Responses to Risks and Opportunities of the 15 Key Material ESG Issues in 2019

The table outlines CDL’s actions in addressing risks and capturing opportunities related to CDL’s top 15 material ESG issues. It is also mapped to 14 relevant SDGs and the four pillars of the TCFD framework. Most of CDL’s deliverables cut across several material ESG issues given that some are interrelated (e.g. “Innovation”, “Energy Efficiency and Adoption of Renewables” and “Climate Resilience”). These ESG risks and opportunities complement CDL’s Enterprise Risk Management (ERM) framework, information of which can be found in the Risk Management Report in CDL’s Annual Report 2019.

Legend for TCFD Pillars:

Governance
Strategy
Risk Management
Metrics & Targets

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CDL’s Material ESG Issues Risks/OPPORTUNITIES CDL’S RESPONSES AND ACHIEVEMENTS
Innovation

Supporting SDGs:

TCFD Pillars:

To ensure that our services and products remain relevant in a fast-changing environment, CDL proactively adopts sustainable construction methods and integrates innovative technologies that will help drive our business to the next level and raise the bar of sustainable practices and ESG performance. Identified as the top material ESG issue since 2017, innovation has been a top priority in CDL’s growth and investment strategy.In 2019, we embarked on a pilot project with the Solar Energy Research Institute of Singapore to integrate high efficiency BIPV modules with PPVC, using The Tapestry, our new residential development in Singapore, as a testbed.

In partnership with NUS, the NUS-CDL Tropical Technologies Laboratory and the NUS-CDL Smart Green Home were opened in 2018 and 2019 respectively. Both labs will continue to conduct studies on smart features, green building technologies, and design for sustainable living.

In support of aspiring social innovators, CDL launched the Incubator For SDGs in September 2019 to provide rent-free co-working space at Republic Plaza to selected start-ups or social enterprises. The initiative offers an extensive network and mentorship programme to help aspiring social innovators to scale up and reach out to potential investors.

Through a cross-department Enterprise Innovation Committee (EIC) formed in 2018, multi-disciplinary ideas to drive innovation and best business practices are explored and tested in CDL.

Energy Efficiency and Adoption of Renewables
Supporting SDGs:

TCFD Pillars:

As energy consumption contributes to a significant portion of a building’s operating expenses, increasing the use of solar energy and neutralising carbon footprint has been a priority for us in developing and managing our properties. It will help mitigate operational risks as more stringent regulations and rising carbon tax are expected. Higher energy efficiency often contributes to lower operational costs. CDL achieved the 2019 CDP A List for climate action, recognising CDL’s robust climate strategy and carbon management.Since 2004, we have retrofitted all our existing commercial and industrial buildings. From 2012 to 2019, CDL achieved savings of more than $28 million in energy expenses amongst our eight commercial properties.

100% of our commercial tenants have subscribed to our Green Lease Partnership Programme.

We were among the first developers and building owners to pledge our commitment in 2018 to achieve at least one SLE project in the next five years.

CDL partnered with BlueSG and Greenlots in EV sharing programmes by providing more carpark lots with charging stations at Republic Plaza, Central Mall, and City Square Mall. In 2019, CDL was also one of the leading landlords to partner with SP Group to provide direct current fast chargers at Republic Plaza and Tagore 23 Warehouse.

CDL was Singapore’s first real estate company to procure RECs using SP Group’s blockchain-enabled platform in Singapore in 2018.

Climate Resilience

Supporting SDGs:

TCFD Pillars:

The built sector contributes to some 40% of energy-related carbon emissions and is heavily reliant on natural resources for our operations.Regulatory transition risks such as carbon pricing, water prices and potentially stricter building design requirements will pose challenges to maintain profitability and sustained growth.

Climate change not only physically affects properties but also threatens to leave assets stranded. In the face of climate change, climate-proofing the company’s buildings for a low-carbon future is key to CDL’s growth strategy.

To optimise resources and cost-savings, sustainability considerations are factored into the entire development lifecycle. Since 2009, we have voluntarily reduced our annual carbon emissions to net-zero for our corporate office operations including our data centre and 11 Tampines Concourse – the first CarbonNeutral® development in Singapore and Asia Pacific.For close to a decade now, CDL has committed to achieving a voluntary target of Green Mark GoldPLUS certification for all new developments, two tiers above mandatory requirement. To date, 85% of CDL’s portfolio of owned and managed buildings, based on GFA, are rated Green Mark GoldPLUS and Platinum – the highest tier certification.

In addition to building two zero-energy developments in Singapore, i.e. CDL Green Gallery at Singapore Botanic Gardens and SSA at City Square Mall, we have also adopted extensive solar energy in our commercial and residential developments, e.g. South Beach and D’Nest.

As part of CDL’s SBTi-validated carbon reduction targets, we are committed to raising the use of sustainable building materials. We have set target to reduce embodied carbon1 by 24% by 2030.

In September 2019, CDL joined the pioneer batch of 87 global companies worldwide to pledge support of the UNGC’s Business Ambition for 1.5°C campaign.2

We commenced our second climate change scenario planning where a more stringent 1.5°C warmer scenario was studied, covering the financial impact of physical and transition risks of properties in major markets.

Product Quality and Responsibility

Supporting SDGs:

TCFD Pillars:

Delivering safe and high-quality products and services in CDL’s residential, office, commercial and industrial developments is fundamental to CDL’s branding and product differentiation. CDL’s developments have consistently excelled under the BCA’s Construction Quality Assessment System (CONQUAS) scheme, entrenching the company’s reputation as one of the highest scoring CONQUAS developers.To ensure compliance and prevent latent defects, we have a robust policy to identify design risks and assess the severity of EHS impacts throughout the construction stages of our developments.

Beyond product safety and quality, we encourage our employees and tenants to go green and stay healthy through participation in the BCA-HPB Green Mark for Healthier Workplaces scheme.

Occupational Health, Safety and Well-being3

Supporting SDGs:

TCFD Pillars:

As most activities at construction sites and managed buildings are carried out by our appointed contractors, CDL is exposed to safety and health risks if the management of contractors is not sufficiently stringent. The safety, health and wellness of CDL’s employees and contractors’ workers have always been CDL’s priorities. Established since the early 2000s, our EHS policy and 5-Star EHS Assessment System have been enhanced in standard and scope over the years.Since 2017, we integrated our ISO 14001 and OHSAS 18001 EHS Management System across all our key operations in Singapore, to effectively manage the safety, health and well-being of our employees and workers, directly or indirectly hired. In 2020, CDL will be migrating from OHSAS 18001 Occupational Health and Safety Assessment Series to ISO 45001 Occupational Health and Safety.
Ethical and Transparent Business

Supporting SDGs:

TCFD Pillars:

Bribery and corruption are amongst the highest risks for businesses that could lead to financial and reputational loss. Legal non-compliances will disrupt operations and affect business reputation.Our zero-tolerance policy towards fraud, bribery and corruption provides strong assurance to our stakeholders, including investors and customers. Currently, we benchmark our practices with the voluntary SS ISO37001 Anti-bribery Management Systems to ensure that gaps are minimised and we operate in accordance to globally-recognised best practices. Refresher trainings on anti-money laundering practices are conducted annually for CDL’s employees.CDL has been implementing clear and transparent policies and risk management systems, to continuously monitor and validate business processes, and benchmarks them against industry best practices. Within the company’s robust EHS Management System, applicable legal requirements are regularly monitored and evaluated for compliance. Incentives and penalties are also implemented to improve and tighten contractors’ site management.

CDL adopts fair marketing practices that reinforce customers’ trust in CDL-branded properties.

Economic Contribution to Society

Supporting SDGs:

TCFD Pillars:

Our financial performance impacts the vested interests of our employees, shareholders, investors and vendors. Through upholding high standards of ethical business practices, maintaining strong branding and delivering quality products, we have maintained profitability and optimum returns for investors in our fiduciary duty as stewards of capital, creating value for our stakeholders.
Responsible Supply Chain

Supporting SDGs:

TCFD Pillars:

The procurement of unsustainable building materials and methods can negatively impact CDL’s ESG performance. Usage of toxic building materials can also harm the health of building users and contractors’ workers. CDL has built a supply chain that shares the company’s firm commitment to high EHS standards through the CDL 5-Star EHS Assessment System established since 2005. The CDL Green Procurement Guidelines, within the EHS Management System, also gives clear guidance to suppliers.For long-term business sustainability, strong suppliers’ support has helped CDL adapt effectively to challenges posed by climate change or shortage of resources.

To promote and enhance sustainable and responsible practices amongst our suppliers, we conducted a supply chain study in 2019, identifying and assessing the environmental (e.g. embodied carbon intensity) and social risks (e.g. forced or child labour) of our top suppliers and building materials.

Cyber-readiness and Data Privacy

Supporting SDGs:

TCFD Pillars:

Strengthening CDL’s capabilities to protect and recover from cyber-attacks is vital to preventing theft of data, financial loss, and disruption of operations.Given rising data privacy concerns both locally and globally, CDL needs to be mindful of compliance requirements for international and local data privacy protection laws. Besides establishing holistic IT governance structures and developing robust detection and mitigation measures to protect CDL’s critical business systems and data, the company’s IT response plans are tested by independent external and internal auditors and benchmarked against industry best practices.CDL’s risk assessment framework has identified data privacy as a key risk, given recent developments in data privacy regulation and the increasing impact of potential data privacy breaches. In response, CDL has been carrying out various mitigating measures including staff awareness training and monitoring of local and international data privacy developments relevant to the company.
Sustainable Finance (NEW)

Supporting SDGs:

TCFD Pillars:

Real estate and green technologies can be capital intensive. The rise of ESG investing and responsible banking, has unlocked alternative financing streams that can help lower the long-term cost of corporate borrowing and expand CDL’s pool of ESG-centric investors and lenders. In 2019, CDL implemented a Sustainable Finance Framework to be well prepared for opportunities in which sustainable financing can be used to fund projects that support CDL’s business strategy and vision.To accelerate the green building movement and low-carbon developments, we secured $500 million in green loans for new developments and pioneered a $250 million SDG Innovation Loan last year. This was an expansion from CDL’s pioneering issuance of a $100 million green bond by a Singapore company in 2017.
Future-ready Workforce

Supporting SDGs:

TCFD Pillars:

A workforce that is ill-prepared to keep up with industry developments and technological trends will impact CDL’s human capital, operational efficiency, and sustained growth. Building a workforce with skill sets that future-proof CDL’s business in a fast-changing and uncertain global economy is a priority. We actively foster a culture of continuous learning in our workforce, regardless of managerial level and gender, enabling employees to acquire holistic skills and competency to stay relevant and adapt effectively to changing job demands.
Labour Conditions (NEW)

Supporting SDGs:

TCFD Pillars:

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 key in building a sustainable work force.This allows CDL to strengthen employee loyalty, increase work productivity, strengthen teamwork, and increase the level of creativity. We implemented the Workplace Anti-Harassment and Anti-Bullying Policy in 2019 to strengthen our commitment to maintaining a safe and harassment-free work environment for our employees.In 2019, CDL joined the Sustainable Employment Pledge, a new initiative by Singapore Business Federation. We have pledged to make at least one improvement to our sustainable employment practices every 12 months.

Biennially, CDL conducts an employee engagement survey. From the results of the survey, each department’s nominated Engagement Champion facilitated meaningful focus group sessions on selected topics and monitored the progress of the action plans set out.

Community Impact and Partnerships

Supporting SDGs:

TCFD Pillars:

Building goodwill in the community provides CDL with a strong social license to operate, strengthening CDL’s identity as a responsible company.Through working with like-minded partners, CDL has pioneered partnerships that create multiplier outreach and positive impact. CDL’s strong community impact investment strategy covers key themes including promoting environmental awareness and zero waste, advocating best practices in sustainability, empowering youths and women, supporting local arts, and caring for the less fortunate.CDL’s extensive and varied 3P partnership programmes allow the company to raise awareness about climate change and the SDGs to a larger community, locally and abroad. This includes SSA that provides rent-free space to selected parties from public, private and NGOs who conduct activities that promote the SDGs and climate action.
Human Rights4

Supporting SDGs:

TCFD Pillars:

We strongly believe in upholding fundamental principles of human rights along the value chain and in places where we operate. We influence our value chain by engaging our builders and suppliers to abide by CDL’s fundamental principles and policies such as the Supplier Code of Conduct, Human Rights Policy, and Universal Design Policy. Where we do not have a controlling interest, we encourage our stakeholders, including business partners, contractors, suppliers and joint venture partners to observe the CDL Human Rights Policy
Water and Waste Management*

Supporting SDGs:

TCFD Pillars:

Singapore was ranked ‘most at risk of facing high water stress’ by the World Resource Institute in 2015. Water price in Singapore also went up by 30% between 2017 and 2018.Waste management is a growing concern in Singapore as the country is expected to run out of landfill space by 2030. As such, more stringent regulations to manage waste can be anticipated. CDL’s developments are designed with a strong focus on water sustainability and sound waste management throughout the lifecycle of any asset. We adopt technologies to raise water efficiency and minimise waste, such as rainwater harvesting and food waste digestors, which are implemented at many of our residential and commercial developments.The CDL Future Value 2030 sustainability blueprint also sets out ambitious water and waste management targets, of which CDL is on track to meeting them. The company also collects high quality data internally to help drive water and waste management improvements.

CDL achieved the 2019 CDP A List in water security, an affirmation of CDL’s robust water management strategy

 

1 Embodied carbon of construction materials includes GHG emissions arising from the manufacturing, transportation, assembly, replacement and deconstruction of building materials.
2 Press release by the UNGC, 22 September 2019.
3 This refers to anticipating and controlling hazards arising in or from the workplace that could impair the physical, mental and social health and well-being of workers.
4 This refers to considering potential human rights implications throughout a property’s lifecycle such as: design (e.g. accessibility of buildings), construction (e.g. workers’ rights, social and environmental impacts of selected construction materials), and property management (e.g. tenants and occupants’ digital privacy and data protection rights).