building Framework to align with the latest BCA Green Mark 2021. This is an internationally recognised green building certification scheme consisting of six sections including “Health and Wellbeing”.
|14. Future-ready Workforce
TCFD Pillars: S, RM
|Companies need to remain nimble to adapt to changing work conditions and arrangements (e.g. flexi-work and hybrid work models).
A workforce that fails to keep up with industry developments, knowledge and technological trends, will have a negative impact on human capital, operational efficiency, and business continuity.
|Building a workforce with skill sets that future-proof CDL’s business in a fast-evolving global economy is a priority. CDL actively fosters a culture of continuous learning, enabling employees to acquire holistic skills and competencies to stay relevant and adapt to changing job demands.
With the shift back to working from the office in 2022, CDL stepped up in-person learning and development opportunities. Topics covered included project management, mindfulness, big data and data analytics, sustainability, occupational health and safety, and the cultivation of healthy lifestyles.
|15. Economic Contribution to Society
TCFD Pillars: G, S
|CDL’s financial performance impacts the vested interests of our employees, shareholders, investors and supply chain.
The generation of employment contributes to the economic growth of the markets that CDL operates in and the livelihoods in our supply chain.
Direct donations to the community are part of CDL’s community investments strategy to give back to the community.
|As CDL remains resilient against the prolonged impacts of the pandemic, we continue to uphold high standards of ethical business practices. We maintain strong branding and deliver quality products to return profits and provide optimum returns for investors in our fiduciary duty as stewards of capital.
From 2020 to 2021, CDL has committed more than S$40 million in property tax rebates and rental relief to our Singapore and overseas retail and commercial tenants. This includes passing on the full quantum of property tax rebates from the Singapore government to local tenants. Rent restructuring was extended to selected tenants whose businesses were badly affected, as well as rental payment flexibility for those facing severe cash flow issues. Rental, operational and marketing support was provided to tenants adversely impacted by the stricter measures. Close to 90% of CDL’s retail tenants have received rental assistance.
To encourage tenants to utilise the CDL eMall, CDL absorbed all onboarding costs and commissions, as well as all delivery charges for tenants till end-August 2021. The platform was closed from 4 February 2022 onwards.
A long-standing partner of Assisi Hospice since 1999, CDL continued to support the hospice’s fundraising efforts using virtual platforms in 2022, together with M&C, providing donations-in-kind, including shopping, F&B and hotel vouchers towards the event’s lucky draw and game prizes. Through The CDL Challenge, an in-house fundraising campaign that rallied donations from stakeholders (namely staff and business partners), and our support of Assisi e-Fun Day activities and its Gala Dinner, close to S$28,000 was raised.
|16. Biodiversity Conservation
TCFD Pillars: G, S, RM
|The real estate sector plays a key role in the ongoing green transition. Heightened awareness of biodiversity loss and changing lifestyle harboured during the pandemic have created more opportunities for the built environment to realise positive asset value from biodiversity conservation practices.
|Since 2008, Singapore has adopted a systematic Environmental Impact Assessment (EIA) Framework to determine and mitigate the impact of any new developments, especially those located close to an area of ecological significance, such as nature reserves. CDL’s development projects are within the land allocated by the Urban Redevelopment Authority (URA) for home and commercial use, and hence, none are located within protected areas.
Since 2010, CDL has made it a standard practice to conduct a Biodiversity Impact Assessment (BIA) at new development sites, where applicable. In 2016, CDL piloted an EIA study for our 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 learning experience, CDL is exploring possibilities of applying it for future developments. In 2020, a Biodiversity Policy, expanding on our BIA practices, was established. In 2021, it was further strengthened by aligning with Singapore’s “City in Nature” vision encapsulated in the Singapore Green Plan 2030.
|17. Sustainable Finance
TCFD Pillars: G, S
|The rise of ESG investing and responsible banking has unlocked alternative financing streams and granted CDL access to a wider pool of ESG-centric investors and lenders.
Companies which lag in their ESG performance could be penalised through higher cost of debt financing and face divestment from shareholders.
|As of 31 December 2021, CDL has secured more than S$3 billion of sustainable financing, including a green bond, several green loans and a sustainability-linked loan. In October 2022, we renewed our S$250 million SDG Innovation Loan, which was secured in 2019.
In 2021, CDL and our joint venture (JV) partner jointly secured green loans of S$847 million to finance the development of two Government Land Sales sites at Piccadilly Grand & Galleria and Copen Grand.
South Beach Consortium, a CDL JV, obtained a S$1.22 billion green loan for the refinancing of South Beach—a double BCA Green Mark Platinum mixed-use development.
As an investor, CDL is a signatory to the UN Principles for Responsible Investment. We have developed the CDL Sustainable Investment Principles to steward responsible capital allocation and decision-making for investments.
|Renamed from Green Procurement Guidelines in 2020.