Responses to Risks and Opportunities of the 15 Key Material ESG Issues in 2020

The table outlines our actions in addressing risks and capturing opportunities related to CDL’s top 15 material ESG issues derived from the 2020 materiality assessment study. It is mapped to 14 relevant SDGs and the four pillars of the TCFD framework. These ESG risks and opportunities complement CDL’s Enterprise Risk Management (ERM) framework, which can be found in the Risk Management Report in CDL’s Annual Report 2020.

Legend for TCFD Pillars:

Governance
Strategy
Risk Management
Metrics & Targets

Please slide left to view more.

CDL’s Material ESG Issues Risks/OPPORTUNITIES CDL’S RESPONSES AND ACHIEVEMENTS
Occupational Health, Safety and Well-being

Supporting SDGs:

TCFD Pillars:

Most activities at CDL’s construction sites and managed buildings are carried out by our appointed contractors. Safety lapses by our contractors can expose CDL to reputation and regulatory risks.

In the wake of COVID-19, safe management measures need to be effectively enforced to prevent community transmission at CDL’s construction sites and managed buildings. Failure to enforce the measures may lead to regulatory fines and/or disruptions to CDL’s operations.

Anticipating and controlling workplace hazards that could impair CDL employees’ physical and mental health and well-being is vital to CDL.

The safety, health and wellness of our employees and contractors’ workers have always been CDL’s priorities.

In 2020, CDL completed the migration from OHSAS 18001 Occupational Health and Safety Assessment Series to ISO 45001 Occupational Health and Safety for all our key operations in Singapore, to effectively manage the safety, health and well-being of our employees and workers, directly or indirectly hired.

Established since the early 2000s, CDL’s EHS Policy and CDL 5-Star EHS Assessment have been continually enhanced in standard and scope, working closely with the appointed contractors, where possible, to ensure migrant workers’ work and living conditions are in line with national guidelines. With the announcement of the new dormitories standards in June 2020, CDL enhanced our 5-Star EHS Assessment to ensure, where possible, migrant workers’ living conditions are improved.

Since the start of Phase 1 post-Circuit Breaker on 2 June 2020, CDL’s EHS team regularly conducts compliance checks on the implementation of safe management measures across all our managed properties to deter any transgression.

Strict monitoring and response procedures were put in place to address any reported cases of COVID-19 infections amongst CDL’s employees, workers and building users.

Innovation

Supporting SDGs:

TCFD Pillars:

To build value in a pandemic-inflicted economy, it is important to innovate and evolve swiftly to changes.

Innovative real estate business models, such as providing safe and healthy spaces as a service, are also gaining traction in response to COVID-19’s impact on changing customer demands.

By investing in green building technologies and adapting to new business models, CDL can ensure that our products and services operate at the highest efficiency and remain relevant and resilient against impending disruptions.

Innovation has been a top priority in CDL’s growth and investment strategy. Our pipeline of innovation projects in green buildings and digitalisation is growing and will generate environmental and social benefits.

In adjusting to the “new normal”, CDL deployed various technologies including autonomous UVC disinfection robots, automated thermal scanners, indoor air quality sensors, and anti-microbial disposable films, to create safer and healthier environments for our building users.

CDL also launched the first-of-its-kind contactless lift eCall solution at Republic Plaza using our proprietary smart building app, CityNexus, in collaboration with Otis Singapore.

In 2020, the NUS-CDL Smart Green Home developed, amongst others, an Acoustic Friendly Ventilation Window (AFVW) prototype to achieve better noise reduction and ventilation. The AFVW prototype was installed at Irwell Hill Residences’ showflat in March 2021.

Product/Service Quality and Responsibility

Supporting SDGs:

TCFD Pillars:

As the impact of COVID-19 on the construction sector has a cascading effect on the value chain, the relief provided by the Singapore government16 allowed CDL to focus on delivering safe and high-quality products and services, particularly for our residential and commercial projects.

As a landlord, CDL also has the responsibility of ensuring a safe and healthy environment for all its building users, by preventing the spread of COVID-19.

To ensure compliance and prevent latent defects, CDL implemented 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.

In anticipation of social distancing due to COVID-19, CDL piloted the Virtual Unit Handover initiative at Forest Woods as an option for vacant possession of strata units upon its TOP in November 2020. This allowed homeowners to opt for a virtual walkthrough, led by CDL’s Customer Service Officer. Potential homebuyers are also treated to 3D virtual tours of CDL’s showflats as well as online sales presentations in the comfort of their homes.

On a global scale, CDL made further headway towards digitalisation and launched more virtual tours of our Singapore and UK properties.

The CDL eMall platform was launched to support tenants from City Square Mall, Palais Renaissance and Republic Plaza by providing them with an online sales channel complete with end-to-end fulfilment services.

Economic Contribution to Society

Supporting SDGs:

TCFD Pillars:

CDL’s financial performance impacts the vested interests of our employees, shareholders, investors and supply chain. As CDL remains resilient against the prolonged impacts of the COVID-19 pandemic, we continue to uphold high standards of ethical business practices, maintain strong branding and deliver quality products to return profits and provide optimum returns for investors in our fiduciary duty as stewards of capital, creating value for our stakeholders.

CDL committed more than $40 million in property tax rebates and rental relief to our Singapore and overseas, retail and commercial tenants to tide over this difficult period. This includes passing on the full quantum of property tax rebates from the Singapore government to local tenants. Tenants facing severe cash flow issues were also offered more flexibility in rental payments.

Energy Efficiency and Adoption of Renewables

Supporting SDGs:

TCFD Pillars:

Globally, there is increased pressure for businesses to accelerate the transition towards a low-carbon economy. More stringent regulations on the energy performance of buildings and rising carbon tax are also expected, with the launch of the Singapore Green Plan 2030 in February 2021.

As energy consumption contributes
to a significant portion of CDL’s building’s operating expenses and carbon footprint, CDL needs to implement robust low-carbon strategies for our managed buildings, to maintain our leadership as a green developer.

Through robust resource management and regular asset upgrading and enhancement efforts, CDL has been maintaining good energy performance for our existing commercial properties.

Since 2004, CDL has retrofitted all our existing managed buildings. From 2012 to 2020, CDL achieved savings of more than $30 million in energy expenses across all managed properties.

Together with SERIS in 2020, CDL jointly applied for a Solar Competitive Research Programme and built a PV-integrated modular pod at Central Mall to develop suitable solar modules for BIPV integration. Also, with SERIS, CDL piloted printed bifacial BIPV panels at City Square Mall, as a testbed for innovative solar integration solutions.

100% of CDL’s retail and office tenants are subscribed to CDL’s Green Lease Partnership Programme, which guides them on energy-saving fittings and measures.

Plans are currently underway to roll out BCA Green Mark SLE-certified buildings in Singapore by 2023.

Stakeholder Impact and Partnerships

Supporting SDGs:

TCFD Pillars:

Building goodwill in the community provides CDL with a strong social license to operate. Through working with like-minded partners, CDL has pioneered partnerships that create multiplier effects on outreach and impact.

Taking action during COVID-19 requires an understanding of how CDL’s community and key stakeholders have been affected so that CDL can provide immediate responses, where relevant.

To support vulnerable communities during the onset of COVID-19, CDL donated more than $400,000 to The Invictus Fund. Through an internal fundraiser, CDL raised $88,000 for close to 1,500 workers at our development projects, to provide them with necessities during Circuit Breaker.

CDL raised funds for Assisi Hospice, one of its longstanding community partners, for the annual Assisi Hospice Fun Day 2020, which involved stakeholders such as staff and like-minded business partners and associates.

While some of CDL’s community programmes were postponed due to COVID-19, we furthered our initiatives virtually, including events at the SSA, amplifying positive impact throughout CDL’s community while adhering to safe management measures.

Climate Resilience

Supporting SDGs:

TCFD Pillars:

The built sector contributes to some 40% of global energy-related carbon emissions and is heavily reliant on natural resources for operations.

Regulatory transition risks such as carbon tax, water pricing and potentially stricter building design requirements will pose challenges to maintain profitability and sustained growth.

Extreme weather patterns can lead to stranded assets and affect the well-being of building occupants. In the face of climate change, climate-proofing CDL’s buildings for a low-carbon future is key to our growth strategy.

CDL recognises climate change as a material strategic risk under CDL’s risk assessment framework. We are committed to implementing mitigation and adaptation measures to combat the effects of climate change on our portfolio of assets.

For close to a decade, CDL has been achieving our voluntary target of at least 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 gross floor area, are rated Green Mark GoldPLUS or Platinum—the highest tier certification.

In February 2021, CDL pledged support to the WorldGBC’s Net Zero Carbon Buildings Commitment 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.

CDL is also reviewing our SBTi-validated GHG reduction targets to align with a 1.5°C warmer scenario-compliant business model.

Healthy Buildings (NEW)

Supporting SDGs:

TCFD Pillars:

Building occupants are paying more attention to attributes of a healthy environment in buildings that can contribute to their health, well-being and productivity.

Buildings with poor IAQ and sanitisation practices are susceptible to viral transmissions.

CDL designs and manages our buildings with the health and wellness of our building occupants in mind, including factoring in acoustic comfort, natural ventilation, thermal comfort and biophilic design.

In 2020, CDL developed a Smart, Sustainable and Super Low Energy (3S) Green Building Framework, a holistic framework that is aligned with BCA SLE buildings requirements and international standards for advancing health and well-being in buildings.

Since August 2020, Republic Plaza tenants can view IAQ indicators such as temperature, humidity, PM2.5, carbon dioxide and volatile organic compounds levels through the CityNexus app.

In 2020, CDL supported a collaboration between the University of California, Berkeley, Center for the Built Environment, and SinBerBEST, which was funded by the National Research Foundation, to benchmark our IEQ responses to similar commercial buildings in Singapore. While overall staff satisfaction was high, the study identified further areas for improvement, such as privacy, noise level of work space and office dress code.

Cyber-readiness, Security and Data Privacy

Supporting SDGs:

TCFD Pillars:

Strengthening CDL’s capabilities to protect itself and recover from cyber-attacks is vital to preventing data theft, 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.

Globally, cybersecurity threats (e.g. phishing and malware) are occurring more frequently due to WFH arrangements and COVID-19-themed lures.

Besides establishing holistic IT governance structures and developing robust detection and mitigation measures to protect CDL’s critical business systems and data, our 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 regulations and the increasing impact of potential data privacy breaches. In response, CDL has been carrying out various mitigating measures including staff awareness training, as well as monitoring of local and international data privacy developments relevant to its business.

Responsible Supply Chain

Supporting SDGs:

TCFD Pillars:

The procurement of unsustainable building materials and unfair labour practices that go against human rights can negatively impact CDL’s ESG performance and reputation. Usage of toxic building materials can also harm the health of building users and workers. For more than a decade, CDL has been implementing guidelines that contain clear specifications for responsible sourcing along our supply chain.This includes the implementation of the Responsible Procurement Guidelines17 since 2008, and the Green Procurement Guideline for property developments since 2009.

In line with our corporate EHS Policy introduced in 2003, these guidelines encourage the use of eco-friendly and recycled materials that have been certified by approved local certification bodies, such as SGBC and SEC.

All suppliers are required to sign a Supplier Code of Conduct (introduced in 2015), which provides comprehensive guiding principles for our vendors and suppliers to comply with CDL’s expectations, including environment, health, safety, and ethical employment.

CDL completed a supply chain segmentation study in 2020, where environmental (e.g. embodied carbon intensity) and social risks (e.g. forced or child labour) were assessed for its top suppliers and building materials procured for its developments. The results were shared with the BSC in late 2020 and will be communicated to relevant business units through a workshop in 2021 to develop strategies specific to their operations.

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-compliance can lead to the erosion of trust by CDL’s stakeholders, causing CDL to lose our social license to operate.

By taking a firm stance on its zero-tolerance policy towards fraud, bribery and corruption, CDL can influence its value chain and provide 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 as per industry standards. Anti-money laundering workshops are conducted annually for our employees.

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 improve and tighten contractors’ site management.

CDL adopts fair marketing practices to reinforce customer’s trust in how CDL-branded properties are marketed.

Future-ready Workforce

Supporting SDGs:

TCFD Pillars:

A workforce that is ill-prepared to keep up with industry developments, knowledge and technological trends will impact human capital, operational efficiency, and sustained growth.

In reacting to the pandemic, businesses had a short lead time to transition their workforce and IT infrastructure for WFH arrangements. A workforce that is not agile to adapt to such sudden disruptions will threaten its business continuity.

Building a workforce with skill sets that contribute to future-proofing 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, enabling employees to acquire holistic skills and competency to stay relevant and adapt effectively to changing job demands.

In complementing WFH arrangements, CDL stepped up on virtual learning and development offerings for our employees. Topics covered include leadership building, digital working tools, sustainability, occupational health and safety, and cultivation of healthy lifestyles and mental resilience.

Sustainable Finance

Supporting SDGs:

TCFD Pillars:

The rise of ESG investing and responsible banking has unlocked alternative financing streams that can lower CDL’s borrowing costs and expand our pool of ESG-centric investors and lenders.

Sustainable financing mechanisms also help drive companies’ sustainability strategies and targets.

In 2020, CDL secured a $470 million green revolving credit facility for the refinancing of Republic Plaza and other eligible projects set out in the CDL Sustainable Finance Framework. The framework allows CDL to be well prepared for opportunities where sustainable financing can be used to fund green projects that support CDL’s business strategy and vision.

As of 31 December 2020, CDL has secured more than $1.3 billion of sustainable finance, including a green bond, green loans and a sustainability-linked loan.

Human Rights and Labour Conditions

Supporting SDGs:

TCFD Pillars:

Respecting and promoting the rights and dignity of employees, workers and communities help to build a more resilient supply chain, which is expected from a responsible business.

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 to building a sustainable workforce. This allows CDL to strengthen employee loyalty, increase work productivity, strengthen teamwork and increase creativity.

CDL engages our contractors 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. 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.

The spread of COVID-19 amongst workers could be exacerbated by their living conditions at commercially run dormitories. During the lockdown of foreign worker dormitories to combat the outbreak of COVID-19, CDL enhanced our 5-Star EHS Assessment audit standards in line with the national improved standards for the living conditions of migrant workers. CDL fully supports the Singapore government’s enhanced living standards for purpose-built dormitories, and is committed to work closely with our main contractors on this issue.

CDL provided timely updates of the COVID-19 situation to our workforce and rolled out WFH arrangements swiftly. This ensured that all employees were equipped with essential digital tools to facilitate communication and workflow under new work conditions.

Water and Waste Management

Supporting SDGs:

TCFD Pillars:

Prudent water usage can help to lower operational costs of managed buildings, and conserve water, which is a precious natural resource.

Waste management is a growing concern in Singapore as the country is expected to run out of landfill space by 2035. As such, more stringent regulations to manage the various waste streams can be anticipated.

CDL’s developments are designed with a lifecycle approach to water sustainability and sound waste management. CDL adopts 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.

CDL was placed in the 2020 CDP A List in water security, an affirmation of CDL’s robust water management strategy. CDL was the only Singapore company to score an A in the 2020 assessment, and the only company in Southeast Asia and Hong Kong to remain listed on the CDP A List for water security for two consecutive years.